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Are Trade Unions Unnecessary?

Info: 1910 words (8 pages) Law Essay
Published: 12th Aug 2019

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Jurisdiction(s): US Law

A hundred years ago the trade unions played an important part in the industry of our country. They negotiated the salary, hours of work, safety standards, and benefits. Both the employees and the employers benefited from their existence. Better wages and conditions of work led to higher productivity and so greater benefits for the employers. However, the situation now has changed. The employer is enlightened. He knows the labor law and avoids breaking it. He also knows the methods that must be used to motivate employees and uses these methods. These bring benefits both to the employer and the employee. In such a situation there is little place for trade unions. They upset productivity based actions. They object to benefits and rewards and come in way of increasing investment. In an environment where employers seek to be ethical, respect stakeholder rights, and motivate employees to work harder and better, trade unions with their rigid outlook have become unnecessary.


While a hundred years ago trade unions were necessary, with the enlightenment of the modern employers trade unions have become unnecessary.


Trade unions were necessary a hundred years ago when the workers were treated badly and that led to exploitation of workers. At that time the workers were paid very low wages, benefits were almost non existent, and workers were made to work for long hours without rest or respite. Those that worked very long hours were not even given adequate overtime. What is important is that the trade unions gave employee grievances a voice. They bargained for the essential rights of the workers. The trade unions were able to secure fair wages for the employees and in general reduced unfair treatment to employees. However a hundred years ago the labor laws were rudimentary and the owners treated workers as objects that were to be make the most of. Even from the perspective of employees there were several benefits in having unions. The employers found it convenient to negotiation issues with one union leader. In addition, if the employees got what was due to them and felt secure because of the union the employees performed better and this increased the productivity of labor. The employer felt relieved when he dealt with the unions because it protected him from wild cat strikes and unexpected picketing and overtime bans. This was one hundred years ago.

Now the enlightenment of the employer has made trade unions redundant. On one hand the employer has become enlightened because of the numerous laws pertaining to employment. On the other hand the need to attract, train, and retain the best workers has changed the attitude of employers towards workers and has make trade unions redundant. At the same time since trade unions tend to drive up wages, they cause an increase in unemployment. They drive up the wages well above the market equilibrium level through threat of strikes. The trade unions address only the needs of their members and ignore the employment scenario altogether. The strikes called by trade unions cause an increase in the costs of the company an often drive businesses into losses and even into liquidation. Currently, since the employer is enlightened, he does not exploit workers but tries to attract and retain the best workers offering attractive wages and benefits. The condition of workers that existed one hundred years ago simply do not exist now. The rights of employees are adequately protected by the labor laws of the country and help the employees get their legitimate rights. On the other hand currently, unions unnecessarily bargain for and drive up the wages. This has two types of effect. If the cost increases the firms become less competitive and lose their market share. On the other hand those firms that are able to increase their prices and pass on the costs to the consumers directly fan the fire of inflation and this leads to reduction in real wages. In each case the interests of the workers is compromised.

There are strong reasons why we assert that the employer of today is an enlightened person. The first source of enlightenment of the employer is the application of labor laws. In every country there are laws related to minimum wages and hours worked. For instance, in the US there is the Fair Labor Standards Act. One hundred years ago one of the main concerns of trade unions was to fight for safety and health standards of workers. Currently, the employer is enlightened because he strives to comply with the provisions of the Occupational Safety and Health Act. Even in case of difficult and dangerous jobs like mining there are laws like Mining Safely and Health Act.  Almost every issue related to employment that unions meaningfully addressed a hundred years ago, currently there are strong laws that protect the rights of the workers. For instance, the unions argued for benefits, retirement benefits and workers’ compensation. Currently, the employers are well aware of the requirements of laws like Employment Retirement Income Security Act and the Family and Medical Leave Act. On the other hand there are strong government enforcement agencies to ensure that these law are properly and adequately implemented. The labor laws of today are far advanced and protect the rights of workers more comprehensively than what trade unions one hundred years ago could have imagined.

