i The Ethics of Unionization and Collective Bargaining ... · Unionism and collective bargaining have been responsible for changing the relationship between workers and their employers

i

The Ethics of Unionization and Collective Bargaining

Ruth M. Tappin © 2013

Running head: The ETHICS OF UNIONISM… ii

Abstract

Unionism and collective bargaining have been responsible for changing the relationship between

workers and their employers and, indeed, between citizens and their governments. In developed

countries, though it has been credited with lifting up the working class and creating a middle

class, unionism is in decline and income and wealth among the working classes have also been

declining - while CEO compensation has risen to historic highs. This disparity in income and

wealth has coincided with the decline in unionism and collective bargaining. While the situation

of workers in developed countries during and after the Industrial Revolution (IR) improved

through unionism, collective bargaining, and legislation that govern labor, most of the

conditions that prompted union activity in developed countries during that period now exist in

undeveloped countries, which are sources of cheap labor for multinational and transnational

corporations (MNCs, TNCs). Egregious reports of many basic human rights violations and

exploitative workplace practices in these countries emerge quite frequently, while efforts to

unionize labor in these countries have been opposed by their governments and the corporations

that operate there. This discussion of the role of unionism and collective bargaining in developed

and undeveloped countries touches on union influence on management power, workers’ rights

and dignity, and on society as a whole; furthermore, it views the ethical or unethical behavior of

unionism and collective bargaining as viewed through the lenses of Kantian, Libertarian,

Rawlsian, and Utilitarian theories.

Running head: The ETHICS OF UNIONISM… iii

List of Tables

Table 1 .......................................................................................................................................... 12

Table of Contents

Abstract .......................................................................................................................................... ii

List of Tables ................................................................................................................................ iii

Introduction ................................................................................................................................... 1

Background ................................................................................................................................... 2

Union Contribution to Society, Human Rights, and Democracy ............................................. 4

Unionism and the United Nations’ Universal Declaration of Human Rights ......................... 5

Obstacles to Unionism and Collective Bargaining ..................................................................... 6

Globalization, Employee Rights and Unionism in Undeveloped Nations ................................ 8

Labor and Human Rights Violations in Undeveloped Countries ........................................... 11

Table 1 .......................................................................................................................................... 12

Discussion of Ethical or Unethical Aspects of Unionism and Collective Bargaining ........... 14

Part 2 ............................................................................................................................................ 15

A Kantian perspective ............................................................................................................................................. 15

Running head: The ETHICS OF UNIONISM… iv

A Utilitarian Perspective: ....................................................................................................................................... 17

A Rawlsian Perspective ........................................................................................................................................... 22

A Libertarian Perspective ....................................................................................................................................... 25

Conclusion ................................................................................................................................... 27

References .................................................................................................................................... 30

1

Introduction

Unions exist to protect the economic rights and interests of workers (Akers, 2007),

empower workers, prevent management from taking unfair advantage of workers and, according

to Scheuer (1997), “…to intervene in management’s prerogatives” (p. 66). They initially

accomplished this through often bloody and deadly strikes, the threat of strikes and, today,

primarily through collective bargaining. Prasad (2009) defines collective bargaining as a “give

and take” process by which workers and management jointly determine the terms and conditions

of employment (p. 196). A major goal of unionism and collective bargaining in America, for

example, has been to look after the interest of workers by creating equity in the workplace, and

giving workers a voice in shaping policies that affect them (e.g. Scheuer, 1997). According to

Jacques et al (2003), “…in a market-based economy, profit is the motive underlying corporate

decision making” (p. 516); therefore, the goal of business is to maximize profits by operating at

the lowest costs possible. Since labor imposes a significant cost on business operations, one

obviously effective way to boost profits is to reduce this particular cost. Today, many

corporations do this through outsourcing their labor to undeveloped countries where child labor

is often used for little or no pay, and where employees are paid as little as pennies per hour, and

forced to work under unsafe, repressive and abusive conditions (see e.g. Barnes & Kozer, 2008).

One viable worker response to this situation is for the worker to form and join unions and to be

able to bargain collectively with employers in order to improve their situation.

Unionism has been praised by human rights activists and organizations, and by many

religious bodies, as an equalizing force against oppressive capital power and authoritarian

management (e.g. Scheuer, 1997), and decried by capitalists as destructive, economically

inefficient, disruptive and therefore contrary to libertarian free market principles which postulate

Running head: The ETHICS OF UNIONISM… 2

that the sole capitalist goal of business is to maximize profit (e.g. Friedman, 1970). This,

therefore, begs the question: is unionism and collective bargaining ethical? In order to answer

this question, one has to understand what unionism and collective bargaining represent and how

both affect the stakeholders involved.

In what follows I touch briefly on: the background of unionism and discuss the role of

globalization; unionism and collective bargaining in developed and undeveloped countries, and

the obstacles unions face in organizing; union influence on management power, workers’ rights

and dignity, and on society as a whole, and the ethical or unethical behavior of unionism and

collective bargaining as viewed through the perspectives of Kantian, Libertarian (as per Milton

Friedman), Rawlsian, and Utilitarian ethical theories. For the purpose of this paper the terms

capital, corporate interest, management, multinational corporation (MNC), organizations or

transnational corporations(TNC) will be used alternately and will convey the same intent and

meaning as “business”.

Background

Unionism began to take form primarily in the 18th

and 19th

Century and was, in large part,

in response to management authoritarianism during the industrial revolution of that period (D’art

& Turner, 2003), which changed the way people lived and worked as more people moved from

rural communities to the cities in search of jobs. Child labor was common and rampant; laborers

were expected to work a 72-hour, six-day work week from sunup to sundown for below

subsistence wages, and often under unsanitary and unsafe working conditions, with no worker

protection, no benefits or retirement pensions, and no recourse to fair compensation when injured

or killed on the job (e.g. Fick, 2005; Bennett & Taylor, 2001; Pope et al, 2001) - the situation of

the worker was akin to industrial and economic slavery.


