Question

What are the pros and cons of unions. Think about monopsonies and how they impact the economy. Do you think unions are overall beneficial for the workers? Answer these questions is a three paragraph essay.

Answer 1

Pros of unions are:

Unions have the ability to negotiate higher pay, better healthcare for their members and improved working conditions. This ensures sufficient wages for trade union employees, equal coverage and improved health.

Unionized workers are assured on-the-job union activism. The union, not the boss, has the power to decide disciplinary action, including termination, which is usually similar to further job protection.

A union gives control to the workers through a common voice. Employers have no choice but to bargain with employers to ensure efficiency is maintained. The right to strike is the ultimate galvanizing demonstration for the worker.

Cons are:

Union talks will lead to a rise to unreasonably high rates of salaries and other related costs. If the company can not afford the high salaries and union employees' expenses, then there are no choices left. It can increase prices for the products or services it supplies. Its labor can be outsourced. It may reduce the number of new hire employees, leaving a shortage of workers to handle the overall workload. None of these choices are suitable for workers, and may lead to an environment that is potentially combustible at work.

Union defense hinders employers from disciplining, firing or even recruiting workers. Unions also have an element of Cronyism. Unions can decide which fold they accept. Membership in many unions thus is less about competence and competency, and more about networking.

The required conflict between employers and labor union workers is often counterproductive. The relation's combative nature encourages conflict in the workplace rather than cooperation and collaboration in the workplace.

Monopsony is harming growth and raising prices because it works much like monopoly: by cutting output. The monopolist increases prices to maximize his income and thereby reduces demand (because less customers are able to pay those higher prices).

Similarly, a monopsonist reduces salaries to the employer below the value of the employees to increase his income. Since not all employees are able to work at such depressed wages, monopsony is causing some workers to leave.