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ASSIGNEMENT-01
FedEx
The average union member earns more than the average non-union
worker, however that does not mean that union membership will raise
wages: Few workers who join a union today get a pay raise. The
economy has become more competitive over the past generation.
Companies have less power to pass price increases on to consumers
without going out of business.
It is also fact that FedEx is the last remaining major express shipper
that is not unionized.
Other unionized company like UPS, have to compete with nonunionized FedEx, so forcing FedEx to form a union would be creating a
union monopoly.
Questions to be asked.
Consumers may have to pay a hidden package tax to fund this bailout.
Estimates vary, but a mere 10 percent increase in costs would result in an
extra $9 billion cost for consumers. Not to mention reduced reliability, longer
shipping times and more limited access to rural markets around the globe.
FedExs profit margins will remain the same because it is a publicly traded forprofit business. As demonstrated above, unions raise a companys cost of
doing business. Is it unreasonable to assume that a cost increase (the hidden
package tax) will fall on its customers shoulders?
FedEx claimed that UPS was trying to receive a government bailout designed
to limit competition for overnight deliveries. The disagreement was over a
provision in a Federal Aviation Administration reauthorization bill, which would
reclassify FedExs non-airline employees under the National Labor Relations
Act instead of the Railway Labor Act (RLA), making it easier for them to form
local unions. UPSs ground workers are already covered by the NLRA, and so
its employees are often members of the International Brotherhood of
Teamsters. While UPS claims that FedExs ground employees should be
covered by NLRA so employees performing the same function at different
companies have the same rights, FedEx argued that UPS was trying to force
them to expose customers to local work stoppages that could prevent the
delivery of time-sensitive shipments to lower competition.
Unions do not have the resources to monitor each workers performance and
tailor the contract accordingly. Even if they could, they would not want to do
so. Unions want employees to view the unionnot their individual
achievementsas the source of their economic gains. As a result, union
contracts typically base pay and promotions on seniority or detailed union job
classifications. Unions rarely allow employers to base pay on individual
performance or promote workers on the basis of individual ability.
Consequently, unions do not negotiate higher wages for many newly
organized workers. As I joined the FedEx recently, it is wise to not sign for
unionization at FedEx.