Trade Union Negative Effects

The Negative Effects of Unions First and foremost, unions in the work force were not always bad and were necessary in the past. They fought to raise minimum wages, improve working conditions and end child labor in America, all things extremely important at the time. However, in today’s society and the working environment, unions, are rather detrimental to businesses and the workers. Labor unions are defined as an organization of workers formed for the purpose of advancing its members ' interests in respect to wages, benefits, and working conditions. Labors unions began during the Industrial Revolution, a time where wages were low, conditions were harsh, and compensation did not exist. The first labor union in America was the National Labor

One of the big things labor unions fight for is higher wages, however money does not come out of thin air. Workers are paid by the money the company brings in through their profits, that is the selling of their product. With labor unions acting as a monopoly, they control the labor supply. With that, if companies do not comply with their demands, such as an increase in wages, they cut the company dry of workers. In return, if companies do comply with the demands of higher wages, then they have to raise the prices of the product. However, this hurts the company because their consumers do not want to pay higher prices. In all, the company loses money because their profits have gone down because they raised prices and, on top of that, they have to pay their workers more for their higher wages. A company cannot survive long on these finances, which can cause the company to go broke in extreme cases. As summarized by James Sherk, a labor economist, “Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members, but hurt consumers generally, and especially workers who are denied job opportunities.” In addition, another study has proved that “Unlike the findings with respect to wage effects, the research shows unambiguously that unions directly cause lower profits. Profits drop as companies whose unions win

The Unions were necessary to improve working conditions, daily wage, and working hours; however, since then, business and our nation has developed. There are laws and regulations now in place to protect the workers where unions no longer need to coalition for. Unions now have turned into money hungry organizations that no longer look out for the employees as a whole, but rather a small elite sector of them. Labor unions are monopolies that can cause companies to have setbacks or losses, they cause an increase in unemployment and, finally, cause major disturbances in the workplace by way of strikes. Today, it is better for companies to stray away from unions if they want to be