What is Collective Bargaining?

Published by Thomas Herold in Economics, Laws & Regulations

'Collective Bargaining' is explained in detail and with examples in the Economics edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

Collective bargaining  is the labor engagement of re-negotiating the employment terms in between a group of workers and an employer. Such terms of employment will often cover various elements including (but not limited to) working conditions, conditions of employment, various rules pertaining to the work place, overtime pay, base pay, working hours’ times and numbers of hours, work holidays, shift length, sick leave, vacation time, health care benefits, and retirement contributions and benefits.

Within the jurisdiction of the United States, such collective bargaining  happens when the leaders of a labor union or several labor unions working in concert get together with the firm’s in question’s management team which employs the workers of the given labor union. A final result from this type of bargaining is termed a collective bargaining  agreement.

It sets up the regulations in the employment of the group for several years at least. The members of the union are the ones who pay out for the expenses of being represented with the union dues which they contribute to the organization and its endeavors. The process of bargaining collectively can revolve around nasty strikes and even employee lockouts when the two sides can not come to a mutually agreeable conclusion and deal.

The United States has two types of labor unions. One exists primarily within the private sector for jobs ranging from factory workers to miners. The other pertains to only public sector employees, such as Federal employees and teachers. Per the 2015 report from the Bureau of Labor Statistics, or BLS, 11.1 percent of all American workers were represented by membership in labor unions.

In the public sector, being unionized is far more common. In fact, 35.2 percent of all public workers are union members, compared to a mere 6.7 percent of private sector employees. There are so many different types of employees who choose to participate in unions. These include airline employees, grocery store workers, teachers at public and private schools, professional athletes, postal workers, auto workers, farm workers, actors, steel workers, and others.

Those wages of workers who are members at unions are significantly higher than for those who are independents and not a part of unions. This is still the case even though the power and influence of unions has waned dramatically within the United States as the base of manufacturing jobs has drastically declined over the past four to five decades. Median wages amount to $980 per week for unionized employees versus $776 weekly for those who are not union members.

It is also worth noting in the scheme of the collective bargaining universe that the unionization rates are vastly different from one state to the next. As an example, in the year 2015, almost 25 percent of aggregate workers within New York State were union members. In South Carolina conversely, not quite two percent of all employees belonged to unions. Some states cling to their “right to work” motto and heavily discourage unionization within their states, as with Florida among others in the South.

In the twenty-first century especially, the subject of collective bargaining  has caused huge and far ranging controversies, especially in the instances where public sector employees were involved. Tax revenues are what pay for the wages of all public sector workers. This means that opponents to bargaining feel that higher and higher wages which the unions secure for them create an unfair and heavy burden on the American tax base.

Supporters of the practice argue that runaway pay worries are not grounded in reality. They hold up statistics which claim that these public workers who are a part of unions actually earn no more than five percent more than their public employee peers who do not participate in unions.

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The term 'Collective Bargaining' is included in the Economics edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.