Chapter 15 Impact on general wage and benefit levels—do unions get higher wages and by how much, are wage cuts more prevalent in unionized organizations - Unions make a difference in wages o Union workers earn between 8.9% and 12.4% more than nonunion workers - Size of gap varies from year to year o During periods of higher unemployment, impact of unions is larger o During strong economies, union-nonunion gap is smaller - Union-nonunion wage differentials in public sector o Union employees earn about 22% more than their nonunion counterparts Impact on the structure of wages—benefits, two-tier wage structures, worker vs. management wages - Impact on general wage and benefit levels o Presence of a union adds 30% to 40% to employee benefits o Greater percentage of total wage bill allocated to employee benefits Benefits are 37.9% of total compensation package for union workers Benefits are 27.8% for nonunion workers Higher costs due to • Higher pension expenditures • Higher insurance benefits - Impact on structure of wages o Two-tier pay structures are a phenomenon of union sector Contract differentiates pay based upon hire date • Employees hired after a target date receive lower wages than their higher- seniority peers in similar job o From management’s view, wage tiers are a viable alternative pay strategy Cost control strategy to allow expansion or investment Cost-cutting device to allow economic survival o From a union’s view, wage tiers are seen as less painful than Wage freezes Staff cuts among existing employees o
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- Fall '12
- Management, Employee Benefit, Trade union, unionized firms