8 Primary Advantages and Disadvantages of Collective Bargaining

Collective bargaining, in some shape or form, has always existed since the rise of trade during the 18th century. Although the earliest labor unions were thought of as criminal organizations, they were decriminalized throughout the 19th century. Beatrice Webb, a prominent socialist, coined the term “collective bargaining” in 1891 to refer to the collective negotiations and agreements.

The Industrial Revolution is responsible for changing the landscape of manufacturing what with the rise of mass production factories that contributed to very long working hours, low wages and dangerous work conditions. To combat this, labor unions were formed. They took over from traditional guilds that were put in place to protect employees working in different trade industries. The main purpose of these unions was to take on larger companies with multiple trades operating under one roof.

Collective bargaining is a process where negotiations between employers and a group of employees take place to reach an agreement to regulate working conditions. A trade union, where employees belong, represents the interests of their members.

A collective agreement resulting from the meeting of these parties is usually set out in wage scales, working hours, training, health and safety, overtime, grievance mechanisms and the rights to participate in workplace or company affairs.

The union representing employees may hold negotiations with just a single employer (who represents the company’s shareholders) or with a group of businesses, depending on the country, in order to come to an industry wide agreement.

Essentially, a collective agreement will serve as a labor contract between an employer and one or more unions. Collective bargaining agreement (CBA) or collective employment agreement (CEA) is the terms often used to refer to the result of negotiations.

Taking that all in, you’d think that collective bargaining is a good thing given that it listens to the voice of workers. However, there are parties who are opposed to such schemes. So to better understand why there’s a divide when I comes to this topic, here’s a look at the advantages and disadvantages of such a negotiation:

List of Advantages of Collective Bargaining

1. It offers workers a voice.
Unions can have members across various places. For instance, a teachers union in the US state of Washington can have educators from various schools as members. Since they are well represented across different places, they have a statewide voice on education, as well as issues with faculty. With their large number, they have the staff needed to organize lobbying or political efforts.

2. It helps increase wages and productivity.
Happy employees are more than willing to perform 100% if they know they are paid right and treated right. This in turn makes employers happy, particularly if that level of enthusiasm regarding work results in large profits.

It is understandable that businesses want to be profitable, and often times they demand things of their employees. But it’s when they don’t compensate those demands – meaning, everything stays the same – that workers can stand up and say that things aren’t right.

For one, employees have families to return to, mouths to feed and bills to pay. It’s unfair for them to be working for ridiculously long hours when there’s no one to watch over their children, and especially mortifying for them to know they are still receiving extremely low wages for having worked so hard.

This is where unions can come in and soothe issues between employers and employees. Maybe through this conversation, employers can understand the plight of their workers and agree to terms that benefit both parties.

3. It is a transparent process.
Yes, negotiations happen behind closed doors but the results are very transparent. Whatever was discussed is put into writing which can serve as reference materials regarding what transpired between both sides. This mutual level of accountability may not be available in other workplaces.

List of Disadvantages of Collective Bargaining

1. The position taken by a union may not line up with the viewpoints of its members.
Not everyone will agree on certain topics, and that’s where unions have a slight difficulty. It’s hard to campaign for what a collective wants when that group itself is not 100% in agreement with the idea.

Also, some members might not agree all the time with the final agreement. Yes they backed up the issue as one that needed to be brought to light, but sometimes the results may fall short on their expectations.

Collective bargaining is the meeting between two parties and compromises need to be made in order for an agreement to be reached. This may or may not sit well with all members.

2. It only benefits workers who belong to a union.
The sad part about collective bargaining is that those who are members of a union tend to have better benefits. That’s not just a random fact being thrown out there as empirical findings have found this to be the case. Represented workers, on average, get a wage markup over their non-unionized counterparts, and the markup is around five to 10% in industrial countries.

3. It can be a financial burden.
There are dues payments required when becoming a member of a union. However, there are occasions when some members don’t pay their dues. As a result, the paying members often end up paying for those dues.

4. It can affect relationships between members.
As mentioned earlier, not everyone will agree on certain issues. In fact, divisions and differences that were not previously there can surface because of unionization. This in turn may fraction relationships of those in the union.

5. It allows employees to hold strikes.
When there’s a strike, there are no workers. With no workers, how can an office be productive? In some cases, employees don’t fear striking out when their demands aren’t met. We have seen many situations like these, one being the NBA lockout.

Yes, strikes don’t happen 100% of the time, but there is that looming threat whenever a new CBA needs to be negotiated. So those who are against CBAs feel that removing this activity will lessen the chance of productivity being affected.

About the Author
Brandon Miller has a B.A. from the University of Texas at Austin. He is a seasoned writer who has written over one hundred articles, which have been read by over 500,000 people. If you have any comments or concerns about this blog post, then please contact the Green Garage team here.