Union representation for all or part of a bank's work force does not necessarily translate into higher salaries or expenses, according to a analysis of per-employee costs at several unionized banks.
Instead, salary expenses are more likely to be determined by traditional cost-of-living needs in the area, regardless of union presence. The salaries might even be lower than at nonunionized banks, according to data from Sheshunoff Information Services.
"The unknown frightens people," said Orlando B. Hanselman, president of Pennsylvania's United States National Bank in Johnstown. "Banks our size and smaller are irrationally afraid of unionized banks, We have a working model here that shows that that fear is completely unfounded."
And the presence of a union, rather than hindering management's cost- cutting efforts and requiring high salaries, can actually bring new business to a bank, bank officials say.
Hudson United Bank, a subsidiary of Mahwah, N.J.-based Hubco, and Amalgamated Bank in Chicago reported paying higher salary and benefits per employee than other banks of similar size and geographic location.
Both are located in urban industrial areas, where the cost-of-living is high, and Hubco has needed a larger staff for its 14 acquisitions in the last five years.
By contrast, though, Trust Company of New Jersey in urban Jersey City has lower employee expenses than its peers despite being unionized.
And U.S. National, which serves a five-county rural area around Johnstown, also pays less than its peers, but more of its expenses are devoted to salaries because it needs a large staff to maintain its extensive branch network.
"You cannot draw a conclusion that unionization will control or cause excessive personnel expenses," said Jon Doukas, vice president of Professional Bank Services in Louisville, Ky.
In fact, the presence of unions has helped the trust departments at both Hubco and U.S. National.
Affiliated unions in trade industries, including plumbing, construction, and carpentry, have placed at least $35 million in assets under the Pennsylvania bank's management.
And since it began actively seeking union funds two years ago, Hubco has brought in a total of $21 million in assets under management from five different unions.
