How do unions affect business?

The evidence is mixed on how unions affect companies’ bottom lines, and most beliefs are based on ideology rather than evidence, experts say.

“It really is ideological,” said labor economist Barry T. Hirsch of the Andrew Young School of Policy Studies at Georgia State University.

If a union exists, the type of relationship a company has with it plays an important part. Keep in mind, though, many factors determine business success.

Higher productivity depends on a cooperative relationship between management and workers rather than an adversarial one, agreed both Hirsch and John Logan, director of Labor and Employment Studies at San Francisco State University.

Firms don’t close up because a union comes in, but there are economic concerns, Hirsch said. Unions can raise productivity, but Hirsch’s research finds they don’t fully offset the higher wages and benefits they gain for workers. That might mean less investment or growth over the long run, he said.

Additionally, union governance reduces managerial discretion and is slow by its nature, so companies may not be able to respond as quickly to changes in the global economy, Hirsch said.
“That tends to make unionized companies a bit less competitive,” Hirsch said.

Logan said the economic evidence is mixed, and companies that cooperate with unions can be “very competitive.” Such relationships show positive impacts on productivity, turnover and training.

Yet, some companies are also highly profitable without cooperating, he said. Then, states with high unionization rates have done well in job creation while some right-to-work states have not.
Basically, it varies from case to case.

“Empirical reality needs to be separated from ideological belief,” Logan said.

Willie West, owner of West Sheet Metal Company in Sterling, maintained his union membership even when he went on to own his company, where he supports his workers’ right to organize.

The Sheet Metal Workers’ International Association ensures continual training for the workers and keeps the workforce stable. In West’s industry, training increases productivity because of improved work quality. He also believes workers who earn a living wage with health benefits aren’t stressing about survival and are more productive.

Increased wages benefit the community because workers have more to spend there, he added.
Yet, unions, like any other business or organization, can be good or bad depending on how well they’re managed and what their goals are, West said. Their goals should be to provide the best trained and hardest working employees for the employer, and then they can be justified in their demands.

“In any type of business arrangement, the management and employee relationship, I think, is important,” West said. “It can be a partnership, which I think is the ultimate goal whether it’s union or a regular workforce.”
 
Swedwood update

Swedwood Danville and the union could begin bargaining in a month or so.

Representative Bill Street of the International Association of Machinists and Aerospace Workers said the union made a request to bargain when the National Labor Relations Board certified the union. The company offered up dates in September and October, he said in an email.

The local union voted on the name W 727, in reference to the union election date in July, Street said. Meanwhile, the union is training stewards to represent workers in situations that may lead to discipline.