Labor_Union_Challenges

Labor Union Challenges From the information that I’ve acquired throughout this course, and some research done on the side, I have gathered what I think to be the five most important challenges effecting labor unions within the past 5-10 years. These challenges are: • Foreign direct investment • Multinational enterprises • New technologies • Financial markets and, • Deregulation and liberalization Though I overall believe that some labor unions are not adequately designed and innovative enough to currently operate in this globalizing economy, in this essay, I will still examine these five challenges towards today’s labor unions. The challenges I have listed are all appendages of the generalized threat to these labor union, globalization. I will start off by giving an individual description of each challenge then segue into giving reasons as to why I believe each challenge to be important and what I’ve researched to be the labor unions possible means of contesting these challenges. Though globalization offers new worldly opportunities for trade like increased competition between enterprises, it had created a balancing effect between thriving and suppressed economies. The balancing effect causes thriving economies to decline while suppressed economies rise. The internationalization of production directly affects the environment of collective bargaining. Globalizations foreign direct investment can be defined as cross border expenditures of entities to acquire or expand corporate control of productive assets. FDI has been growing dramatically as a major form of international capital transfer. According to a Google search of the FDI world flows it has been shown that between 1980 and 1990 FDI have tripled. These trends are theorized as predicting the scale and scope of multinational enterprises by looking to differences in competitive advantage across firms or countries that might lead to corporate control across borders. This poses a threat to some labor union because of the capital as a whole that may be leaving a country to subsidies foreign employment and labor unions have little no jurisdiction in this environment. Capital is more mobile than employees making it tough for employees to organize. Also the relationship between employees to employer has become more commercial. Multinational enterprises are defined as one that has operating subsidiaries, branches, and or affiliates located inside a foreign country. The ownership of some multinational enterprises is so dispersed that they are known as transnational corporations. These enterprises are usually managed from a global perspective rather than by a single national perspective. Like the foreign direct investment, multinational enterprises have an exclusion effect on labor unions because of the increasing employment rate of foreign employees through MNE’s. MNE’s create rootless working environments and tend to relocate to countries with no independent trade unions The next selected detrimental impact is new technologies. The labor unions in the past have grown to develop in acceptance and even a dependence of certain technologies; it can also have a negative black swan impaction. Similar to the industrial revolution, the IT revolution is replacing human labor with intelligent machines. The pressure to unions is obvious. The threat of new technologies is rendering union members physical human jobs as obsolete. The fourth threat is the financial markets. It’s easy to see the impact that financial markets have just look at our current economic state. Among a few other events, sub-prime lending, incorrect prediction of risks, and liquidity short falls of the banking system has created the crash of several financial markets and large institutions. The US unemployment rate has increased by 10% in 2010, and quite similar to the challenge of new technologies, the financial markets have the potential to threaten the jobs of union members. The fifth challenge to labor unions is the deregulation and liberalization. Counties have lowered barriers to trade and investment by liberalizing trade quotas, tariffs, deregulated national controls (M.Carrell). Many public sector jobs have been privatized changing the regulations of labor union oversight. Deregulation has challenged the long established systems that have created social justice and economic equity Overall because of these five challenges, collective bargaining rights and traditional employment relations with unions are being affected. Competitiveness and flexibility is the type of environment in operation within enterprises. This causes employees to be in fierce competition for keeping their jobs and undermines union member’s rights. Though these explanations seem extremely focused at the member union level, the blanketing affect is done to the unions as a whole who can’t sustain memberships. I believe that in order for unions to see life in their future and re-experience numbers and control like those of their glory days, unions will have to turn to innovation. International frame works will have to be created at the global level. A proven example of this can be seen through what some of the car dealerships done with their outsourced arms. An International Framework Agreement was negotiated to ensure the proper treatment, healthy work environments, decent wages of their employees, and the implementation of trade unions. Unions have a significant amount of information and success with what they have provided its members with in the past. There is definitely a financial crisis at bay and the national unemployment rate is at an all time high. If unions are able to weather the storm and innovatively find a way to fit into today’s diverse globalized economy, they will see success and people will feel that they have a need for their representation.