Economics of Unions

Economics of Unions

The strike that involved 125 000 teachers in Ontario is a good example of how unions can impact the relations between employees and employers. During the strike, around 5,000 schools were closed. The objective of the four unions whose members were teachers based in Ontario was to send a message to the Ontario government regarding their views on the reduction of funding of schools. The low funding and big classes were key issues that made the teachers strike. This case is also an eye-opener related to industrial relations in Canada. The industrial relation was widely used during World War II. The two reasons for its use are various war-time industries and the application of PC 1003 under the Federal Cabinet (Riddell, 1993). The Order-in-Council initiated the adoption of a model of industrial relations that was followed in Canada. The fundamental provisions of this model were the procedure of certification of unions and the responsibility for an employer during collective bargaining.

In its broadest meaning, industrial revolutions entail all aspects that cover the relationship between employees and employers. At the individual; level, industrial relation involves the planning and staffing of the employees. In countries where employees are allowed to form a union, their relationship with the management is likely to cause problems that can be addressed by unions through collective bargaining. In addition, the employees can engage in strikes like the one that occurred in Ontario.

Unions are important since they provide an opportunity for collective bargaining. In the case of the Ontario strike, it is clear that the teachers were not given an opportunity to freely bargain grievances that related to the working conditions. In addition to the reduction of funding in local schools, the four unions wanted the Canadian government to improve the working conditions of teachers. Collective bargaining is an important role of unions since it makes their members get the anticipated wages and benefits. In Canada, unions underwent two major stages that have positively impacted on the way trade unions operate currently. The first stage was the crafting of unions to ensure all employees in a specific occupation or trade were covered. For instance, the strike that occurred in Ontario ensured that the interests of teachers were clearly depicted. The second phase is the industrial unions that relate to specific industries, for example, automobile and steel industry.

Ontario strike was significant since it had the responsibility of ensuring that the teachers work in a favorable condition. In the US, the number of teachers covered by a collective agreement is higher in Canada. Union membership and union coverage are different. For a worker to be covered by the collective agreement of a union, they do not need to be members of a specific union.  Once a union is certified, it is treated as a bargaining avenue to represent its members. In Canada, regulations that collectively controlled the bargaining power of employees passed two major stages (Currie, Janet and Sheena McConnell, 1991). The first stage indicated that collective action by workers was a criminal conspiracy. The second phase that was implemented in 1872 after the adoption of the Trade Unions Act provided an opportunity for unions to be formed, and any willing member could join.

The conditions of employment and the level of wages earned by employees can be decided through collective bargaining. The neoclassical analysis that was adopted by many organizations were focused on determining the amount of wages and conditions of employment that were acceptable to employees and employers. The interference of politicians is a major issue that impacts on the operations of unions. Nonetheless, the bargaining power of Canadian-based unions aims at attaining the mutual benefits of the employers and employees. The productivity of employees is a major concern of the unions since they are aware that if their members are working under unfavorable working conditions, the economy of the total country will be negatively impacted. In the scenario of the strike by the Ontario based teachers union, teachers may in the future operate independently by the Canadian government, and more funds would be available for the learners.

Through the bargaining power of the government, trade unions are able to improve the working conditions of their members. For example, if the salaries of US customers are increased, their productivity will be greatly increased. As a result of the strike by the union teachers in Canada, the teachers will enjoy more fringe benefits even though this may distort the Canadian economy due to the standardizing of benefits and wages across all sectors.

Lack of motivation is a key issue that triggered teachers in Ontario to strike. Union wage has negative impacts on motivation. The bargaining process adopted by unions in relation to wage is a major departure from the market wage-atmosphere in contemporary economies. The standardization of wages, as required by unions, has a substantial impact on wage dispersion (Gunderson and Ponak, 1995).  Even though the ability of unions to reduce labor supply to industries with an objective of extracting above-market wages is beneficial to employees, it can be harmful to employees and organizations.

Despite the negativities that may emanate from objections by unions, it is essential for government and employers to engage all parties and ensure that a sustainable solution is attained. For example, the poor pay and chronic underfunding in the US has made teachers consider quitting (Sachin, 2020). The US government fails to engage teachers making the number of the latter decrease and making students be educated by untrained and inexperienced teachers. Even though most teachers would like to strike with the goal of making the US government increase its funding for schools, they lack opportunities. In the case of Ontario, most Canadians appeared to support teachers’ views. The results of the polls conducted Environics noted that most of the people living in Ontario supported teachers. The main reason for the lack of support from local people may be due to lack of dialogue between the four unions and teachers, in addition to little concern regarding the quality of education offered to the students.  The strike is a good indicator of how unions can be used as a way of forwarding the grievances that teachers have globally.

References

Currie, Janet and Sheena McConnell (1991). Collective Bargaining in the Public Sector: The Effect of Legal Structure on Dispute Costs and Wages, American Economic Review, 81: 693-718.

Gunderson, M. and A. Ponak (1995). Union-Management Relations in Canada (3rd edition). Don Mills: Addison-Wesley, 1995, Chapters 2, 3 and 4.

Riddell, W. (1993). Unionization in Canada and the United States: A Tale of Two Countries, in D. Card and R. Freeman, eds., Small Differences that Matter: Labor Markets and Income Maintenance in Canada and the United States. Chicago: University of Chicago Press.

Sachin, M. (2020). Why Ontario School Strikes are Necessary.