What Is a Labor Union?

A labor union, also called a trade union or worker’s union, is an organization that represents the collective interests of employees. Labor unions help workers unite to negotiate with employers over wages, hours, benefits, and other working conditions. They are often industry-specific and tend to be more common in manufacturing, mining, construction, transportation, and the public sector. However, while beneficial to members, labor union representation in the United States has declined significantly in the private sector over time. Effective unions tend to help maintain traditional pensions. They are considered an aspect of social justice.

Key Takeaways

  • A labor union represents the collective interests of workers, bargaining with employers over such concerns as wages and working conditions.
  • Labor unions are specific to industries and work like a democracy.
  • Labor unions have local chapters, each of which obtains a charter from the national-level organization.

How a Labor Union Works

Labor unions protect the rights of workers in specific industries. A union works like a democracy, holding elections to appoint officers. The union officers are charged with the duty of making decisions beneficial for union participants. The structure of a union is as a locally based group of employees who obtain a charter from a national-level organization. Employees pay dues to the national union. In return, the labor union acts as an advocate on the employees’ behalf.

The National Labor Relations Act, also known as the Wagner Act, guarantees private sector employees the right to form labor unions. The act also gives unionized employees the right to strike and to bargain jointly for working conditions.

Two large organizations oversee most of the labor unions in the U.S.: the Change to Win Federation (CtW) and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). The AFL-CIO formed in 1955 after the two groups merged and has nearly 20 million members. The CtW spun off from the AFL-CIO in 2005.

Labor unions exist in many nations around the globe, including Sweden, Germany, France, and the United Kingdom. Many large unions will actively lobby legislators—on both a local and federal level—to achieve goals they see as beneficial to their membership.

Despite being a boon to workers, labor unions have seen membership decrease significantly since their heyday in the mid-20th century

A Labor Union Example

Nearly all unions are structured the same way and carry out duties in the same manner. The National Education Association (NEA) is a labor union of professionals that represents teachers and other education professionals in the workplace. The NEA is the largest labor union in the United States, with nearly three million members. The union’s aim is to advocate for education professionals and unite its members to fulfill the promise of public education.

The NEA works with local and state educational systems to set adequate wages for its members, among other things. When negotiating salaries on behalf of its teachers, the NEA starts with a bargaining unit. This unit is a group of members whose duty is to deal with a specific employer. The bargaining unit, as its name implies, works with an employer to negotiate and assure that its members are properly compensated and represented.

U.S. law requires the employer—in this case a school district—to actively bargain with the union in good faith. However, the employer is not required to agree to any specific terms. Multiple negotiation rounds are conducted between the bargaining party and the employer, after which a collective bargaining agreement (CBA) is agreed upon and signed. The CBA outlines pay scales and includes other terms of employment, such as vacation and sick days, benefits, working hours, and working conditions.

After signing the CBA, an employer cannot change the agreement without a union representative’s approval. However, CBAs eventually expire, at which time the labor union must negotiate, and both parties must sign a new agreement.