Unions’ Response to Neoliberal Globalization
The Unions’ responses to neoliberal globalization have not been positive. This has been evident from their poor performance over the last decade. The concept entails a set of policies that guides the global operations of business organizations. Specifically, they entail the regulations as to the labor costs incurred businesses to ensure employee social growth. The main aim of introducing the neoliberal globalization was restore profitability of the firms as well as economic restructuring over the radicalization period. Additionally, they were related to the labor policies whose main goal was to make the trade unions weak and ineffective. The effect has been the continued weaknesses of the unions seen by their inability to draft collective bargaining agreements on behalf of members. Consequently, there has been a major challenge in defending the members’ rights (Cooper et al. 339 – 362).
A number of studies have been conducted over the unions’ response to neoliberal globalization. For instance, Adnan (89), neoliberal globalization and capitalism in Bangladesh contributed to the poor working conditions due to the ineffective labor laws that are adopted by the employers. Employers exploit workers through unjustified compensation alongside harsh employment conditions which makes work unbearable. Generally, there has been a decline in the number of trade unions, especially in the private sector as a result of the introduction of neoliberal globalization. It is expected that the trend will continue to grow as the neoliberal globalization continues to increases (Nissen 323). There are number factors that have contributed towards the continued decline in the effectiveness of the trade unions as discussed by Nissen (323 – 328). One such factor is the structural and occupational changes in the labor market (Nissen 323 – 328). These changes have seen private employers discrediting the need for unions to take care of the employee social welfare.
There has been a negative response towards the neoliberal globalization in regard to the labor relations and involved costs. Majority of private employers have not adopted unionism as part of the organization. An example of such organizations is Wal-Mart. Despite the disengagement with the unions, Wal-Mart has continued to incur low labor costs which have further contributed to its positive financial performance (Lichtenstein 1463). Wal-Mart, as a US supermarket has had poor response to since its inception (Lichtenstein 1462). Moreover, the company has been able to manage the largest number of employees across its stores. Currently, it employs 1.3 million people, both directly and indirectly (Lichtenstein 1462). Despite the good financial performance, Wal-Mart has harsh labor policies and regulations which discourage unionism. Instead, it exercises full control over its employee’s social welfare.
Target which is reported as the third-largest retailer in the United States is also a staunch anti-unionism (Nolan 1). Like Wal-Mart, the company has low labor costs which enable it to have a higher financial performance. It offers high compensation packages for its employees, hence no need for unions that take care of the employees’ welfare (Nolan 2). In fact, both the Wal-Mart and Target, US biggest private retailers view unionism as a way through which the existing unions exploit their resources. The other reason why Target has been against unionism is the fear of loss of its business culture which it considers as precious. With unionism in both the organization, the retail businesses will be forced to pay high wages and employment benefits to its employees who will make the cost of operations high while lowering the overall business profitability.
Unions’ response to neoliberal globalization has not been positive given the operational implications. Neoliberal globalization has made the unions irrelevant as private organizations, who were the initial pioneers of unionism no longer feel the need of it. As a global concept, it has detached the private entities from the government regulations and policies. Therefore, through neo-classical globalization, there has been a significant decline in the need for unions as the employers are able to cater for the need of its workers. Furthermore, it has protected the private entities from the bonds that are imposed by the governments and which have an effect on the overall operations of the enterprises. Through the reduced government-imposed bonds, the unions have realized that the concept of unionization of the enterprises’ employee welfare is no longer necessary. The concept of neoliberal globalization has enhanced the principle of individual responsibilities among employees, making unions irrelevant in their corporate culture. Although neo-liberal globalization eliminates the need for government intervention, this has adverse effects on the business income due to the high operating costs. Generally, the unions have not had a positive response towards neoliberal globalization.
Finally, unions view neoliberal globalization as one of the ways through the management control is enhanced in these organizations, hence a better performance. For instance, in the case of Wal-Mart and Target, despite the lack of unions, they have been able to report better performance as well as incurring low labor costs. It is the culture of labor unions to advocate for equal treatment of employees, especially in the private sector. However, this would be accompanied by high costs of labor and wages which makes the business costs high and unbearable for the companies.
Strategies Used By the Unions and Firms
Firms and unions employ various strategies in managing the neoliberal globalization which has effects, not only to the union, but also to the private firms across the world. The strategies and actions are undertaken with an aim of ensuring the organizations continue enjoying better performance. The first strategy is deregulation of the unions by the government. In most instances, the unions are regulated by the government as a way of ensuring that they remain effective. Deregulation of the government influence on the unions through policy development has an effect of increasing the profits earned by the firms. For instance, in the case of Wal-Mart that continued to enjoy high profits despite the strong opposition of the unionization concept. Deregulation by the government ensures that the businesses keep their costs of operations low as they improve on the employee social welfare.
