• authored by Members for Democracy

Concession Bargaining - How Not To

Except in the most extraordinary circumstances, there is no acceptable reason for a union to bargain concessions. In the case of a business that is profitable, there is absolutely no reason for concession bargaining. The results of concession bargaining over the last two decades should stand as proof that concessions do not benefit workers.

While concessions are often presented to workers as "necessary", something that the company needs to remain viable, let's keep one thing in mind: The objective of a business is to maximize profit. Wages and benefits are a drain on the bottom line so it stands to reason that if these can be reduced, profits will increase. Business, therefore, needs no reason to demand concessions beyond the fact that this will improve bottom line profitability. If you don't ask, you don't get. If a union has a history of concession bargaining, the company is that much more likely to ask. Concessions are not a matter of need, but a competitive advantage to be sought out where it may be achievable.

Whether or not concessions will be pursued aggressively by a business depends largely upon the reaction, official and unofficial, of the union leadership to the company's initial pitch for concessions. If company officials perceive that the union leadership is sympathetic or can be persuaded, the assault will begin. Dire predictions and gloomy forecasts about the future of the business will become a constant theme in management communications to workers. Where union leaders have bought in to management's campaign, "message discipline" from the union office will help to persuade the membership until it eventually capitulates and accepts the employer's terms. The gloom and doom is always positioned as if it were fact although for the most part, it is highly speculative, grossly oversimplified and designed to spread fear, uncertainty and a sense that cuts are inevitable and workers should be happy to have jobs on any terms. It's important not to fall prey to the psychological manipulation of "message discipline" or get caught up in distracting talk about unprofitable operations.

The Standard Pitch & What to Pitch Back

Understanding the strategy and a little about basic business principles can help you to keep yourself from getting sold down the river. Here are the stock arguments in favor of concessions and how you can respond to them:

"We're Poor"

If management insists on crying poor, union leaders can always ask that management "open the books" and prove it .If management won't open their books, information on how your employer is doing may still be available to you. For instance, if the company you work for is publicly owned (it sells shares on the stock market), it is required to publish an annual report and other financial data. In addition, many companies post financial data on their corporate web sites for the benefit of current and prospective investors. You can assume that this information is both current and accurate, as it is a serious thing to mislead investors.

It's highly unlikely that you will get the same gloom and doom being hawked around the bargaining table. And don't worry; you do not need to be a financial wizard to understand the picture. It is a simple equation you need to know for bargaining purposes: either the company is profitable or it isn't. If it's profitable, there is no need for concessions. If it isn't, there is probably still no good reason for you to accept them.

We'll Move/We'll Close

Employers looking for concessions often rely two age-old scare tactics to soften up union members prior to entering into negotiations. The threat of closure and lurking competition. In order to maximize profit, a business needs to be in the game. Leaving a market where it is a major player runs contrary to this objective. Few businesses ever pull out of a market where they are a major player so threats to this effect are more likely to be a bluff to leverage management's position at negotiations than statements of the business's true intentions.

We Can't Compete

Competition is a given in a free market economy. Businesses should expect the arrival of new competitors and new business concepts and be prepared to respond to them in ways that allow them to retain a competitive position. Responding to changes in the marketplace is management's responsibility and not the workers'. A business that can't handle competition will not be in business for long - no matter what you give up.

An employer's inability to compete or to meet the challenges presented by the arrival of new competitors is a failing of management. Some businesses are hampered by unhealthy management cultures that tolerate incompetent managers and generate poor management decisions. All things considered, management ineptitude is more likely to sink the business than the arrival of new competition. Rank and file workers should not be responsible for years of bad management. Concessions on the part of rank and filers will not save a business that is its own worst enemy. At the end of the day, it is management's job to deal with the challenges of being in business.

In short, a business that is failing because of inability to compete or because of a management decision to leave a particular market, will do so no matter what the workers give up. Concessions will only serve to reduce workers' severance and pension entitlements when the inevitable comes to pass.

What to do if you're hearing noises about concessions:

  1. Find out what's going on: Be sure to attend any meetings management is holding with workers to talk about the business, and any meetings that your union is having, to discuss negotiations.
  2. Ask your union leaders if management is going to be seeking concessions and what the union's position on this will be.
  3. Make it clear that you are opposed to concessions. Get that message across every time the subject comes up.
  4. Educate your fellow members about what's really up when it comes to concessions. By presenting a united front to management (and union leaders who may have bought-in) you can minimize the possibility that your hard-won gains will be bartered away because management isn't doing its job.

Remind anyone trying to persuade you to accept rollbacks of the following three simple points:

  • The real financial position of the business as presented in their own documents.
  • That it is management's job to make the business profitable.
  • That wage concessions have never helped workers and you have no reason to believe that they will benefit you.

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