After the American Civil War, union efforts - primarily through the National

Labor Union - to secure a national 8-hour workday attracted many members and by the

1930s, after many bloody strikes in which labor organizers and workers were often

beaten, injured or killed, laborers in the major unions were able to gain a 40-hour work

week through collective bargaining. After this gain, the work week of union workers was

approximately 10 – 20 hours shorter than non-union workers (Bennett & Taylor, 2001).

Soon thereafter in 1935, under President Franklin Roosevelt and with union support, the

Fair Labor Standards Act (FLSA) - also known as the Wagner Act – was enacted. It

guaranteed employees’ rights to freely join unions and to bargain collectively without

interference from employers and legislated a variety of labor protection laws that

included a national, standard 40-hour work week with overtime to be paid at the rate of

150 percent of the normal wage (Bennett & Taylor, 2001). This Act established the

National Labor Relations Board (NLRB), which was responsible for its enforcement. Its

constitutionality was immediately challenged by opponents but it was upheld by the

Supreme Court; however, challenges continued on various grounds such as, for example,

questioning the interpretation of the Act and the jurisdiction of the Board (e.g. Zingler,

1941). By 1938 the court responses to these challenges created enough ambiguity so that

within five years of the NLRA’s enactment “…the National Labor Relations Board and

courts had created a doctrine that allowed employers to impose the terms they proposed

in bargaining when the parties reached an impasse” (Dannin et al, 2008 in Dannin, 1987,

1997); other union and collective bargaining-weakening rulings followed. Over the years,

the NLRB has been criticized for weakening the NLRA and for allowing business to


advance their attacks of employee rights (Getman, 2005). Today, in Britain, Japan and

the USA, union membership is at the lowest it has ever been (Pencavel, 2005).

Union Contribution to Society, Human Rights, and Democracy

In the US, as in most other developed nations, unionism contributed to the end of child

labor and the establishment of public schools; informed or influenced a host of labor laws that,

for example, mandates minimum wages, national safety and sanitation standards in the

workplace, fairness in hiring and firing practices, and protections against discrimination toward

women, minorities and the handicapped (e.g. Bennett, 1997; Fick, 2009). Collective bargaining,

the core and power of unionism, gave workers a voice in the workplace, produced higher wage

concessions for union and nonunion members, raised the standard of living (see e.g. Scheuer,

1997; Klein, 2008), produced a middleclass and contributed to the success of the Civil Rights

movement in America. Coleman (1998) charged that consistent union efforts for civil rights far

exceeded the efforts of the Democratic Party (p. 697).

Union efforts and gains on behalf of workers have reverberated throughout society and

produced benefits for all members of society - including non-union employees (Coleman, 1998) -

narrowing the power distance between labor and management, and helping to curtail inequality

and “the power of capital” (Scheuer, 1997, p. 129). Yet, even beyond these economic gains,

unions have had an even more profound effect on citizens and societies because their influence

has not been limited to the workplace; as a model of the democratic process, trade unions have

made key contributions “… to creating, maintaining, and rebuilding democratic societies” (Fick,

2009, p. 249). For example, unionism helped to free Poland from communism and a free Poland

was the crack that shattered the former Soviet communist empire (e.g. Kamen, 2005) as it

ushered in collective bargaining and democracy.


Unionism and the United Nations’ Universal Declaration of Human Rights

According to its website, The United Nations (2011) is an international organization that

was founded in 1945 after the Second World War by 51 countries that pledged to maintain

international peace and security, develop friendly relations among nations and promote social

progress, better living standards and human rights (para. 1). On December 10, 1948 it adopted a

Universal Declaration of Human Rights and described and stated these rights in 30 Articles.

Among what the UN calls a “broad range of issues”, the organization works to promote

democracy, human rights, gender equality and the advancement of women, governance,

economic and social development and international health (para. 3). Some of these articles have

indirect and direct bearing on workers’ rights and dignity, and on unions. For example, it states

that:

All human beings are born free and equal in dignity and rights. They are endowed

with reason and conscience and should act towards one another in a spirit of

brotherhood (Art.1);

Everyone has the right to life, liberty and security of person (art 3); no one shall be

held in slavery or servitude (Art.4);

No one shall be subjected to torture or to cruel, inhuman or degrading treatment or

punishment (Art. 5);

No one shall be subjected to arbitrary… detention; Everyone has the right to freedom

of movement (Art. 13);

Everyone has the right to freedom of opinion and expression; this right includes

freedom to hold opinions without interference and to seek, receive and impart

information and ideas through any media and regardless of frontiers (art. 19);

Everyone has the right to freedom of peaceful assembly and association; no one may

be compelled to belong to an association (Art. 20).

Of the 30 Articles that define what the UN promotes and upholds, Article 23 specifically

recognizes workers rights to work and to join unions as human rights:

(1) Everyone has the right to work, to free choice of employment, to just and favourable

conditions of work and to protection against unemployment.

(2) Everyone, without any discrimination, has the right to equal pay for equal work.


(3) Everyone who works has the right to just and favourable remuneration ensuring for

himself and his family an existence worthy of human dignity, and supplemented, if

necessary, by other means of social protection.

(4) Everyone has the right to form and to join trade unions for the protection of his

interests (Article 23).

Business has often insisted that unions create inequality but a European study that

examined the influence of unionism on inequality suggested that strengthening trade unions

could actually be one way to reduce inequality (Watt & O’Farrell, 2009). In Germany where

union participation is required in a workplace of five or more employees, an investigation into

the codetermining relationship between employees and management unequivocally confirmed

the benefits of the system to everyone involved (Adams, 2005). In light of this it is easy to infer,

then, that as unionism and collective bargaining continue to decline, so will the voice and power

of the worker in the workplace, and so might the gains that workers and society as a whole have

achieved. One has only to look at the effects of globalization and outsourcing to underdeveloped

countries to understand what a workforce and a society without free or effective unions and

collective bargaining might look like.

