Comparing labor relations in public and private sectors

Public vs. Private Sector Unions

Public and Private Sector Unions

Collective bargaining in public sector is a recent phenomenon that became common in 1960 and started gaining momentum at the time when unionism in private sector was slowly declining (Reilly, 2012). Changes in the government policies and the legal requirements made the way for the increasing unionism in the public sector. There has always been a debate regarding the issue if private and public sector unions are same; however, Troy (2003) states that public sector bargaining is not the extension of bargaining in the private sector. This paper will answer the problem statement " Are there more similarities or differences between the public sector unions and the private sector unions" by comparing and contrasting the key similarities and key differences between the private sector and public sector unions and labor relations.

Background Information

It is very essential to know the difference between private and public sector in order to understand the similarities and differences between the private and public sector unions. The private sector is composed of the organizations that are owned and run privately. These include all profit and non-profit corporations and partnerships that are not owned by the government in any way. For instance, local businesses, super stores, credit unions and all other organizations operating in the private sector.

The public sector on the other side is composed of all organizations owned and run by government. These organizations are the public authority and include federal, state, provincial, and municipal governments depending upon the structure of the place. For example, police, government educational institutes, government hospitals, prison services etc.

Key Similarities: Public Vs Private Sector Unions

Along with many differences that will be discussed later in this paper; following are some of the key similarities that exist between the private and public sector unions

The practitioners of public sector rely on the private sector approach of labor relations and make the necessary modifications into it, depending upon the requirements. . Therefore, public sectors often hire staff that has experience in the private sector experience. Hence many of the participants of in public sector bargaining are actually trained and gained experience from the private sector (Holley, Jennings and Wolters, 2011).

Employees in the private organizations, join unions when they are not satisfied with the terms and conditions of employment. For instance, if they have issues with the workload, supervision, promotions for which they cannot fight individually. Similar is the case of public sector; employees join unions then they consider union as an institution that can solve their job problems and bring positive outcomes. In fact, public sector employees have more favorable attitude towards union, due to their perception that public managers are less hostile compared to the private sector managers.

The collective bargaining settlements are very much influenced by the persons who participate in the negotiations due to their abilities to increase the bargaining power in front of the opposite party. Therefore, employees of public as well as private sector join unions in order to increase the bargaining power " over the opponent by either increasing the cost to the opponent of disagreeing or reducing the cost to the opponent of agreeing" (Holley, Jennings and Wolters, 2011, p.590). This issue is even more critical in case of public organizations as the public opinion is considered as a very important cost in public sector labor relations.

The private sector unions and the public sector unions, both work for improving the working conditions of employees and increasing their wages.

Key Differences: Public Vs Private Sector Unions

Unlike the case of private sector unions, in public unions, the municipal leaders are elected which creates a political structure in the bargaining process (Reilly, 2012). Proper voting is carried out for electing leader in the public unions; but in private sector, there are very rare workers who are shareholders and can take part in the voting and selection of management.

Public sector employees possess greater power outside of collective bargaining compare to the private sector, and therefore they play an active role in affecting the decisions of management (Reilly, 2012)..

Unions in the private sector are made to distribute profits from owners to workers. This approach cannot be applied to the public sector, as government does not make profits. Therefore, it can be said that unions in the public sector have different goals and different approaches to bargaining (Troy, 1994).

Unions in the private organizations work with in the market economy and affect the economic growth, labor supply, consumer process and profits of the firms. In contrast to this, the public sector unions work as a monopolistic and sole provider of the economic resources to the private and public organizations in the bureaucratic way (Reilly, 2012).

Public sector managers and employees both have same interest and both get benefit when a decision is finalized by mutual understanding. For instance, if the budget of the fire department is increased, than both managers and employees will have confluence of interest. The case is different in private sector unions where usually one side gets benefit while other makes a compromise. Therefore, public sector managers often welcome unions, so that voters can convince to approve the public sector budgets (Belman, Gunderson and Hyatt, 1996).

Public sector unions face a lot more government and civil service constraints and hindrances compared to the private sector unions. Therefore, public unions pass through terrible times if they break any law or spend money on antiunion consultants; which has always been a very common practice in private sector unions.