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<blockquote data-quote="Ricochet1a" data-source="post: 890119" data-attributes="member: 22880"><p><span style="font-size: 12px"><span style="color: #000000">Part 2:</span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">But there is another boost to the company’s profitability – employee satisfaction. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">The rate of turnover for the company drops to an average of 7 years – the employees are better compensated, so they stick with the job longer. For a company of 1000 employees, this means 57 fewer new hires each year, so a savings of $1,425,000 a year in recruitment/training expense – this goes directly to the bottom lineof the company, pushing up profitability up from $7,500,000 to $8,925,000. Still not the way it was pre-union for the company, but not Armageddon either (well maybe for the CEO and the top execs, they won’t be able to purchase anItalian sports car every three years). </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">In addition, employee satisfaction will increase, meaning there will be less wear/abuse of equipment (what was once “bleeding purple” in Express) – the employees will have a “connection” to the company, a sense of loyalty which will show in reduced costs for the company in other areas. Product quality will improve since the workforce is going to be more satisfied with their working for this company. Employees will know they are getting a good deal, so they will take an interest in keeping their “gravy train” rolling. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">So what goes on here is that 1000 employees (should the company take the logical course of action and agree to the contract demands) will have their lives improved, there will be that ever sought for “income equity” resulting between labor and remaining management and the customers will receive a better product. The shareholders will lose some profits; the upper management will definitely lose along with some cubical dwellers losing. You can’t make an omelet without breaking some eggs. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">So what to do if the economy takes a turn for the worse and the company hits a rough patch after they have already agreed to a union workforce? When the contract expires, the union will look at what the company can manage in terms of compensation, and alter its requests for compensation for its members. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">What many don’t understand, is that when a wage workforce operates without the benefit of a union, they are competing with every single unemployed individual out there for the job they are performing. If the national economy is doing well, unemployment is low and the pool of replacement workers is low. So workers will be compelled to leave for greener pastures – the company responds with increasing compensation – free market theory. This theory works really well for employers, since they don’t have to compensate based off what they can potentially compensate employees, but rather what the level of desperation is in the labor market – and bid the lowest wage they can to fill the jobs they have. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">Corporate America LOVES a moderate unemployment rate – they can bid down their wages and still get the job done if they are non-union. The only downside to a situation of moderate unemployment (for corporations) is that the unemployed don’t consume, so that cuts down on potential customers. If the company sells to a non-consumer market or an export market – they don’t care. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">What unions do is to remove a company’s workforce from having its members compete with the unemployed, and rather act as a single entity to negotiate with the employer the highest compensation possible. They present themselves as a unified whole, that if the company chooses to lockout, the company will incur some VERY high costs in terms of replacing the entire workforce. An individual doesn’t have a prayer against the corporate machine – they are operating in the labor free market which results in the lowest wage possible for the employee given the supply of available labor. Unions change the dynamic to that of what the employer can reasonably bear – with the very real possibility that if they don’t act “fairly”, they will incur the expenses of bringing in a new workforce. </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">Some may call it legalized extortion – it is merely bargaining between equals. As an individual (non-union), you are receiving the “low end” of the range of possible compensation packages – you have competed with the unemployed and have met the minimum requirements of the employer for the lowest wage the market would beart o have those requirements met – have you ever thought that you were being offered TOO MUCH for a non-union job you accepted, or just enough for you to take it? </span></span></p><p><span style="font-size: 12px"></span></p><p><span style="font-size: 12px"><span style="color: #000000">As a union member, you are receiving the “high end” of the range of possible compensation packages – <u>you have competed NOT with the unemployed, but rather against the business model of your employer. </u>The employer’s business model has certain fixed costs, which are used as leverage by the employees of the company to push their compensation levels up from the “free market” rate, to the “union rate”. If the company can reduced their fixed costs of employee replacement, they gain bargaining power. If the fixed costs of employee replacement increase for the