Obstacles to Unionism and Collective Bargaining

Fick (2003) points out that authoritarian regimes have historically recognized the

“…inchoate power of independent trade unions to contest their authority” (p. 250) and so have

always taken steps to stamp them out or exercise control over them. For instance, one of the first

things that the Nazi government did was to dissolve Germany’s free trade unions and similar

tactics were used in Franco’s Spain and throughout Communist Russia and its satellite states

(Fick, 2003). Businesses have historically exercised authoritarian control over workers and they,

too, continue to employ arbitrary tactics to suppress unions because, as Dannin et al. (2008) point

out, “… the success of collective bargaining affects unionization and is the vehicle for effecting


worker rights (p. 220); therefore, disable the vehicle, and workers rights will be curtailed. In

efforts to limit workers’ rights, obstacles to labor organizing have come from businesses that use

political influence, intimidation, pressure tactics, or even positive incentives that reduce

employee inclination for union representation (Morand, 1994).

An example of positive incentives that companies use in order to restrict union activities

in their organization is the wage and benefits that nonunion companies pay. In order to keep

employees from organizing, nonunion employers have often followed unions in offering job

benefits, safe working conditions and high enough wages to keep employees satisfied. As

Pencavel (2005) pointed out, nonunion employers who believe that their employees might join

unions might pay their workers higher wages in an attempt to incentivise workers not to form or

join unions; in doing so, significant levels of employee dissatisfaction is averted and the

disincentive to unionize is created. In undeveloped countries, violence and intimidation is

routinely used against workers as disincentives to join unions.

In America, court rulings favoring changes that enabled employer ability to frustrate

union organizing, political influence on the NLRA, and poor NLRB enforcement of employee

rights to join unions (see e.g. Pope et al, 2001; Devinatz, 2004; Adams, 2005) have also been

factors limiting labor organizing. In fact, it has been opined that the NLRA is now “…an

organizing trap, and that it sets the stage for employers to use collective bargaining as an

instrument for destroying unions” (Getman, 2005).

Today, in America, unionism remains under fierce and steady attack by politicians who

have been traditionally aligned with big business. For example, President Bush was recognized

by labor as anti-union and considered anti-worker in his policies (Fletcher, 2005). As it stands

today, the collective bargaining process is being vigorously threatened with extinction as newly


elected Republican governors in Madison, WI and across the United States (US) launched

concerted efforts to end public sector collective bargaining processes (Massachusetts AFL-CIO,

2011); they cite budgetary concerns, freedom of choice, inefficiencies and costs among the

reasons to do so. Since a major goal of unions is to secure higher wages for their members

through the collective bargaining process, wages and other bargained for benefits naturally push

operating costs higher than they would normally be without unionism (Pencavel, 2005, p.74).

Unionism has also been on the decline in most developed countries and other reasons attributed

to this decline have been the decentralization of collective bargaining, the growth of

privatization, the use of contingent contracts (Pencavel, 2005), and globalization.

Globalization, Employee Rights and Unionism in Undeveloped Nations

Globalization has been generally described as increased free trade among nations,

increased international division of labor, freer movement of labor, increased global capital

flows, increased international technological advances and exchanges, and increased

opportunities to share knowledge (Weede, 2009; Day, 2005). It is, according to Weede (2009),

another word for the worldwide expansion of capitalism - a system that Weede defines as

essentially “… an economic system where limited government, economic freedom and private

enterprise prevail” (p. 423, para.3), and one that Fletcher (2005) says has come to be seen as

“…the reorganization of capitalism…” (p. 263).

The United States (US) has free trade agreements (FTAs) with countries from the

Caribbean to China. These FTAs removed trade barriers and facilitated the relocation of

factories, transference of jobs from industrialized nations to undeveloped or emerging nations

such as Bangladesh, China, Indonesia, Mexico, Nicaragua, the Philippines, Saipan and various

African countries as MNCs such as Chevron, Dole Pineapple, the Gap, General Electric, Nike


and numerous others sought to maximize profits by reducing production costs through the cheap,

abundant labor readily available in these places (Multinational Monitor, 2011). Globalization has

increased competitive pressures on businesses and this has made outsourcing to cheap labor

markets more cost efficient to companies. Reductions or removal of trade barriers, cheap labor

and tax free incentives by third world or emerging nations have facilitated the movement of high

cost manufacturing from domestic production in developed nations to undeveloped nations

where unions either do not exist, or where union activities and workers’ rights are not supported,

protected, or enforced by the governments in these countries (Arnold, 2003). Global competition

has thus created a downward pressure on wages as companies fight for competitive edge by

managing the cost of labor through low wages (see e.g. Pencavel, 2005). According to Global

Issues (2011), successful development can suggest such things as:

An improvement in living standards and access to all basic needs such that a person has

enough food, water, shelter, clothing, health, education, etc;

A stable political, social and economic environment, with associated political, social and

economic freedoms, such as (though not limited to) equitable ownership of land and

property;

The ability to make free and informed choices that are not coerced;

Be able to participate in a democratic environment with the ability to have a say in one’s

own future;

To have the full potential for what the United Nations calls Human Development

(Introduction, para. 2)

Globalism implies successful economic development in underdeveloped countries

through increased employment and opportunities for the poor. However, given the tax


advantages and incentives proffered to corporations to relocate to undeveloped nations (Institute

for Global Labour & Human Rights, 2011), the kinds of benefits globalism is supposed to have

produced for undeveloped and emerging nations have not really materialized. Despite producing

millions of manufacturing and servicing jobs in these countries, contrary to expectations, the

economic condition in these nations have not improved much. For example, Global Issues (2011)

quotes the World Bank’s reports of the following startling facts:

Almost half the world’s population (3 billion people) live on less than $2.50 a day

The poorest 40 percent of the world’s population accounts for 5 percent of global

income; the richest 20 percent accounts for three-quarters of world income

22,000 children die from poverty each day

Some 1.1 billion people in developing countries have inadequate access to water, and

2.6 billion lack basic sanitation

Almost two in three people lacking access to clean water survive on less than $2 a

day, with one in three living on less than $1 a day

More than 660 million people without sanitation live on less than $2 a day, and more

than 385 million on less than $1 a day

In fact, since the 1970s the disparity in wealth between the rich and the poor has

increased exponentially and an income chasm has been created between CEOs and their

employees (Wiseman, 2007). For example, the US Census Bureau commented that “…the wage

distribution has become considerably more unequal with workers at the top experiencing real

wage gains and those at the bottom real wage losses” (Wiseman & Severance, 2007, p. 3, para.

