Labor Unions

Background

Although they’re most famous for bringing us the weekend, broadly speaking, labor unions help workers organize their labor efforts so they can negotiate as a single entity rather than individuals. Workers in a particular industry, trade, or company form labor unions to improve aspects of their working conditions, such as pay or benefits (more on the definition here).

In the US, labor unions are popular among transportation employees (such as the Teamsters), government employees, and other tradespeople like electrical workers.

How it Works

When workers decide they’d like to unionize, they can contact a union organizer at the union most relevant to them to get the ball rolling (learn more about how the process works). That union could be specific to their corporation, such as Starbucks Workers United, or their industry at large, such as the United Auto Workers.

Next, workers start signing “union cards,” typically anonymously, which ultimately let an employer know that their workers want a union. The cards state that employees want to bargain collectively with the company. The company can then voluntarily recognize the union. If they don’t, the employees can file for an election with the National Labor Relations Board.

During the election, the NLRB counts ballots and reports out results. This typically happens in person at the workplace, with NLRB representatives present.

Once the union is recognized through winning the election or voluntary recognition, workers start the “collective bargaining” process to negotiate with the employer about what they want (think: better pay or benefits). Then, a contract is drawn up to enforce those decisions.

History

The history of labor unions can be traced back to the 18th century in Europe when the Industrial Revolution brought a surge of newly managed workers into workplaces.

The first union in the US, however, was created in 1794. Cobblers in Philadelphia formed the Federal Society of Journeymen Cordwainers to protect their wages from those agreeing to work for lower pay.

But there was one problem: Labor union law hadn’t been established yet. Master shoemakers sued the union in 1806, and the court ruled in favor of the owners—leading the society to go bankrupt. From that point on, any union member could be charged with conspiracy until a case in 1842 ruled otherwise.

Antiunion actions from the US government continued in the decades that followed (see the Pullman Strike in 1894 and the Colorado Coalfield War in 1914).

It wasn’t until the Great Depression that unions received increased support from the federal government. Under President Franklin D. Roosevelt’s administration, the National Labor Relations Act was passed, granting workers the right to form unions and strike.

As of 2023, roughly 10% of US wage and salary workers were union members. That’s down from roughly 20% in 1983.

Pros and Cons

Critics of labor unions argue that unions not only make it more difficult to discipline low performers, but also drive up the cost of labor (union workers are estimated to cost companies roughly 10% to 15% more than nonunion employees). They also posit that unions can manufacture animosity between workers and management, particularly because the National Labor Relations Act prevents managers and supervisors from joining unions themselves.

Union advocates, however, believe unions are a great tool for increasing workers' pay and benefits. They also provide a robust structure for complaints and feedback (find more pros and cons here).