UNIONS: Good, Bad... which and why?

[Andres]

Just some random thoughts.

Instead of having a conflict situation of company vs. employee, why not put them into a different construction?

In these days of recession, I, among many I assume, have been reflecting on several phenomena in our capital oriented societies and I think we should dare to question everything, even those things we have always taken for granted and un-changeable (sp?) thus far.

The more I think about it, the more I dislike the idea that a company is, in the end, owned by the accidental owners of some pieces of paper, the shareholders.

A company is a symbiosis of money and labor.

When a company starts, you need an input of money, but you also need work force.

The one who brings the money, gets the shares and owns the company and will get the profits made by the company. The one who works gets a salary, but no ownership, allthough his input is as crucial as the input of the guy with money. Can't have a company with money alone, can't have a company with labor alone, yet from the very start there is this discrepancy between the guy who brings in money and the guy who brings in labor.

But over the years, it is the people who actually work in that company that generate income and, once the initial investments are paid of, profit. At a certain point of time, it just feels plain wrong that the one who holds the shares that once belonged to a guy who put in a small amount of money (small in comparison to the income/profits made by the company over the years thanks to the hard work of the employees), owns the company (i.e. "the money" owns the company) and the years of hard work don't give ownership in the company (i.e. "the labor" doesn't get any ownership whatsoever) (unless they buy shares on the stockmarket or the benevolent board of directors decides to reward an employee with stock options etc., but that's not my point. The point is that ownership of the company should be inherent on working in that company, as in : you work for company A = you own a piece of company A).

It feels even worse when a company makes profits during e.g. 10 years and then, when it goes bad for one year, those who have worked their butts off, are the ones to lose their jobs, while the guy who had the piece of paper in the previouos 10 years ran away with most, if not all, the profits of the company. Sure, his piece of paper loses value, but he also had all the profits, and, unless the company goes bankrupt, if he keeps it, he'll get profits again when the company is back on its' feet.).

I know there are some flaws in the previous paragraphs, and it's more a feeling then rational thinking, but it just feels wrong somehow.

Why not giving the employees ownership of the company by attributing 25 or even 50 % of the shares to the pool of employees? Not as an individual right to each employee as in, each employee gets x shares in the company and even when he leaves the company, he holds those shares, but more as a permanent property right to the group of employees at any given time. Make abstraction of the individual employee, they come and go, but consider the employees an entity that always holds a certain percentage of the property rights in the company. A percentage that isn't for sale but will always belong to the group of employees and which gives them the right to vote on the meeting of shareholders. They can vote among themselves to decide how they will vote in a shareholder meeting or what points they'll put on the agenda.

Make the employees a group of shareholders in the company with actual decision power. Instead of the conflict model that is inherent on Unions vs. Employer, employees and employer would both, together, be running the company. Well, not running it, you have a board of directors for that, but both employees and (the other) shareholders will have the power to have the last say in the company. A form of obligatory employee ownership as an alternative for unions.

I hope this isn't too much OT, because this probably belongs more in a topic about corporate governance then about unions. My problem with unions is that it starts from a conflict model. Employees need protection, but imho (partial) employee ownership is a much better alternative.


Am I a communist now?