The other strategy that the firms can adopt is the privatization of business. This involves the change of all the government-owned entities to private firms. With privatization, firms improve on their efficiency. Despite promoting individualism and concentrating wealth to few individuals in the economy, it is considered as one of the common strategies that can be used in managing the neo-liberal globalization by both the firms and the unions that are engaged in the process. Unionization in most organization makes the employees to develop the idea of public good; thus, forgetting to take individual responsibility as expected by the labor laws. Therefore, by promoting individual responsibility among employees, there is an improvement in the business performance through an improved cost management in the business, hence high profitability. Reducing taxation from the business income lowers the operating costs which increases the profitability. Individual responsibility enhances personal development in the modern business. A reduction in taxation is a strategy that is aimed at minimizing the business costs. At high taxation rates, the businesses tend to incur high operational costs which lower the profitability and efficiency. Therefore, there will be a high performance in the business. Transformation of business is; thus, achieved (Nissen 328 – 338). Therefore, privatization minimizes exploitation of the employees despite the increased influence on the taxation systems (Gunnigle, Patrick, and Gregor 219)
Another action that can be taken by the union or firms is to reduce the public expenditure on the services that are costly to the government. This aims at minimizing the burden that the government bears in providing these services. This is closely related to the privatization of the entities as they serve the same goal of minimizing the costs that are incurred in the service provision. There would minimal opposition of the action since the unions rarely oppose the government for tax benefits and subsidies that are offered on the goods that are offered for sale in the market. Additionally, an action of creating the market rule would also be an appropriate strategy by the firms and unions in managing neoliberal globalization. This involves eliminating the bonds that have been created by the government on the firms and unions. Examples of such control include price controls, reduction in the wages paid to the workers. It also involves removal of the workers’ rights as established by the previous unions that were established before the neoliberal globalization.
Effective Actions
The effective actions or strategies are determined from their ability to improve the business performance through lowering costs and increasing profitability. The effective actions are selected from the available strategies that are available to the union and firms. Given the decline in unions in the private sectors, there was an improvement in the efficiency of the businesses. According to Kleiner (519), there has been a decline in the rate of unionization with the growth of neoliberal globalization. Unions engaged in educating the workers on the policies and working rights as provided for by various labor legislations in the countries. The effect is an enhancement of the community perception of the workers, thereby limiting individual responsibilities. The most effective action is the reduction of taxes. Reducing the taxes affects both the costs and profitability of the business. When the taxations are reduced, there will be a reduction in the costs of operations and an increased income earned by the business from its operations (Adnan 87- 128).
Privatization is another strategy that the firms can adopt and is considered as effective in managing the neoliberal globalization. With the privatization, there is need to change all the government-owned entities to privately owned firms with an aim of improving the management control and overall operational performance of the business. The business firms records an improved efficiency in the business performance. Despite promoting individualism and concentrating wealth to few individuals in the economy, it is considered as one of the common strategies that can be used in managing the neo-liberal globalization by both the firms and the unions that are engaged in the process. Finally the privatization concept minimizes exploitation of the employees despite the increased influence on the taxation systems within the economy. Therefore to manage the neoliberal globalization and ensure business growth as in the case of Wal-Mart, privatization is necessary (Bronfenbrenner, Kate and Tom 1 - 23).
As seen from the response of both the union and firms from the neoliberal globalization, there has been a consistent negative response towards neoliberal globalization. This is due to the high costs that are associated with them that make the costs of doing business high for the company. Therefore, to manage the issue, there is the need to reduce the costs of operations. One common ways of reducing the costs is reducing the taxes as well as the labor expenses. The concept of neoliberal globalization has been built from the basis of a decline in the number of unionizations as a result of the legislation that were introduced by the government to ensure that there is a smooth transition from public entities to private entities. It is expected that there will be a continued decline in the number of unions due to the effect of neoliberal globalization
Recommendation
There is the need for employers to resist the globalization and attempt to create an economy that is based on different economic principles that guides its operations. The current globalization has adverse effects on the business growth as seen from the discussion. Avoiding unions will ensure that the businesses in their operations through expansion of the business activities. The companies will be able to management control. Management control is essential for operational efficiency in the business. Decision-making process becomes easy when there is the management control in the business. Furthermore, by resisting the globalization, management control is improved, further contributing towards the business performance. Resisting globalization also an effect of increasing the individual responsibility and discourages communism which limits business growth through a poor decision-making processes by the management as they are unable to take individual responsibilities for their actions in the company (Ross et al. 27).
Resisting the neoliberal globalization requires the creation of an economy that is based on different principles as the ones presented in the previous scenario. However, the economy can borrow from the other economies without the globalization concepts. Examples of the principles include low taxation that is charged on the business income, thus, lowering the labor costs as net profitability increase. Therefore, based on the above discussion on the employer union avoidance strategies, new businesses should develop the strategies that facilitate the union avoidance as in the case with the Target and Wal-Mart. Since the neoliberal globalization affects business performance, it should be adopted by the other new businesses.
Works Cited
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Gunnigle, Patrick, Paul Marginson, and Gregor Murray. Multinationals' union avoidance practices at new sites: Transatlantic variations. Industrial Relations Research Unit, Warwick Business School, 2009.
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Nissen, Bruce. "The Recent past and near Future of Private Sector Unionism in the U.S.: An Appraisal." J Labor Res Journal of Labor Research 24.2 (2003): 323-38. Web.
Nolan, Hamilton. "Behold, Target's Brand New Cheesy Anti-Union Video."Http://gawker.com/behold-targets-brand-new-cheesy-anti-union-video-1547193676. Gawker, 19 Mar. 2014. Web
Ross, S., Savage, Black, E, and Silver, J. "Building a Better World: An Introduction to the Labour Movement in Canada. 3rd ed. Halifax and Winnipeg: Fernwood Publishing. Chapter 9." (2015): Web.