company, a union is able to take advantage of that fact and get better compensation for the employees who do choose to stay and not subject the company to a high turnover rate. </span></span></p><p><span style="font-size: 12px"></span></p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 890119, member: 22880"] [SIZE=3][COLOR=#000000]Part 2:[/COLOR] [COLOR=#000000]But there is another boost to the company’s profitability – employee satisfaction. [/COLOR] [COLOR=#000000]The rate of turnover for the company drops to an average of 7 years – the employees are better compensated, so they stick with the job longer. For a company of 1000 employees, this means 57 fewer new hires each year, so a savings of $1,425,000 a year in recruitment/training expense – this goes directly to the bottom lineof the company, pushing up profitability up from $7,500,000 to $8,925,000. Still not the way it was pre-union for the company, but not Armageddon either (well maybe for the CEO and the top execs, they won’t be able to purchase anItalian sports car every three years). [/COLOR] [COLOR=#000000]In addition, employee satisfaction will increase, meaning there will be less wear/abuse of equipment (what was once “bleeding purple” in Express) – the employees will have a “connection” to the company, a sense of loyalty which will show in reduced costs for the company in other areas. Product quality will improve since the workforce is going to be more satisfied with their working for this company. Employees will know they are getting a good deal, so they will take an interest in keeping their “gravy train” rolling. [/COLOR] [COLOR=#000000]So what goes on here is that 1000 employees (should the company take the logical course of action and agree to the contract demands) will have their lives improved, there will be that ever sought for “income equity” resulting between labor and remaining management and the customers will receive a better product. The shareholders will lose some profits; the upper management will definitely lose along with some cubical dwellers losing. You can’t make an omelet without breaking some eggs. [/COLOR] [COLOR=#000000]So what to do if the economy takes a turn for the worse and the company hits a rough patch after they have already agreed to a union workforce? When the contract expires, the union will look at what the company can manage in terms of compensation, and alter its requests for compensation for its members. [/COLOR] [COLOR=#000000]What many don’t understand, is that when a wage workforce operates without the benefit of a union, they are competing with every single unemployed individual out there for the job they are performing. If the national economy is doing well, unemployment is low and the pool of replacement workers is low. So workers will be compelled to leave for greener pastures – the company responds with increasing compensation – free market theory. This theory works really well for employers, since they don’t have to compensate based off what they can potentially compensate employees, but rather what the level of desperation is in the labor market – and bid the lowest wage they can to fill the jobs they have. [/COLOR] [COLOR=#000000]Corporate America LOVES a moderate unemployment rate – they can bid down their wages and still get the job done if they are non-union. The only downside to a situation of moderate unemployment (for corporations) is that the unemployed don’t consume, so that cuts down on potential customers. If the company sells to a non-consumer market or an export market – they don’t care. [/COLOR] [COLOR=#000000]What unions do is to remove a company’s workforce from having its members compete with the unemployed, and rather act as a single entity to negotiate with the employer the highest compensation possible. They present themselves as a unified whole, that if the company chooses to lockout, the company will incur some VERY high costs in terms of replacing the entire workforce. An individual doesn’t have a prayer against the corporate machine – they are operating in the labor free market which results in the lowest wage possible for the employee given the supply of available labor. Unions change the dynamic to that of what the employer can reasonably bear – with the very real possibility that if they don’t act “fairly”, they will incur the expenses of bringing in a new workforce. [/COLOR] [COLOR=#000000]Some may call it legalized extortion – it is merely bargaining between equals. As an individual (non-union), you are receiving the “low end” of the range of possible compensation packages – you have competed with the unemployed and have met the minimum requirements of the employer for the lowest wage the market would beart o have those requirements met – have you ever thought that you were being offered TOO MUCH for a non-union job you accepted, or just enough for you to take it? [/COLOR] [COLOR=#000000]As a union member, you are receiving the “high end” of the range of possible compensation packages – [U]you have competed NOT with the unemployed, but rather against the business model of your employer. [/U]The employer’s business model has certain fixed costs, which are used as leverage by the employees of the company to push their compensation levels up from the “free market” rate, to the “union rate”. If the company can reduced their fixed costs of employee replacement, they gain bargaining power. If the fixed costs of employee replacement increase for the company, a union is able to take advantage of that fact and get better compensation for the employees who do choose to stay and not subject the company to a high turnover rate. [/COLOR] [/SIZE] [/QUOTE]
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