Labor Markets and Their Many Aspects

Labor Markets and Their Many Aspects

The negative aspects of a loosely-regulated labor market:

The dangers of under-regulation

The labor laws of the state of Pennsylvania are still highly influenced by the unionization movement that began in the steel mills of the state. It is said that "no state in America has a richer labor history than Pennsylvania" (Pennsylvania labor history, 2011, IAP). The AFL and CIO were founded in the state. "The 1877 railroad strike, the 1892 battle of Homestead, and the 1919 steel strike" are all nationally famous incidents that were highly influential upon the development of the modern labor movement and remain potent, collective state memories (Pennsylvania labor history, 2011, IAP). However, "the struggle against child labor, sweatshops and oppressive working conditions unfortunately continue today in the global economy. Workers' rights to form unions and collectively bargain, to have a safe and healthful workplace, and to have health care and secure pensions are still contested in this country and around the world" (Pennsylvania labor history, 2011, IAP). While Pennsylvania's laws are more protective of workers than federal labor laws and laws in many states of the union, it is far from exempt from many of the negative workplace trends of the modern era, including outsourcing of critical jobs and a decline in union membership.

Because of its history in the labor rights movement, Pennsylvania has adopted more stringent regulations in many areas of labor law. For example, its child labor laws mandate that 14 and 15-year-olds can only work 3 hours after school and even family businesses are not exempt from child labor laws. "For minors who are 16 and 17, the maximum hours increase to 28 per school week, plus eight hours each on Saturday and Sunday," which is more restrictive than the federal laws governing child labor practices (Nichols 2010). Overtime must be at least 1.5 times the employee's regular pay rate, although most workers can be mandated to work overtime and there are some exemptions, such as workers paid annually rather than by the hour.

Still, unionization has declined overall in the U.S. And Pennsylvania is no exemption to this trend. Right-to-work states have hampered the ability to organize, and unions suffer from public relations problems. "Unions face critical 'free-rider' problems if membership is totally voluntary. For example, I could benefit from the union's effort to improve working conditions at my workplace without paying dues; I could take or keep a job by offering to work at below the union wage; I could keep working through a strike and then cash in on the success of the strike; and so on. If individual workers can act for themselves in these ways, then it becomes nearly impossible to organize and sustain a union" (Fischer 2010). While 'right to work' laws are defended as promoting employee choice, overall wages in these states are lower than states that do not have them. "The average worker in a right-to-work state makes about $5,333 a year less than workers in other states ($35,500 compared with $30,167). Weekly wages are $72 greater in free-bargaining states than in right-to-work states ($621 versus $549)" (Right to work for less pay, 2011, AFL-CIO).

Unions have been criticized for being greedy, particularly in the case of government and professional unions when defending worker benefits when nonunionized private employers are cutting back employment, pensions, and healthcare to cut costs. "The United States' rate of 'union density,' the proportion of employed workers who belong to unions, now about 12%, is far below of that of most western European nations (with the interesting exception of France) which range from about 20% to about 60%." (Fischer 2010). However, there is evidence that the decline in unionization and protective legislation in general has a deleterious effect upon the conditions as well as the wages all workers, particularly low-wage workers. One survey of low-wage workers found that 26% of low-wage workers were paid less than the minimum wage and 76% of those who worked more than 40 hours were not paid overtime, as required by both federal and state laws. Insufficient oversight was cited one of the reasons for such abuses (Bernhardt, Milkman & Theodore 2009). Anecdotal examples of the risks of a lack of oversight of an nonunionized workforce include "the restaurant workers who line up for paychecks after twelve hours of work only to be told there's no money, or the nursing home aide who routinely works well into the night without extra pay, or the temp worker who packs food in an ice-cold warehouse without protective gear only to have the temp agency illegally deduct money from her wages every week" (Bernhardt, Milkman & Theodore 2009).

Within my zip code of 19103 alone, 4942 companies have safety or health violations, and these are only of 'known' violations (Job tracker, 2011, AFL-CIO). Employees who are illegal or 'grey' areas of enforcement of labor laws are often not reported. Workers, particularly in a sluggish economy, often fear the loss of their jobs and are hesitant to report misconduct. "Assuming a full-time, full-year work schedule, workers lose an average of $2,634 annually due to workplace violations, out of total earnings of $17,616 (Bernhardt, Milkman & Theodore 2009).

One of the reasons for frequent workplace violations is the fact that so many jobs are being exported abroad. In my zip code, 50 corporations have been reported as exporting jobs, including major defense contractors and famed corporations such as FedEx. 374 companies have reported mass layoffs (Job tracker, 2011, AFL-CIO). Of course, there are a number of protective statutes that attempt to ensure that workers are not abused by their employers. For example, "Pennsylvania employers are required to post certain notices in their worksites so employees have access to and information about applicable labor laws" and to be aware of their rights (Mandatory posting, 2011, PA Department of Labor & Industry). This is to ensure the fact that employees understand that, regardless of whether they are unionized that they have a way of securing their rights against a more powerful employer.