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Economics

In the News

Joe Biden voices support of workers' right to join unions

Ollie Gardner

2nd March 2021

Joe Biden has implicitly voiced his support for Amazon workers in Alabama to be able to choose whether or not they want to join a trade union.

Amazon, the second biggest private employer in the US, currently has no unionised labour in the country and so the decision by 4000 Alabama warehouse workers on whether they wish to be represented by the Retail, Wholesale and Department Store Union (RWDSU) may have large knock on effects for the other 400,000 US Amazon employees.

Amazon has actively campaigned to discourage their staff at the warehouse in Bessemer, Alabama from voting to be represented by the union, for example, by displaying stickers on toilet cubicles that question the benefits of paying the $500 union fees.

This vote, with mail-in ballots due in by the 29th March, will give an indication as to whether Joe Biden's desire to increase union membership in the US is likely to prevail. In the private sector, union membership in the country has fallen from 20% in 1983 to just 6.2% in 2019.

Trade unions can be an effective way to counter the payment of wages by monopsony employers that are lower than workers' marginal revenue product (how wages are determined in competitive labour markets). Trade unions can not only raise wages for employees, but may also increase the level of employment within the company. The extent to which the RWDSU would be able to raise wages depends on the elasticity of demand for the warehouse workers as well as the proportion of workers who are union members. If Amazon succeed in limiting the proportion of its Bessemer employees who join the RWDSU, they will have less bargaining power to demand changes in working conditions from Amazon.

Ollie Gardner

Ollie is a new economics teacher at an academically selective school having previously worked in the healthcare technology industry.

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