Union Shoots Down Higher Wages

by

United Food and Commercial Workers Local 23 has taken Gian Eagle Foods to court over raises the grocery store gave some union members.  James Sherk questions if unions really do speak
for their members in The Foundry.

Managers at the Giant Eagle grocery in Edinboro, Pa., wanted to reward hard work. So they boosted the wages of two dozen high-performing employees above their union rates. But United Food and Commercial Workers Local 23 was not pleased. The union argued the pay increases violated their contract, took Giant Eagle to court and forced it to rescind the raises.

Why did Local 23 oppose higher pay for its members? Because it upended their seniority system, allowing junior employees to make more those with more seniority. Local 23 wanted uniform pay scales—even if that meant cutting some of their members’ wages.

Workers today want—and expect—recognition for their contributions and abilities, but uniform-pay scales forbid that. Such contracts could work in the assembly line economy of the 1930s, where workers performed essentially interchangeable jobs. Not in today’s knowledge economy. Why would a software designer or a search-marketing consultant want one?

During organizing drives, employers point out that unionizing makes it hard to reward individual achievements. Nor can employers tailor working conditions to individual situations. Unionized employees must speak with one monolithic voice, through their union. Many workers feel this ignores what they bring to the table.

Unions counter that they raise wages for everyone—but in today’s competitive economy, they often cannot. Unionized companies that pass on higher wages through price increases lose customers and shed jobs. General Motors’ employees learned this the hard way. Consequently the union wage premium has shrunk over the past generation. Studies find that average wages change little in most cases when unions win organizing drives.

But without wage increases, why pay union dues? Polls show just one in 10 nonunion workers wants to unionize. Unions need to overhaul their services to become relevant to today’s employees.