18 Advantages and Disadvantages of Collective Bargaining

Collective bargaining is a process of negotiation usually included with workplaces which have union representation. All employees in the United States have a general right to request a collective bargaining agreement with their employer on their own too, although this right is sometimes restricted in its application.

The process of collective bargaining allows each worker to negotiate for better wages, working conditions, and benefits in exchange for their compliance with workplace expectations. Employers also use this process to find the best employees, reduce turnover rates, and improve productivity levels.

Most agreements achieved through collective bargaining set specific standards of conduct for all parties in the workplace. This enhances safety, promotes a higher wellbeing, and encourages loyalty by removing the personal pain points of workers whenever possible.

The top advantages and disadvantages of collective bargaining look at how the enhanced welfare of workers balances with the added cost of doing business. These are the vital key points to review.

List of the Advantages of Collective Bargaining

1. There is no requirement for collective bargaining to be an eternal contract.
Most collective bargaining arrangements are contracts which last for a specific period, usually somewhere between 2-5 years in length. Both sides in the negotiation may request shorter or longer contracts based on what they require. Although both sides want to improve their standing in future contracts, the fact that a “future” agreement is possible makes this arrangement beneficial for all parties involved. There will always be a chance to make changes when the current contract expires.

2. It represents each employee within the workplace.
The collective bargaining process does not exclude workers, even if they are not represented by a union. That means everyone benefits from the negotiated rates and benefits brought about by the contract. Each group must have representation for the contract to be valid too, which gives each group an opportunity to express their concerns or offer their ideas before the agreement governs daily work. Most jurisdictions allow representation whenever someone’s employment could be impacted by collective bargaining.

3. Collective bargaining encourages relationship formation.
People negotiated in good faith more often when there is an established relationship governing their work. That doesn’t mean employers and employees must become friends for the formation of a contract. There is a need for open lines of communication to be continually available for both sides to prosper in negotiations. When each side focuses on meeting their primary needs only, that’s when a collective bargaining agreement often fails to support the requirements of the workplace.

4. It is a contract which provides binding results to all parties.
You can’t change the rules once a collective bargaining agreement governs the workplace. Each party is bound by the policies and procedures included with the contract. That means everyone involved has legal standing should an issue at work come up in violation of the agreed-upon terms. When one group or party fails to live up to their standards in the contract, then the collective bargaining agreement is useful as a legal defense when someone becomes injured physically, financially, or in some other way while at work.

That means employers, employees, and any union representation all have access to a higher level of security to defend their livelihood.

5. The negotiation process encourages cooperation from all parties.
The collective bargaining negotiation process must be done in good faith for the contract to have legal standing in most jurisdictions. That means each group must work with the others involved to benefit everyone. There must be a balance achieved where everyone gets something they need, but not necessarily everything they want, through a perspective of sincerity or honesty of intention.

Acting in good faith creates standards in the collective bargaining process too. Groups are held liable sometimes if they refuse to uphold their end of the agreement for reasons which have little or nothing to do with the issues involved.

6. Collective bargaining offers a consistent workplace for all parties.
Most states in the U.S. use contractual employment through an at-will status. That means employers or employees can terminate their working relationship at their discretion. This practice sometimes creates inequality in bargaining power, as an individual worker seeking collective bargaining for themselves could be terminated just because they pursued that action.

That’s why unions often come together to create a collective bargaining contract in the first place. Employers can afford to let one worker go, but it becomes difficult to replace whole groups of employees. When these groups reach an agreement, the contract extends coverage to the individuals involved who may not wish that type of group representation.

7. These agreements improve the quality of life for each worker.
The collective bargaining agreements negotiated in good faith often support higher wages for each worker. Many offer additional benefits, such as healthcare access or retirement benefits, which would not be available to self-employed workers or individual contractors. Workplace conditions become safer under collective bargaining contracts too, as employers and workers are both held accountable for ongoing maintenance and inspection concerns.

When these benefits are available over the life of a collective bargaining agreement, the quality of life for each worker improves. They have more money to spend, allowing them to afford a more beautiful home or vehicle, while being offered a safer workplace where they have better guarantees about coming home each day.

8. Collective bargaining ensures each worker has a say in their workplace.
Individuals often find it difficult to negotiate on their behalf with their employer. Most workers, especially when they are in a non-union position, are often told that they can take the offer or find a different job. It is a process which creates a “race to the bottom” in wages because there always seems to be someone willing to work at a lower rate of pay. The collective bargaining process changes this point of emphasis, allowing workers to advocate for one another while protecting their best interest simultaneously. People saying the same thing together is more challenging to ignore than one person trying to make a difference on their own.

9. It encourages greater economic growth.
When collective bargaining agreements govern the workplace, then the distribution of income throughout society begins to balance itself out. At the peak of unionization, in the 1940s and 1950s, there were periods of strong economic growth and minimal income inequality. As the drive to push unions out of the workplace strengthens, the societal benefits of the past begin to fade. The top 1% currently owns about 40% of the wealth in the United States, according to 2018 figures.

