Labor Relation

Need the following questions answered below. I have provided additional information to help assist with understanding and properly answering questions.  There is no minimum number of pages or words required. Simply answer the entire question completely. 

1. When using the ability-to-pay method of wage determination, what factors need to be included in evaluating an employer’s ability to pay? (see attached Word document)

2. Health insurance plans are almost always included in labor agreements. Discuss recent developments of this benefit in terms of (see health care document 1&2)

*What is covered 

*What it costs

*Who pays

* Include in your answer the most recent attempts at controlling the skyrocketing cost of health insurance.  What are union attitudes toward these attempts?

3. Discuss the development and present status of right-to-work laws in America. In your answer show your understanding of these laws in relation to federal legislation. (see word document)

4. Why does subcontracting remain an area of large controversy in collective bargaining and what exactly have unions tried to do regarding it? (see subcontracting document 1&2)

This is from the Book: Labor Relations

Sloane, A. A., & Witney, F. (2010). Labor relations (13th edition) (13th ed.). Pearson


A second criterion involved in wage determination under collective bargaining is the ability of the employer (or industry, where negotiations are on an industry wide basis) to pay a wage increase. The negotiations is frequently shaped by this factor, and many strikes occur where there is disagreement between management and union negotiators relative to the wage capacity of the enterprise.

The level of profits is one indicator of the wage-paying ability of the organization involved during the negotiations. If a management is earning a “high” rate of profit, union representative will frequently claim that it can afford all or most of the union wage demand. If the employer is earning a “low” rate of profit, management negotiators will frequently argue that the place does not have the financial to meet the demands.

First It is not certain whether a given rate of profits earned by a company over a given time in the past will hold for the future. Meaning profits may fall or rise depending on the behavior of a number of economic variables that are themselves uncertain: Change in sales, output, productivity, price, managerial efficiency, and even the state of international relations will all have an influence.

Second the use of which an organization intends to put its profits also has a vital bearing on this problem. Because profits are frequently used to promote capital growth and improvement, the future plan of the enterprise itself must receive considerations by the negotiators (union).

Third, although the level of profits is an important factor in the determination of a firm’s ability to pay wages, it is not the only factor. Other considerations that have an important bearing are the ratio of labors costs to total costs, the amount of money expended of the financing of fringe benefits, and the degree of elasticity of demand for the firm’s product or service. The ratio of labor costs to total cost particulary conditions the ability of a firm to afford increase wages. An employee is in a better position to grant higher wages when the firm’s labor costs represent a comparatively small part of the total cost. Moreover, the ratio of labor cost to total cost cannot by itself be take as conclusive evidence of the wage-paying ability of a particular firm.

The ease with which a company can pass on the cost of a wage increase in the form of higher prices to other firms or to the consuming public is still another determinant of its wage paying ability. Negotiators at times take advantage of such an economic environment. Wage increase are agreed on, and the result is higher prices. From the publics’ point of view, it would be much more desirable if unions and employers could work out an arrangement whereby wages could be increased without price increase.


Health coverage as an economic supplement gradually spread over the last half-century for a variety of reasons. Group insurance allows purchasing economies unavailable to individuals. And the fact that the Social Security program has not provided protection for most risks covered by these insurance plans has made the private insurance system a widely sought one. (See photos for additional information)


Right-to-work laws, state laws that ban any kind of forces union membership within the borders of the state, obviously serve as formidable obstacles to union security arrangements in the primarily southern and western states in which they remain on the books. The labor movement in these states does not have much political muscle because union membership there is very low. On the other hand, not only has the effect of the right-to-work laws on labor relations in these stated been highly debatable, but twice in the post Taft-Hartley years, the U.S. Congress has come relatively close to repealing the relevant Taft-Hartley section permitting the enactment of such state laws (Section 14B). This action would nullify all right-to-work laws as far as these laws apply to interstate commerce, because of the federal preemption doctrine, which forbids states to pass laws in conflict with federal statute.


Sloane, A. A., & Witney, F. (2010). Labor relations (13th edition) (13th ed.). Pearson.