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WHAT ARE CORPORATIONS (EMPLOYERS) AND HOW DO THE INTERESTS OF CORPORATIONS AND UNIONS INTERSECT

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Alphonso W. Nyenuh, MA; Industrial and Labor Relations Cornell University

In our last issue we discussed labor/trade unions- what they are, their relevance and how they operate. Today we will talk about corporations or companies; the employers, so to speak. Al though not every employer is a corporation I am inclined to discuss a corporation as an employer today because corporations are very relevant to the existence and functions of labor unions and because the laws of Liberia do not allow public sector workers to form or to join unions.

We may not be able to get a clear understanding of labor unions and their roles and purposes without discussing employers and their role and purposes because employees who form part of unions work for corporations and their purpose of winning better wages and better working conditions directly intersect with, and impact the goals of corporations, i.e., employers.

WHAT IS A CORPORATION?

corporation is a business or organization formed by a group of people for the purpose of multiplying their money, resources or investments. Corporations, also referred to as companies, or businesses, are entities or institutions formed by individuals or organizations that are interested in making profits. The owners of corporations are therefore the shareholders, those who invest or put their money into the company or corporation. And, as has been said, their goal is to make profit, to increase their money.

TYPES OF CORPORATIONS- EMPLOYERS

There are different types of corporations, privately held and publicly held. Publicly held corporations are those corporations that sell or offer shares to the public; that is any member of the public can buy shares in a publicly held corporation once they have the money to do so. A privately held corporation is one where the offer of shares is limited to only a small group of people or even to one person. This could be the founder(s), a family, a group of friends, etc.

A company share or stock is part of an ownership of the company and people who buy those ownerships are referred to as shareholders, they share in the profits, but also the losses of the company.

Companies serve the interests of their owners or shareholders. The more a company makes, the more the shareholders get in return for their investments. If however, a company makes less money, it means that the shareholders get less in return for their investments and if the company loses money, then the shareholders lose money.

Companies are therefore established and operate to serve the profit interests of their shareholders; that is, to make as much money as possible for shareholders or the owners of the company.  It is therefore the job of the people who run the company- the management team- to make as much money as possible for the owners/shareholders.

OWNERS VS WORKERS

Before we begin to talk about the intersection between the interests of employers (companies) and unions let’s talk briefly about who shareholders usually are, the people who are able to form companies or are usually able to buy or own companies or company shares.

Because starting a company or buying shares in a company requires money, people who own companies or are able to buy shares in companies are those who have money, usually wealthy people or people who, through one way or the other, are able to access or lay their hands on money. This means that it is difficult for a poor person to own a company or shares in a company and it is easier for rich or money people to own companies or shares in companies.

Poor people or people who cannot afford to own companies usually work for companies or money people so as to be able to make a living and those who have money and invest in companies do so to make profit and increase the amount of money they have. That is the reason why many people scholars describe business people as the business class or ownership class and workers as the working class. So business people are those who have enough money and are thus able to hire others to work for them and workers are those who need jobs in order to make a living.

For example, Firestone, Mittal Steel, Sime Darby, etc., are companies owned by shareholders, also referred to as stockholders or business owners, those who had the money to start these companies or to buy shares in them; and those who work for those companies in order to make a living are workers or employees.

The difference in the interests and goals of the business class and the working class is that the goal of the business class is to make profit- the most profit they can make- while the goal of the working class is to be paid enough money to be able to live comfortably, and to work in healthy and safe conditions.

THE CONFLICT BETWEEN THE PROFIT MOTIVE AND THE BETTER PAY GOAL

I am sure by now that you have an idea what the conflict is between the employer or shareholders’ profit motive and the workers’ higher pay and better working conditions goal is.

Employers want profit, as much profit as they can get. To do so, they want to spend as little money as possible on running the business, company or corporation. This means that they may want to pay their workers or employees as little money as possible. According to research, companies spend the most money on their employees or workers, also referred to as the labor force.

As such the first cost that companies or business owners rush to cut is the labor cost, the amount of money they spend on their workers or labor force, so as to achieve their profit motive. This means that they may want to pay their workers less, and not give them, or cut benefits such as healthcare.  They may also want to hire fewer people to do more work or have their workers work long hours, or even implement a quota system that assigns workers huge workloads, as a way of saving money on labor cost.

Employers may also try to limit their operating costs so as to boost their profits by not investing or investing very little in making workplaces safe and healthy and in providing their employees with protective and safety equipment such as steel-toe boots, safety gloves, hard hats, etc., because doing so also requires spending money.

Unions, on the other hand, and as we discussed in our last edition, are group of workers who come together to use their strength in numbers to get their employers to do what the employer would otherwise not do for them. Just as corporations, companies or employers are group of money people who put their money together for the purpose of making profit, unions are groups of workers who come together to fight for fair pay, better working conditions and a voice in what goes on in the workplace, so that the employer does not dominate them and make all the decisions regarding pay and conditions of work. In the past when there were no unions and when workers had no say, and when the employer made all the decisions, workers suffered. They were paid less, they were given very huge and unbearable quotas, and they were fired when even they spoke up.

But with unions workers are given a voice and they are able to demand and to negotiate with their employers on issues such as pay, safety and health in the workplace, benefits such as healthcare and pension, etc. If workers stick together with other workers they can change things. REMEMBER, WORKERS CANNOT ENGAGE IN COLLECTIVE BARAGAINING UNTIL THEY ARE UNIONIZED, and there are laws that protect your right to unionize. An employer cannot fire you for trying to join or to form a union.

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