An Organized Workforce

Labor unions have been in place in the U.S. for many years. Oftentimes, unions are able to secure additional protections that non-union members cannot obtain. We will discuss labor unions further in our case study below. For additional context, please watch the following video that details thehistory of labor unionsLinks to an external site.. This video discusses the emergence and recent downswing of labor unions across the U.S. Keep this video in mind as you work through the case study.

Is Management Compensation Fair?

We have explored what constitutes a fair wage for employees, but what about for management? There have often been situations where the CEO of a company earns a significant pay raise while employees are subject to pay cuts. This can create division between employees and upper management. While it is important that a CEO is adequately compensated so that they do not leave for another company, you also want to ensure that their earnings are not so excessive that it causes dissent among employees.

The followingvideoexplains the rationale behind CEO salaries and describes how many U.S. executives can abuse their power to continue to raise their pay. As you learn about how CEOs increase their salary, think about how this impacts the company's different stakeholders.

YouTube video.The CEO Pay Machine - 5 Facts About CEO PayLinks to an external site..To view the subtitles for this video, click the CC button in the toolbar.

Cases from the Real World [from the textbook, pp. 183-184, section 6.3]

"More than forty thousand Verizon workers went on strike in 2016 (Figure 6.13). The strike was eventually settled, with workers getting a raise, but bitter feelings and distrust remained on both sides. Workers thought management salaries were too high; management thought workers were seeking excessive raises. To continue basic phone services for its customers during the strike, Verizon called on thousands of non-union employees to perform the strikers' work. Non-union staff had to cross picket lines formed by fellow employees to go to work each day during the strike. Enmity toward these picket-line crossers was exceptionally high among some union members.

Figure6.13Links to an external site.Union workers from the Communications Workers of America and the International Brotherhood of Electrical Workers are shown walking a Verizon picket line. They are protesting Verizon's decision to not provide pay raises. (credit: modification of "Verizon on Strike" by Marco Verch/Flickr, CC BY 2.0)

The following articles provide additional details about the Verizon strike. Thefirst articleLinks to an external site.focuses on why Verizon workers felt they were not getting fair treatment. As you read the article, consider the reasons the Verizon workers went on strike and determine whether their demands were just.

Thesecond articleLinks to an external site.discusses the aftermath of the strike. Identify what the employees were able to obtain and consider whether that outcome seems fair for both the employer and employees.

Respond to the following questions:

1. Put yourself in the manager's shoes, who is responsible for mending all the fences after the strike is resolved. How would you begin to repair all the relationships affected by the strike? In particular, make sure to detail how you would repair the relationships of union and non-union workers.
2. What are some practical steps that Verizon could have taken to avoid this situation?
3. How can issues like employee dissatisfaction and equal pay be managed with large corporations like Verizon so that situations do not get out of hand, as in the case above?