Labor Relations & Collective Bargaining in a Global Economy ASSIGNEMENT-01 FedEx
SUBMITTED BY –NAZMUL SAJON -ID-0520056
SUBMITTED TODR.SHOIB AHMED (SCHOOL OF BUSINESS, INDEPENDENT UNIVERSITY, BANGLADESH)
FEDEX -The World On Time
ANS- No as a new employee, I do not sign a card to certify a union at FedEx, moreover, FedEx’s delivery services are generally cheaper than those offered by UPS with unionization. Besides that, I want to focus on shareholders perspectives than unionized perspective as I newly joined FedEx.
Factors, why I do not sign a card to certify a union at FedEx.
It is common knowledge that unions negotiate higher wages for employees, more lucrative benefit packages, and limit working hours.
The average union member earns more than the average non-union worker, however that does not mean that union membership will raise wages: Few workers who join a union today get a pay raise. The economy has become more competitive over the past generation. Companies have less power to pass price increases on to consumers without going out of business.
It is also fact that FedEx is the last remaining major express shipper that is not unionized.
Employees love this, but from a business perspective this is called an increase in the cost of doing business. Increased costs result in one of two outcomes: Higher prices or a reduction in the quality or quantity of service.
Other unionized company like UPS, have to compete with nonunionized FedEx, so forcing FedEx to form a union would be creating a union monopoly.
Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers’ wages. 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.
Consumers may have to pay a “hidden package tax” to fund this bailout. Estimates vary, but a mere 10 percent increase in costs would result in an extra $9 billion cost for consumers.
Reduced reliability, longer shipping times and more limited access to rural markets around the globe.
This law is viewed as a bailout for the Teamsters union. Membership is sliding, dues are down, and they need money to accomplish the union’s goals. Unionizing FedEx by force (i.e. Congressional law) would provide much needed membership and cash to the Teamsters.
If FedEx is unionized under national labor relations law. Company will face serious economical issue or may go bankrupt.
Questions to be asked.
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What happens if This Law Passes?
Consumers may have to pay a “hidden package tax” to fund this bailout. Estimates vary, but a mere 10 percent increase in costs would result in an extra $9 billion cost for consumers. Not to mention reduced reliability, longer shipping times and more limited access to rural markets around the globe. FedEx’s profit margins will remain the same because it is a publicly traded forprofit business. As demonstrated above, unions raise a company’s cost of doing business. Is it unreasonable to assume that a cost increase (the hidden package tax) will fall on its customers’ shoulders?
What similar unionized organizations want?
FedEx claimed that UPS was trying to receive a government bailout designed to “limit competition for overnight deliveries.” The disagreement was over a provision in a Federal Aviation Administration reauthorization bill, which would reclassify FedEx’s non-airline employees under the National Labor Relations Act instead of the Railway Labor Act (RLA), making it easier for them to form local unions. UPS’s ground workers are already covered by the NLRA, and so its employees are often members of the International Brotherhood of Teamsters. While UPS claims that FedEx’s ground employees should be covered by NLRA so employees performing the same function at different companies have the same rights, FedEx argued that UPS was trying to force them to expose customers to local work stoppages that could prevent the delivery of time-sensitive shipments to lower competition.
Why Union is bad for newly joined employees?
Unions do not have the resources to monitor each worker’s performance and tailor the contract accordingly. Even if they could, they would not want to do so. Unions want employees to view the union–not their individual achievements–as the source of their economic gains. As a result, union contracts typically base pay and promotions on seniority or detailed union job classifications. Unions rarely allow employers to base pay on individual performance or promote workers on the basis of individual ability. Consequently, unions do not negotiate higher wages for many newly organized workers. As I joined the FedEx recently, it is wise to not sign for unionization at FedEx.
What Economists view on unionizations?
Economists consistently find that unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members–nonunion manufacturing employment has risen. Research also shows that widespread unionization delays recovery from economic downturns. Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else. Economic theory consequently suggests that unions raise the wages of their members at the cost of lower profits and fewer jobs, that lower profits cause businesses to invest less, and that unions have a smaller effect in competitive markets (where a union cannot obtain a monopoly). Studies typically find that unionized companies earn profits between 10 percent and 15 percent lower than those of comparable non-union firms.” Unions effectively tax these investments by negotiating higher wages for their members, thus lowering profits. Unionized company’s respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.
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