2). This disparity in wealth and income has coincided with the decline of unionism in many

developed countries (Dannin, 209) and this wealth has been attained primarily on the backs of


oppressed workers in undeveloped countries. Sadly, the working conditions that workers in

undeveloped countries are subjected to today seem to eerily mirror industrial era conditions that

existed more than a hundred years ago in now developed countries.

Labor and Human Rights Violations in Undeveloped Countries

Reports of the proliferation of sweat shops, child labor, and worker exploitation in

countries such as China, Mexico, Nicaragua, Bangladesh, the Philippines and other undeveloped

nations that do not have free or effective labor unions are frequent, and organizations such as the

Institute for Global Labour and Human Rights continue to expose disturbing abuses of workers

by MNCs or their suppliers. For example, workers are frequently locked in their work areas and

prevented from taking breaks, and are routinely forced to work overtime with no extra pay;

additionally, it is common for workers to be docked a whole day’s wage for being a few minutes

late and recently, in 2010, over 20 workers died and more than 100 were seriously injured in a

Bangladesh factory fire because exits were locked (Institute for Global Labour and Human

Rights, 2010). This was eerily reminiscent of the Triangle Shirt factory fire in New York over

100 years ago when over 100 young women were also locked in their work areas and so could

not escape the deadly fire. Unfortunately, these types of devastating factory fires have continued

into 2013.

In these undeveloped nations where many US companies have relocated their garment

factories in pursuit of cheap labor, women workers predominate and are easy targets for abuse

and discrimination (e.g. Short & Callahan, 2005; Young, 2004). As cited by Barnes & Kozar

(2008),

Many of the companies engaging in employee abuse or practicing discriminatory acts,

such as forced abortions, unpaid overtime, and unfair hiring practices are American

owned. Sara Lee Corporation, Nike, Adidas, Wal-Mart, The Gap, Liz Claiborne, DKNY,

and New Balance have all been cited for labor exploitation practices despite their anti-


sweatshop campaigns (Herrera, 2003; Howard, 2004; Anon., 2006; Worker Rights

Consortium, 2007).

Workers are paid wages that seem guaranteed to keep them impoverished, while

management justifies this practice as fair because they claim to be paying at the prevailing local

wage – never mind that these pay rates are below a living wage level, and do not cover basic

living expenses (Institute for Global Labour & Human Rights, 2011). As mentioned previously,

these countries tend to provide generous tax incentives to MCNs as they compete with each other

to attract the jobs that they provide. In Central America, as of May, 2011, despite incentives such

as100% income tax exemption, 100% import duty tax exemption and100% value added tax

exemption, workers were being paid an average low of $4.86/day (Nicaragua) to a high of

$14.76/day (Costa Rica) by Ocean Sky, a manufacturer supplier to Adidas-Reebok, Puma,

Columbia, Perry Ellis, and Gap (Table 1). This amounts to .60cents/hr. and $1.85/hr.

respectively.

Central America

Maquila Minimum Wages 2009 - 2011

as of May 1, 2011

Table 1

Country 2009 2010 2011

Costa Rica $411.00 $ 428.00 $ 443.00

Guatemala $210.31 $228.16 $ 254.18

Honduras $192.57 $ 206.17 $ 230.28

El Salvador $ 173.70 $ 173.70 $ 173.70

Nicaragua $122.68 $ 133.80 $ 146.22

Sources: Ministries of Labor of Costa Rica, Guatemala, Honduras, El Salvador and Nicaragua.

Chart made by the Institute's Central America Office, accessed from Institute on for Global

Labour & Human Rights 5/23/2011.

In addition to these low wages, workers were routinely forced to work overtime, in rooms

with locked windows and no ventilation, and had to purchase lunch on company premises even


though less expensive fare was being sold off factory grounds ((Institute for Global Labour &

Human Rights, 2011). Even when labor laws exist to protect workers, abuses continue because

the laws are most often not enforced (Frank, 2008). This might be due to corruption (e.g. Weede,

2008), the power influence of MNCs on local government, or the lack of developed

infrastructures to monitor labor conditions (Arnold, 2003). In fact, according to Short & Callahan

(2005) the United Nations Sub-commission on the Promotion and Protection of Human Rights

found that “… unionization and collective bargaining are nearly impossible, and …labor

safeguards are relaxed as part of the ‘race to the bottom’ [of these countries] to attract foreign

direct investment” (p. 123). However, abuses of employees are not confined to the labor force in

undeveloped countries; the virulently anti-union retail giant, Wal-Mart, for example, has gained

notoriety for its well-documented poor and abusive labor practices in the US.

Although it has been touted as an American success story, Wal-Mart has been notorious

for paying its workers so poorly that reportedly half of its workforce, including some fulltime

workers, qualified for food stamps and other state aid; additionally, just as in the sweatshops that

are located in undeveloped countries, employees have frequently been forced to work overtime,

“…off the clock, for hours” and workers have even been locked in stores, preventing them from

leaving before they cleaned the stores (Jacques et al, 2003, p. 518-19).

Extant studies have revealed what seems to be a direct relationship between union

density, loss of worker rights and wage disparity. For example, the decline of unionism and

collective bargaining has coincided with a decline in real wages, lower standard of living,

“…growing income inequality; corporate restructuring and downsizing; deindustrialization;

capital flight and globalization; and declining political influence” (Dannin et al, 2008, p. 95-6)

while corporate power, profits and CEO compensation have been increasing exponentially (e.g.


