Labor Unions

What Is A Labor Union?

A labor union is an association of workers authorized to negotiate with business owners for better wages, more favorable work schedules, safer working conditions, and other employment conditions.

There are multiple types of labor unions. Craft unions are composed of skilled trade workers, like plumbers, electricians, and construction workers. Professional unions represent workers with college degrees, such as teachers or government employees. There are also industrial unions, which represent a wide range of workers in a specific industry. An industrial union may represent assembly line, skilled, and unskilled workers in a single industry, such as automobile manufacturers.

Under current law, unions are created by a vote of the workers at a particular business. These organizational efforts often involve support from a national union. Business owners cannot prevent a union from forming or punish workers for organizing a vote or joining a union. Once a union is formed, it can collect dues from workers and start bargaining with the business’s owners.

Why do businesses bargain with labor unions? One main reason is that unions can order a strike against a business, where workers refuse to do their jobs. Strikes can also be called for a set time, such as a day or even an hour. A union can also ask workers to stay at work but follow the exact language of policies or work rules, which is often as disruptive as a formal strike. During a strike, businesses can attempt to operate with management taking on worker tasks or even try to hire other workers. Even so, strikes are usually very disruptive and costly for businesses and the customers they serve. Strikes are also costly for workers, who are not paid as long as they are on strike, although some unions provide members with payments that make up for some of their lost salaries.

How Many Americans Belong To A Union? Where Do They Work?

In 2022, 10.1% of American workers belonged to a union. This figure shows that union membership has been on the decline for more than 50 years.

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The next figure shows the economic sectors with a high percentage of union workers. Union membership is particularly high among government employees (civilians) and the education sector. It is low in the retail and agriculture sectors.

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Why Has Union Membership Declined?

Union membership peaked in the early 1950s when almost one-third of private sector employees were union members. The decline in union membership is primarily due to two factors. The first is the decline of industries with a high percentage of union members. The auto industry, for example, which is highly unionized, employs far fewer people than it did in the 1950s. Many emerging industries, particularly high-tech companies, have very low union membership rates.

The second factor behind the decline of union membership is the increase in states with so-called Right to Work laws. These laws allow employees to work at a company with an established union without paying union dues. (The opposite is called a Union Shop, where workers must pay union dues to work at a business with an established union.) The figure below shows the variation in these laws across states as of 2023.

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Generally, union membership rates are much lower in Right-to-Work states. About 6 percent of workers in Right-to-Work states are union members, compared to over 13 percent in Union Shop states, and there are fewer companies where unions represent workers.

What Difference Do Unions Make?

Unions can make a big difference. Union representation likely correlates to an increase in wages: 2023 data from the Bureau of Labor Statistics shows that the average median weekly earnings of a full-time salaried union worker is $1216, whereas the median nonunion worker earns $1029. While this comparison looks at wage differences between jobs, more sophisticated analyses that account for these factors found that union bargaining increases wages and fringe benefits.

Labor unions are not always beneficial for workers. Some unions have refused to negotiate on wages and working conditions, even for corporations that must restructure in the face of economic hard times. Others have bargained for agreements that preserve high salaries for existing workers by accepting lower wages for new hires. Some union leaders have spent member dues on high salaries and benefits for themselves. And many companies offer generous wage and benefit packages even though workers are not unionized.  

The Take-Away

Many advocates for Right to Work laws cite cases of union corruption and inefficiency to argue that no one should be forced to join a union. At the same time, there is clear evidence that union representation can benefit workers. The question is, which of these outcomes do you consider more important? How the reader thinks about this question will determine whether they favor or oppose labor unions and how they view the decline in union membership.