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Strikes that come with collective bargaining play a bigger role in the rate of inflation thereby disrupting economies. Some scholars argue that strikes and inflation cancel out since better terms of service for workers do translate into huge output and there is eventually a surplus in the market leading to lowering of prices of commodities. Wage increments are a common cause for strikes and this means that to employers, there is inflation on labor costs and this might make them increase the price of the commodities they produce so as to cater for the costs of labor resource used in producing these goods. On another scale, inflation and strikes do disrupt economies by affecting the known economies of production. The strikes where workers are demanding for a pay increase would result into increment in income and the workers may be able to save. The increment that results from these strikes could lead to improvement of welfare or the standards of living. The strikes do affect production in the short run thereby reducing sales, and the firms’ profits (Colosi, Berkeley, & American Arbitration Association, 2006).
It has been established that those full-time salary and wage employees who happen to be members of certain unions exhibit a tendency to earn more than the non-union once. A survey done in 2002 indicated that the union workers had average weekly earnings of approximately USD740 as compared to an average of USD587 for those who were not members of unions. The highest paid union workers in blue-collar jobs and who were members of a union earned an approximately USD23.05 as compared to the non-union who earned USD16.33. The wages of union workers are determined by collective bargaining done by their unions or organizations.
There are cases when the principle of collective bargaining may be revoked by a government. Such refusal could only be permitted if there are errors relating to pure form or if there are flaws in the procedure followed or in case where such a collective bargain agreement did not conform to the set minimum standards that have been outlined by the general legislation on labor. If there are these cases mentioned above, a government or an employer is allowed to revoke a collective bargain agreement. However, the provisions of the legislature are not usually compatible or in conformance with the Convention No. 98 where they end up permitting the denial of an organization to approve or register a collective agreement on claims that such an agreement could be incompatible with these general or economic government’s policies or any official directive issued regarding to wages and the required working conditions.
If a situation arises where prior approval of collective bargain agreements is demanded by the authorities concerned, this is said to be in violation of party autonomy as is outlined in the doctrine of party autonomy to reach a negotiated agreement. According to the opinion presented by the Committee on Freedom of Association, the legal provisions that would render collective bargaining agreements to be subject to the ministry of labor’s approval with the claim of such demands being based on economic policy thereby preventing the parties to freely fix wades, will not be conforming to Article 4 of Convention No. 98. This Article provides for the respecting of the promotion and the full development of mechanisms which would allow free and voluntary collective negotiations (Patil, 1993).
We have a provision that sets up grounds for the rejection of approval of the existence of a collective agreement, and the clause interfering with the right that is reserved for the State to coordinate and be given an overall full control of a nation’s economic life is said to involve the high risk of committing a serious restriction of such a voluntary negotiation when it comes to collective agreements. However, given the need for some general interests, the governments do establish machineries in which case parties involved do take into account some considerations that relate to economic and social policies of these groups and the inherent protection of given general interests (Colosi, Berkeley, & American Arbitration Association, 2006).
Removal of labor unions does not add value to our economy nor welfare. This is because the raising of wages and fringe benefits do improve the welfare of people. The unions fight for the reduction in inequality within the firm that is represented through the differentials exhibited between the high-paid and the low-paid workers and other groups of interest. The unions help while doing collective bargaining in the reduction of the income inequality as seen in the broader society where this inequality is done away with within firms, and across the entire business or industry. If labor unions are eliminated, we get a scenario whereby the employers do increase the compensation rate in order to discourage the need for unionization. Denial of collective bargaining is therefore a backward move towards the development of both the nation and economy (Patil, 1993).
Collective bargaining is the best way to go for employees to address their grievances. When the employees become members of labor union, exploitation by employers is drastically reduced. Strikes are normally resorted to as the last option after the negotiation agreement fails. Given that unionized employers suffer fewer turnovers, they get greater incentives that are meant for employee training meant to impart skills and high commitment of the human resources, as is opposed to low-skills and high turnover experienced in absences of labor unions. Studies have shown that employees who are unionized are more productive than those who are nonunionized and this is attributed to less turnover hence gaining high experience at the same workplace as opposed to the nonunionized who have a higher turnover thus would hope from job to job. Finally, absence of labor union has no economic benefit to a country, although this is still debatable (Colosi, Berkeley, & American Arbitration Association, 2006).