Unions in the United States
Unions are the groups of people whom collectively bargain with employers to achieve the benefits they want. In the United States unions are achieving power by performing walk out strikes of specific employees and groups of employees. The United States law regarding labor is historically favoring the freedom of consent and the right to labor. Current laws have denoted the presence of unfair bargaining positions in employment relationships. Labor laws present a set of minimum standards for employment, such as minimum wage, minimum health care, and minimum post employment benefits.
While I was working as an engineer, my employers offered health care and dental plans, as well as significant retirement benefits. These plans are not required by law. The state wide minimum wage rates are required by law. Benefit plans going beyond minimum wage are promoted through employer incentives, granted by the federal and some state governments, such as tax breaks on the dividends of health care and retirement plans.
Some US citizens deny these benefits in favor of more tangible immediate benefits, such as higher pay, or future stock options. Federal corporate and securities laws require companies offering these alternate benefits structures to make them publicly available when the corporation is publicly owned and operated.
Unions in the United States are based on a theory of free consent. Like China, the government adopts some minimum employment terms and benefits, but in the United States, the employers often choose to elect certain tax deductible benefit plans. Plans such as these offer a win-win situation for employers and employees alike; What about investors? Recently Warren Buffet wrote that dividends are the financial weapons of mass destruction. -Wall Street Journal
Dividend Plans are essentially insurance on a failure of an underlying term of a contract. In the case of labor unions these dividends are neither negotiated nor required under the terms of the contracts between individual employers and individual employees. These entities have zero negotiating power over the terms of collectively bargained contracts, and also have no privity of contract with the employee for the negotiated benefits.
For instance, if an employee falls ill and is unable to work as negotiated in the employment contract, the employer must abide by the terms of a separate contract with a labor union, guaranteeing that the employee receives a set of boilerplate benefits under a prior negotiation. These negotiations often take place without the consent or presence of any employees whom become ill. The result is as Warren Buffet, so brazenly stated, that these insurance plans are weapons of mass destruction; in my words, they are ticking time bombs waiting to go poof like a balloon. The fundamental flaw in these collectively bargained contracts, under the current US theory of free consent to contract, is they are legally unenforceable. These contracts, when enforced by law create a case precedent, which favors enforcing non-negotiated contracts.
The current economic emergency is double-fold, one one hand the law is being challenged and maneuvered through, and on the other hand the employees are seeing little to no benefits within the time when benefits might actually do what they should. Essentially Warren Buffett is walking away from this disaster before the American Juries catch up to his financial master plan: Sell empty promises and close the buffet before Americans get their just deserts.
Labor Unions in China
Chinese government institutions operate under the theory of compulsory unionization, where the government requires employees to receive benefits under a collectively bargained negotiation. Unlike free market unions in the U.S. and elsewhere, Chinese unions punish employers for denying benefits and correct the situations through proportional measures.
The use of the strike by US labor unions is often a non-proportional response to individual labor groups concerns, and even at times the result of ambitious salary goals in the labor class. Under the compulsory theory, there is no independent class of laborers. An admonition by a government official and a nurturing hand in correcting and alleviating the real concerns of employees creates a set of laws designed on the whole to elevate the working class, while limiting institutional leaders ability to act irresponsibly.
Non-government companies may not have labor unions, and employee-employer disputes are handled privately or in the court systems.
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