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Labor Unions

Labor unions bargain with employers to improve employee pay, benefits, and working conditions as well as conduct legislative lobbying. However, unions are often criticized for blocking corporate innovation and forcing workers to pay membership dues regardless of whether they agree with the union’s bargaining strategy, and, in some cases, what a union’s legislative lobbying may entail. Why do unions exist, and what difference do they make for workers and employers?

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.

Source: Congressional Research Service (2023)

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. 

Bureau of Labor Statistics (2023)

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.

Source: National Council of State Legislators (2024)

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.

 

Further Reading

U.S. Department of Labor. (n.d.). Unions 101. Working Organizing Resource and Knowledge Center. http://tinyurl.com/4u4nb9yk, accessed 12/14/23.

National Conference of State Legislatures (2024) Right to Work Resources. https://www.ncsl.org/labor-and-employment/right-to-work-resources, accessed 5/29/24.

Callaci, B. (2023). Labor Unions and the Problem of Monopoly: Collective Bargaining and Market Governance, 1890 to the Present. Politics & Society, 51(3), 387-408.

 

Sources

What Is A Labor Union?

U.S. Department of Labor. (n.d.). Unions 101. Working Organizing Resource and Knowledge Center. http://tinyurl.com/4u4nb9yk, accessed 12/14/23

L. Mackenzie King. (1897). Trade-Union Organization in the United States. Journal of Political Economy, 5(2), 201–215. http://www.jstor.org/stable/1817788, accessed 12/14/23.

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

U.S. Bureau of Labor Statistics. (2023). Union Members Summary, Union Members 2022, Table 3. http://tinyurl.com/3hsjmcu5, accessed 2/6/24. (Chart Data).

Romero, P. & Wittaker, J. 2023. A Brief Examination of Union Membership Data, Congressional Research Service, https://tinyurl.com/569ce5vh, accessed 5/29/24 (Chart Data)

Why Has Union Membership Declined?

National Conference of State Legislatures (2024) Right to Work Resources. https://www.ncsl.org/labor-and-employment/right-to-work-resources, accessed 5/29/24 (Chart Data).

Dasgupta, K & Merchant, Z. 2023. Understanding Workers’ Financial Wellbeing in States with Right-to-Work Laws. FEDS Notes. https://tinyurl.com/3pewsv3b, accessed 5/29/24

What Difference Do Unions Make?

Cates, S. V. (2014). The young and the restless: why don’t millennials join unions? International Journal of Business & Public Administration, 11(2).

Smith, C., Duxbury, L., & Halinski, M. (2019). It is not just about paying your dues: Impact of generational cohort on active and passive union participation. Human Resource Management Journal, 29(3), 371-394.

Callaci, B. (2023). Labor Unions and the Problem of Monopoly: Collective Bargaining and Market Governance, 1890 to the Present. Politics & Society, 51(3), 387-408.

Knepper, M. (2020). From the fringe to the fore: Labor unions and employee compensation. Review of Economics and Statistics, 102(1), 98-112. 

U.S. Bureau of Labor Statistics. (2023). Union Members Summary, Union Members 2022. http://tinyurl.com/3hsjmcu5, accessed 12/14/23.

 

Contributors

Mary Stafford (Intern) received her degree in Public Policy Analysis from Indiana University in May 2024 and is attending law school.

Zul Norin (Intern) received her degree in Economics from Vanderbilt University in May 2024.

Griffin Reid (Team Lead) is a graduate student in the Department of Political Science at Indiana University and holds a Masters in Political Science from Indiana University – Indianapolis. Her research is in American politics, legislative institutions, and electoral behavior. He is currently Press Secretary for the Indiana Republican Party.

Dr. William Bianco (Research Director) received his PhD in Political Science from the University of Rochester. He is Professor of Political Science and Director of the Indiana Political Analytics Workshop at Indiana University. His current research is on representation, political identities, and the politics of scientific research.

Dr. Nick Clark (Content Lead) is Professor of Political Science at Susquehanna University, where he is also Department Head in Political Science and Director of the Public Policy Program and the Innovation Center. He received his Ph.D. from Indiana University and researches political institutions, European politics, and the politics of economic policy.

 

Publication Log

Published 6/25/24



 

 

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