What Is a Labor Union?

A labor union, officially known as a “labor organization,” is an entity formed by workers in a particular trade, industry, or company for the purpose of improving pay, benefits, and working conditions. Also called a “trade union” or a “worker’s union,” a labor union selects representatives to negotiate with employers in a process known as collective bargaining. When successful, the bargaining results in an agreement that stipulates working conditions for a period of time. Labor unions may also advocate for legal, social, and political measures for the country as a whole.

Labor unions are often industry-specific and tend to be most common today among public sector (government) employees and those in manufacturing, mining, construction, and transportation. In 2019, 14.6 million U.S. wage and salary workers were members of unions. Union membership was five times more common among public than private sector workers.

Rises and falls in union membership have been linked to economic conditions. When there is full employment and rising wages, unions usually experience decline, particularly among younger workers. In times of recession, union membership becomes more attractive.

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

Unions have a democratic structure, holding elections to choose officers who are charged with making decisions beneficial to the members. Employees pay dues to the union and, in return, the labor union acts as an advocate on the employees’ behalf.

To form a union, a locally based group of employees obtains a charter from a national-level labor organization. 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. The CtW spun off from the AFL-CIO in 2005. 

Nearly all unions are structured and work in similar ways. U.S. law requires the employer 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 union’s bargaining unit—a group of members whose duty is to assure that its members are properly compensated and represented—and the employer. A collective bargaining agreement (CBA) is eventually 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 and management must negotiate and sign a new agreement.

Example of a Labor Union

The National Education Association (NEA) represents teachers and other education professionals and 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 and working conditions for its members, among other things.

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

History of Labor Unions

Refusal to admit Black people, women, and immigrant groups was common in labor unions in the 19th and early 20th century, and excluded groups formed their own unions. Today, labor union membership is very diverse, including more women and Black and Latinx people than ever before, though Asian workers are underrepresented.

The right to form unions was established in 1935 by the National Labor Relations Act, also known as the “Wagner Act.” It gave unionized employees the right to strike and bargain jointly for working conditions. The act encouraged collective bargaining, stopped unfair tactics by employers, and set up enforcement in a new dependent agency, the National Labor Relations Board.

In recent years legislation and court decisions have weakened the ability of unions to organize. Today right-to-work laws in 27 states prohibit contracts that require workers to join a labor union to get or keep a job. Public employees cannot be required to pay dues to a union to support its collective-bargaining activities on their behalf, according to a 2018 U.S. Supreme Court decision in Janus v. American Federation of State, County, and Municipal Employees.

Criticisms of Labor Unions

Some business owners, industry associations, and think tanks support right-to-work laws on the grounds that requiring union membership to obtain a job reduces competition in the free-market economy. Some labor union contracts, such as those of the teacher and police unions, have been criticized for making it too difficult to fire incompetent, abusive, and violent employees. For example, according to a 2019 study of 656 police union contracts across the country, 73% included an appeals process in which final decisions on firing and disciplining officers were in the hands of arbitrators selected in part by the local police union. The result, as reported in the New Yorker, is that many disciplinary actions and firings of abusive police officers have been overturned.

Some in the labor movement have called for the expulsion of police unions on the grounds that they protect violent officers. However, the AFL-CIO’s recently published recommendations on police reform said the best way to address police brutality was to engage police affiliates, not isolate them.

At times labor unions have been found complicit in organized criminal activity. Defrauding of union pension funds, for example, has resulted in recent arrests of New York subcontractors associated with the Teamsters union.

Political Role of Labor Unions

Labor unions have also played a significant political role endorsing candidates in local and national elections and representing their members’ interests in the safety issues of the day. For example, in the COVID-19 era, teachers unions have been taking vocal stands and threatening strikes on the issue of schools reopening. The unions have voiced reluctance to return to the classrooms, but they also have resisted full-day remote learning tools such as live video, presumably as a way to protect teacher jobs, according to the New York Times.

The Democratic Party expresses support for the labor movement in its platform and generally wins labor union endorsements. Some unions, such as law enforcement groups, support Republican candidates. In its 2016 platform, which has been readopted for 2020 intact, the Republican Party sees unions as a threat to freedom in the workplace and opposes legislation that makes it easier for unions to organize.