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CostCo or How Unions Help Non-Union Workers

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While Wal-Mart is often considered the embodiment of the global race to the bottom in work conditions, its big box competitor, Costco, competes with average wages of $16 per hour and the company foots 92% of employee's health insurance costs.

This is not an accident but the result of union effots.

But here's the interesting fact.  Only 18% of Costco's workforce is unionized, but as this Labor Research Association article details, this has a ripple effect throughout the company.  If the company didn't extend similar benefits to the non-union Costco employees, the whole company would be unionized rapidly.

And in a similar way, while only 10% of the private workforce is unionized in the United States, this has profound effects in keeping wages higher for most non-union workers as well.   

While union organizing is not as successful in membership growth as it could be, the money spent on organizing is still a great benefit to non-union workers.  Just the threat of a union knocking on the door means that many employers run their shops more decently to avoid unionization and, in industries or regions where unions are particularly strong, non-union companies often match the union wages.  

As this older article about anti-union consultants emphasizes, while union busters use a range of illegal tactics to stop the unions, those same consultants also advise improving work conditions as a key strategy to keep unions out:

[Union avoidance consultant Demaria] tells his audience that the one surefire way to keep unions out is to run a decent shop. DeMaria says he has talked to union organizers, and "a common refrain I get is, 'We don't organize employees, management does.'" DeMaria recommends offering competitive wages (but not the highest wages around, he stresses, because you want discontented workers to leave) and seniority and peer grievance review provisions.
And the Economic Policy Institute has quantified the gains of non-union workers from the threat of union organizing in this report.  In industries where at least 25% of workers are unionized, non-union workers with high school degrees see a 5% increase in wages compared to their counterparts in less unionized industries. 

In fact, since many more workers are in non-union companies than unionized companies, the total wage increases due to this union activity is as high for all non-union workers as for all unionized workers.

People focus a bit too much on the total union membership numbers, since that vastly underestimates the number of workers who benefit from the threat companies face from union organizing drives. 

If unionizing just 18% of the workforce at Costco can help create a model of workplace standards -- one that shows that the Wal-Mart model is not the only route to being a productive retailer -- the rest of the workforce needs to recognize how much they owe the 10% of the workforce footing the bill with their dues to keep not only their own wages up, but helping keep wage standards up across the economy.


11 Comments

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So do the gratful non-union workers who benefit from the organizing drive then tend to vote more for pro-labor political candidates?  Or do they not only free ride but cook the golden goose by voting for pols who'd make it harder for unions to get a foothold?

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This is a smart blog. I mean it. You have so much knowledge about this issue, and so much passion. You also know how to make people rally behind it, obviously from the responses. Youve got a design here thats not too flashy, but makes a statement as big as what youre saying. Great job, indeed.children health

Very nice post!

 

I am already sending the link to some friends of mine.  I think the focus of this article is how a medium-large sized company can pay decent wages and still be successful.  This formula is the formula we should prize ourselves on.

 

Hopefully, the Costco business plan is successful in the longterm.

-Zen Blade 

My wife is going out right now to make major Costco purchases.  Take that Walmart.

I don't the few union employees at Costco are why they pay well and offer good benefits.  They always have, long before they bought the unionized Price-Club. 
Basically they are run by people who wnat to do right by their employees

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But then, Toyota is a multi-national corporation which hopes to do business in many areas in the future and cannot afford to take public swipes at the workforces/consumers of entire American states.
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