Another source of employee enlightenment is the realization that an employee is a stakeholder in a company and it is ethical for the company to protect his legitimate rights. Employees are striving to get their corporate governance in place. They are aware that employees have rights when they are hired, they have rights to time off from work, and rights that protect them from workplace discrimination. In fact both the employers and employees are aware of the employee rights and employers on their own take steps to protect the rights of the employees. In fact, employers compete on who pays the highest salaries, who provides the best benefits, and who provides the greatest security to its employees. On one hand the employers strive to protect the rights of employees so that they comply with the law on the other side the employers protect the employee rights as an expression of corporate governance. Every employer is striving to be ethical and at the same time wants to be perceived as ethical. In this context, trade unions can lead to disruption of work and suffering for the employees. The trade unions exert monopoly power and this cause deadweight welfare loss. In fact in several cases where trade unions have persisted with their demands the firm’s incentive to invest gets reduced if the businesses fear that trade unions may reduce their profit in an unfair manner. This leads to a spiral of unemployment and is not in the interests of employees in general

Both the employer and government agencies for enforcement of labor laws are aware of employee’s rights in the workplace, the procedures for discharging employees, and collecting unemployment benefits. The employer is aware of his responsibilities and in most cases discharges his responsibilities. For example, if there is a case of sexual harassment at work, the employer strives to follow well-defined procedures so that employee grievance is addressed. Similarly, the employer knows the current limits for minimum wages under the Fair Labor Standard Act and sets the wages of the lowest paid employees above that level. In short there is no need for a trade union to protect the rights of the employees. Similarly, most of the employers are aware of the OSHA requirements and so he complies with the safety and health standards mentioned in that act. With strong labor law enforcement provisions in place no employer will knowingly transgress these laws. The trade unions were relevant one hundred years ago when the labor laws were rudimentary, the employers believed in paying the lowest wage and providing the least expensive conditions of work. The employers at that time were not enlightened. They never treated the workers as stakeholders with rights. On the other hand there was no government agency dedicated to protecting the rights of workers. Under such circumstances the trade unions were a boon. By protecting the rights of workers they improved the motivation of workers to work and also improved their productivity.

Currently, the employers are enlightened in another way. They seek ways of motivating employees to work well. For instance, an employer seeks not only to satisfy the physiological needs of the employees but also takes care of their safety, social needs, esteem needs, and self actualization needs. By addressing the needs of the employees, the employers seek to strongly motivate the employees. In such situations, a trade union with its rigid perspectives on compensation and reward system becomes a barrier. The enlightened employer seeks empower employees by enabling them to exercise self direction, self-control, and seek responsibility. Enlightened employers make their employees feel that they have achieved something. They encourage responsibility taking, advancement, and self-growth. In such situations the trade unions are anachronisms. They can impede the progress of the employees and their employers. Trade unions typically address what is described as hygiene factors. These are company policy, working conditions, salaries, and security. However, the enlightened employer knows that apart from hygiene factors he must address the motivator factors to improve the job satisfaction of the employee. The trade unions can derail the process of increasing job satisfaction. From the perspective of David McClelland’s three needs theory, the trade union addresses the need for power and the need for affiliation of the employees. The result is the employees’ need for achievement is not fully developed. The enlightened employer however, seeks to develop the achievement need of his employees because these help improve his productivity and also help the employee achieve his personal goals. The enlightened employer encourages taking personal responsibility, feedback, and risk, whereas the trade union focuses on influence, and competitive bargaining. The employer typically sets challenging goals for the employee balanced with appropriate rewards, On the other hand the trade unions restrict work and land up reducing output.

If unions were banned, would there be inequity? No, one hundred years ago there could have been inequity, however, today the enlightened employer knows that if there is inequity there will be lower productivity, reduced quality, higher absenteeism, and high turnover of employees. So, to avoid these pitfalls the enlightened employer avoids inequity.


We conclude that even though trade unions may have been necessary one hundred years ago, because of the enlightenment of the employer the trade unions have become unnecessary today. We have examined how the employer of today has good knowledge of the present day labor laws, how well these laws are complied with and are enforced, and how the employers seek to motivate employees by treating them fairly, paying them well, and rewarding them. (1,811 words)

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