Dannin, 2009; Wiseman, 2005). After studying the effects of globalism in the lives of women

and children, Polakoff (2007) opined:

In other words, economic globalization has increasingly placed women and children –

who are specifically targeted by capitalist entrepreneurs of all kinds – at risk… The

forces of economic globalization have penetrated even the most isolated regions of the

world and integrated those regions into the global economy, creating vast regions of

poverty, misery, and social exclusion (p. 277).

As mentioned before, unionism and collective bargaining have been viewed as

necessary tools and an equalizing force against authoritarian capitalistic power; together,

they have given voice to the powerless, helped to uplift from poverty struggling masses

of workers, created a middleclass, and served as a model of democracy to authoritarian

regimes. Links have been made between unionism, justice and human rights. However,

since its initial gains in 1935 critics of unionism have waged war against it, claiming that

it is contrary to capitalist goals and that it creates upward pressures on wages that

otherwise would not exist in a free market system; a tension, therefore, exists between

business and unions and this begs the question: is unionism and collective bargaining

ethical?

Discussion of Ethical or Unethical Aspects of Unionism and Collective Bargaining

Given the convergence of forces that have resulted in decreased union density and the

troubling reversal of gains made by the middle class in America, how can unionism and

collective bargain be justified in the 21st Century when middle class workers seem to be so

divided on the issue? Perhaps the issue can be debated from different ethical perspectives such as

Kantian. Utilitarian, Rawlsian, and Libertarian ethics.


Part 2

A Kantian perspective

Emmanuel Kant expressed the belief that every human being had certain moral rights

simply by virtue of being human and by having the capacity to reason and, as such, all people

should be treated equally, as a free person, and in such a manner so that anyone else in that

situation would want to be treated in the same way (in White, 2003). This was what Kant termed

a categorical imperative (hereinafter “CI”) and the first formulation of the CI was stated thus:

“act only on that maxim through which you can concomitantly will that it should become

a universal law” (as cited by Kitcher, 2004, p. 555). Scarre (1998) explains that the CI is

generally understood to be a means of determining the “moral Dos and Don’ts by which

to live”. (P. 224)

This philosophy agrees with the simple Judeo-Christian biblical charge to do to others as you

would have others do to you and appears to be a moral basis for the advocacy of basic human

rights, since it emphasizes the dignity and worth of each human being (see also Arnold, 2003).

According to White (2003), Kant writes in The Metaphysics of Morals (434-435), that

… a human being regarded as a person.., is exalted above any price; for as a

person he is not to be valued merely as a means to the ends of others or even to

his own ends, but as an end in himself that is, he possesses a dignity (an absolute

inner worth) by which he exacts respect for himself from all other rational beings

in the world. (p. 2).

This gives rise to Kant’s second formulation of his categorical imperative. Simply put, it

has been generally interpreted to mean that people should not be used by others – and people

should not even use themselves – as means to an end; people should be treated in such a manner

that they be developed and actualized into dignified, respectful and respected human beings.

Human rights, as defined by the UN Declaration of Universal Human Rights (UNDUHR), seem

to be rooted in Kantian ethics and labor unions, with their emphasis on protecting workers rights,


preserving their dignity, uplifting them from the low wages that keep them impoverished, and by

empowering them through the collective bargaining process undoubtedly agrees with the Kantian

principle that workers are people who should not be used by businesses as the means to their

[business] ends, which is profits.

The collective bargaining process that unions use in order to leverage workers rights

allows workers a voice against authoritarian management, workplace mistreatment, and wage

abuses and so upholds human dignity by empowering them so that they might be fully developed

as respected, dignified, decent wage earning human beings. The dignity and empowerment that

labor unions and the collective bargaining process bring to the worker agrees with the UN

Declaration of Human Rights, and agrees with Kantian ethics.

Business, on the other hand, has proven historically that it would willingly use workers to

its own ends of maximizing profits, hence slavery and abusive working conditions throughout

the industrial revolution, for example. As previously recounted, this profit-maximizing behavior

persists today in underdeveloped countries to which MNCs have transferred their productions in

search of cheap labor. It also exists domestically where businesses are imposing greater work

burdens upon their employees, while demanding higher productivity from workers, with no

corresponding increase in real wages. In underdeveloped countries the below subsistence wages

paid to workers violate Kantian ethics because such wages imply that the value of a worker’s

efforts is practically worthless and thus robs the worker of human dignity. When workers are

prevented from joining unions in order to collectively bargain for increased wages in order to

improve their economic condition, their basic human rights are violated and the Kantian

principles embedded in these human rights are also violated.


For example, in a study on the effects of the politically popular 1996 Personal

Responsibility and Work Opportunity Reconciliation Act (PRWORA) upon women welfare

recipients in Philadelphia, Cleaveland (2004) found that efforts to move women from welfare

dependency to self-sufficiency produced resistance and refusal to work when these women were

put into menial, very low wage, subservient work that they felt stripped them of their dignity

because of the below poverty-level wages paid to them, poor working conditions and the

authoritarian behavior of their managers. Additionally, these women saw no means to advance

beyond their subservient status and had no hope of being able to provide for themselves or their

children on these wages. Cleveland (2004) concluded that the data suggested that very low wage

people were not able to find dignity in virtually any [low-wage] job (p. 55). This implies that

there is a relationship between very low wages and workers’ dignity. Nonunion, very low, below

subsistence wages therefore seems to imply that the worth of a worker’s efforts is negligible and

so devalues the dignity of the worker by devaluing his or her efforts. This, then, is an assault on

human dignity and violates Kantian ethics since these types of wages do not allow people to

develop into an autonomous, productive end; instead very low wages insist that people are the

means to a profit-maximizing end. From the Cleaveland (2004) study it can be concluded that the

PRWORA efforts to get people off welfare by any means - even if they were stripped off human

dignity in the process – violated Kantian ethics because these women were being used as a

means to a political and/or business end.

A Utilitarian Perspective:

John Stuart Mills (1863), one of the early proponents of utilitarian ethics, described

utilitarianism thus:

The creed which accepts as the foundation of morals, Utility, or the Greatest

Happiness Principle, holds that actions are right in proportion as they tend to


promote happiness, wrong as they tend to produce the reverse of happiness. By

happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and

the privation of pleasure (Ch. 2).

