10 Collective Bargaining Pros and Cons

With programs like Act 10 in Wisconsin being politically popular, there has been a movement within the United States to limit the powers of collective bargaining that unions have. Although all unions have been targeted in some way, it is the public employees (outside of police, fire, and emergency services) that have seen a reduction in their rights.

Collective bargaining has certain advantages to consider, but there are certain disadvantages that are part of the process as well. Here are a few of the key points to consider.

The Pros of Collective Bargaining

1. It requires two parties to come together to talk.
There is often a divide between management and front line employees that doesn’t get bridged until collective bargaining negotiations begin. Of course both groups are going to be campaigning for what is in their own unique best interests. Coming together means compromising on both sides so that a beneficial agreement for both parties can be worked out.

2. It provides a solid foundation for wages and productivity.
Workers need to be able to make a certain living in order to provide for their families. Businesses need to maintain a certain amount of productivity in order to remain profitable. In public service, productivity is required to maximize the use of taxpayer dollars. Collective bargaining becomes the foundation for both needs to be effectively met the best way possible.

3. It gives everyone a chance to put some skin in the game.
Employees under a collective bargaining agreement all have some skin in the game when it comes to their welfare. They may nominate or vote on bargaining representatives to plan out the new contract instead of directly negotiating it on their own, but a vote counts just like sitting at a table to negotiate counts. The same is true for the business or the government. Everyone has an interest in seeing a positive outcome.

4. It’s a transparent process.
Although negotiating happens behind closed doors, the outcome of the new contract is very transparent. Everything is put into writing so that there are reference materials available regarding conduct on both sides of the aisle. This provides a mutual level of accountability that may not be available in other workplace environments.

5. Local dollars have more overall influence.
The value of money spent locally is nearly double the face value of the amount spent. That means every extra dollar that comes through a new CBA that is spent on local goods and services has a potential $2 benefit to everyone. Although that might mean an upfront investment for that community, it’s one that could pay dividends.

The Cons of Collective Bargaining

1. Employees under a CBA tend to have better benefits than non-CBA employees.
This is a key problem for public employees that have the right to negotiate. One of the primary sticking points in comparison is the responsibility for health care insurance premium payments. Before Act 10 in Wisconsin, public employees paid an average of 6% of their premiums compared to the 12% paid by the private sector.

2. It’s taxpayer money being negotiated for public sector employees.
In some ways, collective bargaining between government overseers and public employees is like being taxed without representation. Both parties are effectively government representatives and one group isn’t elected at all. Removing the ability to collectively bargain allows the entire public to have a voice in how job structures are created and compensated.

3. The end costs tend to be higher than they need to be.
What’s the difference between a $42,000 salary and a $43,000 salary? For an employee, that $1,000 is less than a 3% difference. When expanded over tens of thousands of employees that are represented at the negotiating table, it could be millions of dollars of cash needlessly spent.

4. It allows employees to hold the government hostage.
Collectively bargaining often means collectively striking if demands aren’t met. Although this doesn’t happen 100% of the time, the threat of it happening is there every time a new CBA needs to be negotiated at some level. By removing collective bargaining, this threat is also removed so that productivity can be guaranteed at some ongoing level.

5. There’s no guarantee that CBA workers will spend their money at local businesses.
It’s just as easy to purchase items on Amazon or through other online outlets as it is to buy something from a business down the street.

Collective bargaining has some definite economic advantages, but that may come at the expense of others. Allowing it or disallowing it is a decision that only local communities can make together. By evaluating these key points, a more informed decision regarding the effectiveness of collective bargaining can be made.