Organized labor is an association of workers united as a single, representative entity to improve the workers' economic status and working conditions through collective bargaining with employers. Organized labor groups are also known as "unions." There are two types: the horizontal union, in which all members share a common skill, and the vertical union, composed of workers from across the same industry.

Breaking down Organized Labor

The union formation process in most countries is regulated by a government agency, such as the National Labor Relations Board in the United States. The group of employees wanting to form a union usually need a set amount of signatures; this amount is dependent on the jurisdiction it wants to form in. If enough signatures are obtained, there is a vote by all employees, and if passed, the union will negotiate on their behalf with the employers.

Changes Organized Labor Brought to the Workplace

Organized labor in the United States grew after the country entered the Industrial Age. The emergence of factories led to strenuous working conditions in many cases. The lack of heavily enforced standards on work hours, employee compensation, and medical coverage left many workers vulnerable.

It was not uncommon in the early days of industrialization for workers to be on the job six days of the week and put in longer than eight-hour workdays. Their salaries did not always match the effort and risks they endured on the job. If a worker was injured on an assembly line, the company might fire them if they were not able to continue working. Likewise, women who became pregnant might be fired and left without salaries or health coverage. Children as young as 8 years old might be employed in factories for long hours that could force them to skip school.

The formation of organized labor unions was one of the steps that established standards for acceptable working conditions.

Arguments made against organized labor include the extra costs that companies say they face to meet the demands of these groups. Some companies claim union demands for expensive insurance coverage, higher wages and promises for regular future raises, and other benefits eat into profits make businesses less competitive.

Retailers and supermarkets typically have employees who belong to organized labor groups. Big box discount retailer Walmart traditionally discourages its employees from forming organized labor groups, a maneuver which saves the company money. That savings contributes to the lower prices Walmart offers its customers.

Other retailers may feel compelled by Walmart’s example to renegotiate terms with the chapters of organized labor that represent their workers. The contention the retailers often present is that they will be forced to cut salaries or eliminate jobs to remain competitive with Walmart (referred to as the "Walmart effect") if the unions do not renegotiate.