Widely taught in business schools and used in management theory as a decision making

tool, utilitarianism seeks to scientifically assign a cost and a benefit to actions and is generally

understood to be “the maximization of some sort of good” (Audi, 2004, p.611). In business, it

therefore informs decisions that concern how actions are quantified and how the economic costs

and benefits of those actions are assessed and distributed among stakeholders. Under this type of

simplistic approach, the idea of what is considered ethical is closely aligned with the outcome of

an action (Nantel & Weeks, 1996); that is, the right action should always be that which causes

the greatest good/utility/happiness for the greatest number of people, at the lowest net cost.

As mentioned previously, the purpose of a business is to be profitable and in order to be

profitable it helps to have, for example, lower operating costs than its competitors, higher

productivity, greater efficiency and a competitive edge in the market. Although unionism and

collective bargaining have been largely responsible for the higher wages, safer working

conditions and various other worker protections in America and in most developed countries,

these gains naturally impose higher costs on the operations of a business since some of the cost

factors that affect profitability include labor, and the laws and regulations that protect workers

and the environment. Labor costs are extremely low in underdeveloped countries due to the fact

that, in order to attract multinational corporations, unionism and collective bargaining are either

generally not tolerated, or the infrastructures that are necessary to impose or monitor labor and

environmental laws (where they do exist) are generally not developed, or such laws simply do

not exist in the these countries (Young, 2004; Arnold, 2003). Although MNCs frequently operate

in countries where morally objectionable business practices are tolerated (e.g. Arnold, 2009),


they are able to gain significant competitive edge when they relocate their productions to these

countries for they are thus able to avoid the higher labor and other operating costs that exist in

developed countries. Businesses, therefore, have a self-serving interest in restricting or

preventing unionism and collective bargaining in these countries, and in keeping the costs of

labor as low as possible.

From a utilitarian point of view, it could safely be assumed that there is a finite amount of

workers who produce these goods under non-union, very low wage, and poor working

conditions, and that a specific cost can be assigned to this labor. Since these workers accept the

wages paid to them and the conditions under which they labor it can be argued that the workers

themselves have assigned a very low value to their own labor; therefore, business has a duty to

shareholders to purchase this labor at the lowest price possible in order to fully maximize the

utility or happiness that shareholders and global consumers would enjoy through the

consumption of lower cost goods. It can also be assumed that there is an inestimable amount of

consumers and possible shareholders who would enjoy the goods and the competitive benefits

gained from the low production costs, and that a sum greater than the cost of the nonunion labor

could be assigned to this enjoyment. In a cost-to-benefit analysis, the benefit to consumers and

shareholders would be greater than the cost of production; hence, greater utility/happiness can be

attributed to consumers and shareholders in comparison to the distressed workers. Therefore,

since there are more consumers and shareholders than low-wage workers combined, utilitarian

ethics would seem to support the idea of producing goods at the lowest possible costs since the

greatest happiness or utility would be enjoyed by consumers globally who would then be able to

purchase these goods at low prices - despite the misery imposed upon workers who make these

goods. From this viewpoint, unionism and collective bargaining would be unethical and would


violate utilitarian principles since they would impose higher costs on production and on the

goods produced; this would thus lower utility/happiness of consumers since fewer people would

be able to afford to buy and enjoy the higher priced goods. This could negatively affect a

business’ competitive edge and have a corresponding negative effect on investors and

shareholders.

Yet, on the other hand, it can also be argued that utilitarianism principles are actually

violated by very low wages and poor working conditions and the lack of union representation,

and that the collective bargaining process that could change these conditions and produce the

greatest good. For example, the utilitarian viewpoint purports that an action is right and ethical if

it produces the most net good or positive value for the greatest amount of people, at the lowest

possible net cost or negative value; this is understood to be what is termed the “distributive

formulation” (Audi, 2004, p. 61; Nantel & Weeks, 1996). Therefore, as a decision making

business tool, utilitarianism must necessarily assign an economic cost to every action, and weigh

that cost against the benefits that the action will produce. However, while utilitarianism might be

able to assign a value to labor and the subsequent utility that consumers derive from

nonunionized labor, it remains problematic in its inability to clarify and accurately quantify such

intrinsic values as “good” or “positive value” or “unhappiness” or “negative value”. As Audi

(2007) asks, “What, for instance, are pleasure and pain? Is the former partly sensory, and is the

latter entailed by, say, shame or embarrassment? Is suffering necessary for pain, and how are

they related, empirically and ethically?” (p. 596).

For instance, utilitarianism cannot accurately measure the disutility or unhappiness

associated with the pain and shame of very low wages that keep workers in poverty. How can

one measure the cost of lost dignity, unhappiness, lost opportunities for oneself and one’s family


and future generations when very low wages confine a person to grinding poverty? How can lost

potential be measured when the children of these workers are forced to grow up in poverty,

without opportunities for advancement through education and well paying job opportunities?

Extant studies have linked poverty and lack of opportunities to violent crimes (Stretesky et al,

2004; Lee, 2000; Chien-Chien et al, 2004). This fact alone raises questions about the impact of

nonunion very low wages upon global threats of terrorism by impoverished youths in

underdeveloped nations against what might be perceived as wage slavery by developed nations.

Utilitarianism cannot measure in dollars and cents the economic cost of these and yet to be

performed threats and acts of violence or terrorism against developed countries, or the

unhappiness these threats provoke; therefore it must either calculate the “infinite stream of

consequences” (Audi, 2007, p. 596) if it chooses to ignore or discount unionism’s value to

society - or find some way to estimate them at the time of the decision making process (Audi,

2007).

