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Why Labor Unions Are No Longer Necessary

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Running Head: Why Labor Unions Are No Longer Necessary

Why Labor Unions Are No Longer Necessary
Class Tutor

Labor unions in U.S.A are legally identified as representatives of workers in specific industries. The current duties of these unions surround collective bargaining, focusing on working conditions, benefits and membership status. These organizations are also responsible for representing their respective disputing members over violations concerning contract provisions. Today, there prevail controversial opinions regarding the importance of these unions. A large portion of rational thinkers argue that labor unions are unnecessary in America.

The main reasons behind insignificance of labor unions are harm to ununionized labor, unemployment, corruption, questions regarding efficiency and activeness of these unions, cost- push inflation, social disruption and other social and economic arguments. Some thinkers argued that unionization fabricates higher wages at the expense rate of lesser jobs; if some industries are ununionized whilst others are unionized, wages would decline in ununionized industries. Rise of wage rates, price of labors above the equilibrium price would result in unemployment. It is due to the reason that it would be no longer worthwhile for industries to employ such laborers whose work is relatively less worth than the minimum rate of wage set by unions.

Political views are also concerned with the fact that trade unions are often partial with inside workers, i.e. those having high productivity and secure job at the expense of outside workers, shareholders of the unionized industry and consumers of the services or goods produced. The ones who are to suffer most due to presence of trade unions are unemployed people or people at risk of unemployment or people who are unable to grab a job in their desired field. Moreover, where union shops or closed shops are present, unions can act like monopolies, where a labor might not be allowed to choose not to be a part of and a particular company is not allowed to employ ununionized workers. It may lead in similar troubles confronted by any other monopoly. Even, by introducing charges higher than the equilibrium rate, trade unions promote deadweight loss.

One of the major insignificances of the existence of labor unions is harm to ununionized workers and industries. Advocates of labor unions often declare that higher wages charged by labor unions can be paid to workers via company profits. However, as pointed by several economists, profits of companies are quite rarely that much sufficient. About eighty percent of national income is expensed as wages and only six percent is the remaining profit after tax payment, thus offering very less room for increase in wages. A portion of the company’s profit may also be invested for increase in capital amount that in turn raises the value of increasing wages or labor. If profits were to be completely expensed, this scope of wage increase would also be diminished.

Several influential economists argue that effects of union activities in order to influence expenses are potentially quite harmful, thus initiating an ineffective marketing system. Moreover, labor unions divide the labor pool in methods representing the state of technology at the time of formation of labor unions and the organization lacks potential to change. Thus, with the change of business models and technology, union activities may lock in labor inefficiencies. Just for instance, in case of theatrical lighting, show and lighting technology is to be managed by members of electricians unions, in place of theatrical workers unions as the work demanded knowledge in electronic and lighting technology. However, with recent computerized controls, adequate knowledge of electrical or lighting technology is unnecessary but still a certified union electrician is...