How Does a Union Work?

What is a Labor Union?

A labor union, also commonly called a trade union, is an organization that works to advance the needs and desires of workers across various industry sectors. Labor unions traditionally represent workers in heavy manual labor jobs such as manufacturing and construction. Typically, an employer must recognize the union or employees must vote to organize through a majority vote before any one employee can join a union. Because the manufacturing and heavy labor sectors have been shrinking in recent decades thanks to outsourcing and a focus on technology and service jobs, the amount of unionized workers has declined substantially.

Operation of a Labor Union

When a company where a union represents the workforce hires an employee, the union often requires the employee to join. Often, the union requires a moderate one-time fee to join, and continued membership requires periodic payments known as union dues. Workers usually elect representatives to communicate with the union heads. Workers at each company have periodic union meetings, and the union itself has meetings where representatives from all affiliated companies meet to discuss their issues. The union then works with the companies that employ its members to raise wages, benefits, and otherwise look after its members.

Effects of a Labor Union

The purpose of a labor union is to give bargaining power to workers through collective action. This is known as collective bargaining. Historically, workers had little power to negotiate better work conditions, wages or benefits with their employers and became something of indentured servants. The labor union movement tipped the scales in the other direction. Now, many union workers enjoy higher wages and better benefits than non-union workers. In some cases, their pay and benefits can become a burden on the competitiveness of their companies. Other work rules, such as protections against being fired, that unions have won through negotiation can affect productivity. In short, unions are usually good for employees, but offer a mixture of benefits and drawbacks to employers.