It would, therefore, seem reasonable to conclude that unionism can promote the greatest

utility or happiness for business, workers and for society as a whole for, as history has shown,

unionism and collective bargaining lifted working masses from poverty, created a middleclass

and expanded the consumer market to the benefit of business, and also helped to democratize

nations such as Poland and post-Nazi Germany. From this perspective, unionism and collective

bargaining upholds utilitarian principles, and its suppression is wrong as it “…tends to produce

the reverse of happiness” (Bentham as cited by Audi, 2007, p. 595) and contributes to grievous

harms against workers and untold future generations.


A Rawlsian Perspective

Rawlsian ethics deals with questions of justice as fairness. Decisions about what is just,

Rawls proposed, should be made from an imaginary “original position” by rational people

behind what he termed “a veil of ignorance” (Silaen & Smark, 2006). In this imaginary position

rational people would be totally ignorant of their state of being (i.e. their age, race, gender, socio-

economic position, etc) and from this position of ignorance they would be more likely to make

decisions that were just and fair to everyone in general since, presumably, they themselves would

be affected by these decisions in whatever state or circumstance they were to emerge into (Silaen

& Smark, 2006). In this manner, justice would be fair and equally distributed to all. Rawls,

according to Silaen & Smark (2006) in citation of Shaw and Barry (2004), assumed that people

would make decisions that supported the idea of primary social goods, which were understood to

be such things as the just distribution of income and wealth, and the division of “rights, liberties,

opportunities, status and self-respect” (Silaen & Smark, 2006, p. 45). These principles of

distributive justice are paraphrased by Velasquez (2006) thus:

1. Each person has an equal right to the most extensive basic liberties compatible with

similar liberties for all, and

2. Social and economic inequalities are arranged so that they are both

a) to the greatest benefit to the least advantaged persons and,

b) attached to offices and positions open to all under conditions of fair equality of

opportunity (p. 96).

Rawls’ approach to how justice is shared and distributed offered what Silaen & Smark (2006)

describe as a “color-blind, time-blind and class-blind” (p. 47) process that was based in fairness

and equality toward all. In the matter of unionism and collective bargaining, the question of


justice, equity, and fairness in relation to disadvantaged workers arises when one considers the

matter of very low wages, poor working conditions, and the inability of the worker to bargain or

negotiate with management for better working conditions or higher wages on her own, or to join

a union and bargain collectively. As previously mentioned, unionism and collective bargaining

give voice to workers in management decisions that affect them, equalizing power so that

workers can address inequities in their working condition. Understandably, a tension exists

between business and labor since it is in the interest of business to minimize operating costs and

one of the ways to do this is to purchase labor as cheaply as possible; it is also in the best interest

of workers to be fairly paid for their labor – something that MNCs thus far have seemed

unwilling to do.

As pointed out earlier, this quest for cheap labor, especially in underdeveloped countries,

can and do create situations in which injustice and unfairness abound (Meyers, 2007). This

tension can produce violent confrontations as conflicting interests collide - as happened in

Bangladesh in 2010 when garment industry workers rioted over the paltry wage increase from

$24USD per month to $40USD (International Labor Rights Forum, 2010). When a worker who

is in desperate or abject poverty sells his labor for wages that lifts him from abject poverty to

mere poverty, one can assert, as many MNCs do, that he has improved his condition because of

his wages; however, if he has no hope of lifting himself from poverty into a higher standard of

living because he is powerless to bargain with his employer for higher wages and must

continually work for very low wages while his employer becomes more and more enriched, then

it is reasonable to say that his employer is unjust and his situation is unfair. This is a violation of

Rawlsian ethical principles.


According to Day (2005), in his1971 book A Theory of Justice, Rawls saw a just society

as one in which market inequalities were addressed by “… redistributing a portion of the social

product so that each citizen is guaranteed the primary goods needed to pursue a ‘rational plan of

life’” (p. 254). If this sentiment is viewed from the perspective that “social product” can be taken

to mean a better life, and “guaranteed primary goods” can be viewed as fair, livable wages, then

it can be argued that when unions succeed in obtaining higher wages for workers, under Rawls’

notion of distributive justice, a redistribution of wealth occurs (since higher wages necessarily

mean lower profits for business). However, the higher wages reduce inequities and allow

workers to pursue a better future – a “rational plan of life”. Klein (2008) discusses the two

Rawlsian principles that propose a solution to injustice:

1. The equal liberty for all principle, which insists on the protection of every person’s

liberty equally

2. The difference principle through which “…inequalities should be arranged to serve

everyone’s advantage and be open to all. All social values are to be distributed equally

unless an unequal distribution of such values is to everyone’s advantage. By implication,

actions that cause some redistribution of values are just to the extent that differences

between parties are narrowed” (p. 36).

In other words, Rawls believed, as did Kant, that human dignity must be upheld and

protected equally for all citizens, and that society must find ways to ensure that the most needy

or vulnerable members of society can improve their situations, thus narrowing inequality gaps

among citizens (e.g. Reidy, 2007). These two principles also agree in spirit with the UN

Declaration of Universal Human Rights which, it can be argued, seems to be steeped in Kantian

philosophy.

Unionism, with its democratizing processes and its insistence on giving all workers,

regardless of color, race, gender, creed, or other “limitations” an equal voice and representation

in the workplace, upholds these Rawlsian principles. The collective bargaining process respects


the equal liberty and the difference principle in that, as discussed earlier in this paper, it

promotes justice and fairness in the workplace and raises the standard of living for all workers in

society for it bargains for higher wages and better working conditions. Historically this has

resulted in wage improvements and worker safety and benefits for all workers - union and

nonunion. When businesses prevent unionization and insist on paying below subsistence wages,

they oppose the workers’ rights and freedom to improve their socio-economic condition, and

thus violate Rawlsian ethical principles, for this perpetrates inequality in society. In other words,

they violate Rawlsian ethics for they do not employ the veil of ignorance principle that would

allow them to make just decisions as if they would be the beneficiaries of these decisions at some

point in time.

However, it can be argued that even though unionization and collective bargaining might

uphold Rawls’ principle of distributive justice, it could also be considered unjust and unfair by

some - and might actually violate workers’ freedom of choice. Unionism and collective

bargaining can dilute individualism (Adams, 2005) and liberty since all union members must

collectively agree to the terms of bargaining agreements and other considerations such as

political party endorsements by their unions when, individually, members may be at personal

odds with those decisions. This would speak to the Libertarian ethics of Milton Friedman.