In the 1950s, the top 0.1% owned less than 10% of household wealth. In 2013, that rate approached 25%, which was a rate achieved just before the sizeable economic crash in the 1930s.

List of the Disadvantages of Collective Bargaining

1. There are no guarantees found in a collective bargaining agreement.
Collective bargaining does provide benefits for both parties when negotiated in good faith. There are contracts out there which do not offer these benefits either. Some contracts require no productivity requirements from their workers, making it a challenge to discipline workers who don’t produce regularly. Employers can negotiate contracts which allow them to pay non-living wages to workers too.

Both sides can lock themselves into long-term positions which place their financial security at risk because of the agreement. Some collective bargaining contracts are even found to be invalid when challenged. A CBA does not guarantee positive results.

2. Collective bargaining changes the workplace.
Most collective bargaining agreements involve union representation working with the management of the corporation which hires employees. Several companies discourage unionization because it typically increases the cost of doing business. Unions actively recruit in the workplace too, seeking to improve their numbers to generate more leverage when the next contract comes due.

Amazon uses training videos with Whole Foods to teach workers how to watch for unionizing activities. According to The Guardian, managers were instructed to tell possible union members that joining was a “roll of the dice.” One cartoon character in the video says, “Having a union could make it hard to stay competitive because they don’t share our same values.”

3. It is used as a political tool.
Collective bargaining is often associated with Democratic political fundraising efforts. The same Amazon training video mentioned in point #2 even mentions this characterization to workers, targeting Republicans and conservatives in their approach to prevent unionization. That means an undercurrent of political discrimination is sometimes used as a way to keep workers “in line” with employer expectations.

According to Open Secrets, that point is relatively accurate, with Democrats receiving about $2 million per year, while Republicans received about $200,000 each year. Some unions, however, like the National Air Traffic Controllers Association and the Airline Pilots Association, give a 50/50 split to both sides.

4. Personal differences are lost through the collective bargaining process.
Individuals come together as a group through the collective bargaining negotiation process, which means their personal needs are sometimes sacrificed for the good of the whole group. The actual conversations which hammer out the details of each contract are then handled by individuals, which means more can get lost during the process. Even when groups come together to protect common goals, there is no guarantee that the final contract will reflect their needs.

That is why most collective bargaining agreements require a vote by those represented by it to authorize its use. A majority of workers must approve it for the contract to become active. Even then, a simple majority of 50+ plus one vote is the only requirement, which means many groups can feel under-represented by the governing agreement.

5. Fair representation is not always part of the collective bargaining process.
The trend in the United States is to have unions represent all workers at an employer, even if they are not active participants in unionization activities. That is not the case in every jurisdiction. Some places with non-union members operate under a different agreement than those who receive representation. That usually means the union jobs pay better than the non-union positions. That creates a situation where a few of the workers dominate a majority of the wage resources, reducing the possibility of equal success within the workplace.

6. All workers are bound by a collective bargaining agreement.
The stipulations in most collective bargaining agreements require all parties working for a corporation to follow the rules outlined by the contract. That means a worker could start their job there without any influence on the negotiation process, then be bound by those rules without exception until the next contract period allows them to express concerns.

If new workers disagree with the collective bargaining agreement enforced at the workplace where a job waits for them, then their only option is to look for a different position somewhere else. You must agree with the terms and conditions of the current contract to be employed despite your lack of voice.

7. Collective bargaining requires workers to perform duties outside of regular working hours.
The workers who become involved with the negotiating process of a collective bargaining agreement are given a limited time to strike an agreement during their regular work hours. Many governance activities must fall outside of the regular work hours for the employees involved. That requires several hours per week sometimes in unpaid work to create the results needed for a safe, productive, and profitable workplace. This setup causes some negotiators to speed through the contract formation process, which can limit the benefits available to all workers once enforced.

8. Workers sometimes pay dues to receive representation at the bargaining table.
When unions are responsible for the collective bargaining details from the worker’s perspective, then dues are often required of the employee. Most unions take these dues straight from the paycheck, operating on either a flat fee or a percentage of the paycheck. Some unions demand up to 4% of an employee’s salary to provide representation services. Although union members can be refunded any part of their dues spent on politics, there is no guarantee in the quality of services received for this payment.

9. It creates tension in the workplace.
Union workers score consistently lower than non-union workers on the Work Environment Index published by Gallup and Healthways. Both groups are satisfied with their jobs, but union workers complain more often than their managers act like a boss instead of a partner. Union representation also reduces the amount of trust and openness found in the workplace. When this combines with slower advancement opportunities (often based on seniority), the amount of tension found in a job because of collective bargaining needs can force good workers out of their positions.

The top advantages and disadvantages of collective bargaining look to balance improve wages and working conditions with increased productivity and labor security for the employer. All parties typically give a little to get a little in the final contract, compromising to create something which is mutually beneficial to everyone. The benefits often depend on the skills of the negotiators involved and the size of a group represented, which means some agreements are less beneficial than others.