Unions and Suppliers: Considerations as Chicago's Teacher Strike Enters Second Week

The Teacher's Union strike enters its second week today, and Mayor Rahm Emanuel is mounting a legal challenge against it. As such, the Windy City is grabbing national headlines for its willingness to take on organized labor, despite the strong Democratic power base. Here at Spend Matters, we think we're entitled to an opinion over the issue, considering our office (and many of our employees) are based in Chicago and our taxes contribute material sums to the teacher's coffers. Yet we don't want to get partisan here. The more important issue is that what is at stake here is something far more than a challenge to Labor in a difficult economic climate. Rather, as we discussed in a previous essay on the topic, what the strike is really at stake is the broader topic of a government's ability to purchase outcomes rather than simply buying labor or widgets.

This point -- and the topics we addresses in more detail in the previously-linked examination -- raise a number of questions that companies (and governments) should be thinking about when working with vendors of all types today. Based on Labor's interest in taking on the City of Chicago in this case (and a generally Labor-friendly Mayor!), we have no doubt that we will see other challenges in the coming years. Moreover, given this resurgence of Labor will, we believe that those tasked with contributing to or making buying decisions for goods and services must consider a range of factors in evaluating suppliers, immediate and even those that may remain hidden or obscured in the contracting process. These factors should include:

  • The potential exposure to organized labor at any tier in the supply chain (such exposure should be evaluated in the same context as other supply risks) contributing to potential disruptions, quality or other issues based on either legal or illegal labor action (the City of Chicago is now arguing Labor's action in the teacher's strike is illegal -- should make for an interesting court decision this week)
  • Treating unions as suppliers held to KPIs, including the ability to buy outcomes from them rather than simply collective bargaining for wages (at its core, this is precisely what the Chicago strike is about)
  • Exposure to potential labor issues overseas, especially in lower cost manufacturing regions, which may or may not include organized labor as a driving factor in potential disruptions; labor watch groups may have a role in this regard as well and companies may wish to consider partnering with them rather than waiting to become adversaries

- Jason Busch

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