A Libertarian Perspective

The core principles of libertarianism concerns the ideas of individualism, self ownership,

free markets, and the “minimal” state (e.g. Arnold, 2003). Libertarian ethics hold that there

should be no – or at least very limited - constraints upon individuals; people should be free to

basically do whatever they want so long as they do not impose on the freedom of others, and

government should have a minimal role in market interactions and in the lives of individuals


(e.g. Nozick as cited by Arnold, 2003). Libertarianism supports free-market capitalism and the

freedom of marketplace interaction with little or no government intervention (e.g. Arnold, 2003).

This libertarian principle would therefore support the argument that low wage workers are free to

leave their places of employment in individual pursuit of better opportunities if they are not

satisfied with their working conditions. However, this seems to be a cynical assertion since in a

poor economy where jobs are scarce, or in underdeveloped countries where all MNCs might be

competing for ever lower wages, no such opportunity might exist; therefore, oppressed workers

cannot exercise this freedom or right. Meyers (2007) opines that when employers take advantage

of unfair situations and drive hard bargains against desperate workers, they undermine the

autonomy of these workers who have no other realistic options (p. 620).

Concerning the behavior of corporations, libertarian ethics hold that it is “…the

obligation of publicly held corporations to maximize profits for shareholders within the bounds

of certain moral side-constraints” (Arnold, 2003, p. 156). This view echoes Milton Friedman

(1970), who has been hailed as the most influential Libertarian of the 20th

Century (Bicksler,

2007) and who famously opined that business have no social responsibility other than to increase

profits while engaged in free and open competition. Under Friedman’s libertarianism, unionism

and collective bargaining would be unethical as unionism imposes constraints upon businesses,

and collective bargaining violates individual autonomy (Adams, 2005). However, given that

libertarianism promotes individual choice and freedom above all, it can be argued that businesses

actually violate libertarian principles concerning individual freedom of choice when they prevent

workers from exercising their freedom to join unions. A major problem with libertarianism is

that it assumes that all parties are acting in good faith, and are treating all parties equally


(Adams, 2005). However, history has shown that businesses do not treat workers fairly or

equally outside of union or government intervention.

As already mentioned, in its pursuit of increasing profits many businesses have off-

shored their productions to very low wage undeveloped countries with lax legal or regulatory

institutions (Arnold, 2003). This action alone seems to satisfy Friedman’s libertarian principle as

the responsible, profit maximizing thing for a business to do since wages - long influenced by

unionism and collective bargaining - are higher in developed countries and can therefore have a

minimizing effect on a company’s ability to be competitive in the market. In the interest of

operating with maximum freedom from regulations, in underdeveloped countries in particular -

absent union and collective bargaining constraints - businesses have been operating with a

myopic focus on profit maximization and with little or no social responsibility conscience.

Operating under these conditions, free from legal or other constraints, the authoritarian tendency

of business to exploit workers can be exacerbated. However, as Wolff (2006) points out “the

right to liberty should never be construed to be a right to do whatever way one wishes, including

ways that harm others” (p. 1611).

Conclusion

There is no doubt that it can be argued that unionism and collective bargaining are:

unethical practices because they constrain the freedom of management to act as they choose;

costly because they increase wages and operating costs while reducing profits; inefficient because

they divert time energy, and other resources away from other business activities toward often

prolonged and contentious bargaining efforts; stifle individualism because they necessarily

depend on collective effort in order to produce a collective voice; violate the property rights of

business, since union recruitment efforts most often take place in the place of business or on its


premises. However, as already demonstrated, unionism builds democracy; it reduces the power

of capital and privileges of birth, reduces income disparity, upholds and insists upon individual

freedoms of speech, choice, and assembly; it emancipates, empowers and transforms workers

from poverty and powerlessness to equal citizens, and preserves the family and family values

(Fick, 2009; Bennett & Taylor, 2001; Coleman, 1988). As Ackers (2007) in citing Clegg (1950,

pp. 9–10) noted, “‘in any form of society, and under any form of management, workers will need

trade unions to look after their interests’ (p. 82).

Despite the socioeconomic gains that unionism and collective bargaining have provided

society, in many developed countries today, unionism has been in steady decline (Pencavel,

2005). As mentioned before, coinciding with the decline, CEO compensation and wealth have

risen, while middleclass earnings and wealth have fallen and disparities in income and wealth

have grown, suggesting a link between the decline in unionism, the increase of wealth among a

very small percentage of society, and the decrease in income and wealth among the middleclass.

Clearly, while unionism and collective bargaining will probably never be supported by a Milton

Friedman (1990) Libertarian point of view, which touts the virtues of liberty and freedom from

constraints, and which supports the position that businesses exist to maximize profits to the

exclusion of any corporate social responsibility, it absolutely satisfies the Kantian categorical

imperative that human beings – by virtue of being rational thinkers – have dignity and should not

to be used as means to an end but should be ends in themselves and should be developed to be

respected, autonomous human beings.

Unionism also satisfies Rawlsianism justice, moral rights and duties - and even the

utilitarian theory that decisions should be made based on what produces the most happiness or

benefit to society at the least net cost - for unionism produces higher wages, better working


conditions and democratic processes that have an immeasurable, beneficial and cascading effect

throughout society; additionally, it also upholds the spirit of the United Nations Universal

Declaration of Human Rights.

Finally, although unionism and collective bargaining would most likely violate libertarian

principles since they impose constraints upon businesses and the use of their property, it appears

that it would uphold worker dignity, liberty and freedom against the authoritarianism of profit-

maximizing management, and thus uphold the spirit of the UN Universal Declaration of Human

Rights, Kantian, Rawlsian and Utilitarian ethical principles.


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Documents

i The Ethics of Unionization and Collective Bargaining ... · Unionism and collective bargaining have been responsible for changing the relationship between workers and their employers