“No, sir, we would not.”

— Amazon representative’s response to repeated questions about whether the company would remain neutral if its employees tried to unionize.

‘This is a union town’. NYC councilman says Amazon's HQ2 is 'antithetical' to our values 

CNBC Headline February 11, 2019

Why would Amazon refuse to remain neutral if employees tried to unionize? I’m thinking it wasn’t so much about wages. After all, Amazon employees at the NYC headquarters were expected to earn an average of $150,000 a year. Nope, it was about retaining control over business decisions. Unions often impose rules and conditions that make it harder for companies to compete and grow. For instance:

  1. Long-term contracts can limit flexibility

  2. Work rules can limit job task re-engineering and innovation

  3. “Members first” values can limit technological improvements

  4. Strikes can cripple a business and allow competitors to take over more of the market

  5. Maintaining jobs can limit productivity when not as many workers are needed to produce the same output

  6. Seniority first might restrict performance (when simply being adequate is enough)

  7. Across-the-board rewards can limit performance, because better performance is not rewarded more.

  8. Across-the-board rewards can increase top performer turnover, because they’re not rewarded more for contributing more

  9. Job security terms reduce necessary terminations

  10. Bumping rights (seniority-based layoffs) can be damaging (may have to lay off top performers if they don’t have sufficient seniority)

I’m not against unions as some general principle. I just wish American labor relations were more like what they have in highly-unionized Denmark, where businesses are allowed to hire and fire employees relatively easily in exchange for guaranteeing workers sufficient income and retraining options if they lose their jobs. It’s called the “flexicurity” model. Less zero-sum, more win-win.

References:

Why Employers don’t like Unions by Chitra Reddy

Ins-and-outs of the Danish flexicurity model  by Catherine Stephan