How Labor Unions Work

Corporation Image Gallery The Pinkerton Detective Agency acted as a private police force for many powerful corporations and robber barons. See more corporation pictures.
Photo used in the public domain

Labor unions have a long and colorful history in the United States. To some people, they conjure up thoughts of organized crime and gangsters like Jimmy Hoffa. To others, labor unions represent solidarity among the working classes, bringing people together across many professions to lobby for better rights, wages and benefits. As of 2006, 15.4 million people were union members, and although union membership peaked in 1945 when 35 percent of the nonagricultural workforce were union members, unions are still a powerful influence in the United States (and even more powerful in many other countries). They are also an important and fundamental part of the history of United States commerce and the country’s growth into an economic powerhouse.

So what do unions do and why are they still important? In this article, we’ll look at the history of labor unions and how they help many workers today.


Important Events in U.S. Labor History

In the 19th century, the Industrial Revolution produced a rapid expansion in factories and manufacturing capabilities. As workers moved away from agricultural work to factories, mines and other hard labor, many faced terrible working conditions: long hours, low pay and health risks. Many children worked in factories, and women and children generally received lower pay than men. The government did little to limit these injustices, and in the United States, along with much of the industrialized world, labor movements developed that lobbied for better rights and safer conditions.

A common method of protest used by workers in the 19th century was the strike. A strike is when a group of workers stops working in protest to labor conditions or as a bargaining tool during negotiations between labor and management. While strikes today are generally peaceful events, back then they were quite the opposite. A list of the 19th century’s notable strikes shows numerous strikes that were “broken” by hired militias, police or U.S. government troops, frequently resulting in the deaths of workers. Employers often hired private companies like the infamous Pinkerton Detective Agency to intimidate striking workers or to escort strike breakers -- workers replacing striking employees -- across picket lines.


The Haymarket Riot

The Haymarket Riot was a watershed moment in the American labor movement and has been frequently memorialized through art.
Image used in the public domain

One of the most infamous and tragic events of this period was the Haymarket Riot. On May 1, 1886, a nationwide strike began that called for an 8-hour workday. Three days later a rally was held in Chicago’s Haymarket, protesting the violent police response to a strike by workers at McCormick Reaper Works the previous day. Because of poor weather, only a few hundred people attended the rally, mostly anarchists and socialists.

When police moved in to disperse the crowd, someone threw a bomb that detonated in the mob. Chaos followed: the police fired shots; some workers may have as well. No official tally of civilian casualties exists, though it’s believed that several died and many were wounded. Seven police officers died and 60 were injured, many by bullets from their fellow officers.


The bomb thrower was never identified, but many anarchists and socialists were arrested. Eight were charged and convicted for “inflammatory speeches and publications” that allegedly caused the deadly violence [ref]. Despite numerous pleas from labor leaders and other activists, four of the convicted were hanged on November 1, 1887. Another committed suicide in prison by placing a stick of dynamite in his mouth. On June 26, 1893, the new Illinois governor John P. Altgeld granted a full pardon to the remaining three convicted men. The event inspired labor leaders to push for May 1 to be an international celebration of workers. Labor Day, known as May Day in some countries, is celebrated throughout the world on May 1. In the United States, Labor Day is celebrated on the first Monday in September, dedicated to “the social and economic achievements of American workers” [ref].

Besides representing a reaction against the ills of industrialization, labor unions also trace their history back to the merchant and craft guilds of medieval Europe. In these guilds, workers would come together to share expertise, support charities, form rules for trade and commerce and lobby local governments. Some guilds and crafts unions made their way to America. In 1886, legendary labor leader Samuel Gompers brought together cigar makers and various craft unions to form the American Federation of Labor (AFL), one of the first major unions in the United States. Almost 70 years later, the AFL merged with the Congress of Industrial Organizations to form the AFL-CIO, an organization that still exists today.


Labor Union Basics

Labor unions exist for a wide variety of professions, representing everyone from construction workers to doctors.

­ A labor union is an organization of workers dedicated to protecting their interests and improving wages, hours and working conditions. Many different types of workers belong to unions: mechanics, teachers, factory workers, actors, police officers, airline pilots, janitors, doctors, writers and so forth. To form a bargaining unit -- a group who will be represented by a union in dealing with their employer -- a group of workers must be voluntarily recognized by their employer, or a majority of workers in a bargaining unit must vote for representation.

In general, it is legal for employers to try to persuade employees not to unionize. However, it is illegal for a company to attempt to prevent employees from unionizing by promises of violence, threats or other coercive action. It is also illegal for unions to use lies or threats of violence to intimidate employees into joining a union.


An employer is required by law to bargain in good faith with a union, although an employer is not required to agree to any particular terms. Once an agreement is reached through negotiations, a collective bargaining agreement (CBA) is signed. A CBA is a negotiated agreement between a labor union and an employer that sets terms of employment for members of that union and provisions for wages, hours, conditions, vacation, sick days, benefits, etc. After a CBA is signed, an employer can’t change anything detailed in the agreement without the union representative’s approval. The CBA lasts for a set period of time, and the union monitors the employer to make sure the employer abides by the contract. If a union believes an employer has breached the CBA, the union can file a grievance, which may be ultimately resolved through a process known as arbitration.

Union members pay dues to cover the union’s costs. Most unions have paid, full-time staff that helps to manage its operations. While the staff is paid by union dues, members sometimes volunteer with the union. Some unions also create strikes funds that support workers in the event of a strike. Dues vary but many are around $50 a month.

Labor unions are an important constituency for elected officials. Here Congressman Dennis Moore (D-Kansas) meets with members of the Service Employees International Union.
Photo courtesy Offices of Congressman Dennis More

A union works somewhat like a democracy. Unions hold elections to determine officers who will make decisions and represent the members. There are many laws governing union elections, which we’ll discuss later in the article.

A locally based group of workers who have a charter from a national or international union is known as a union local. The union local might be made up of workers from the same company or region. They may also be workers from the same business sector, employed by different companies.

The AFL-CIO, one of the most powerful labor federations in the United States, traces its origins back more than 120 years.
Photo courtesy Tooele Army Depot - Union Office

Benefits of Union Membership

Union members have the benefit of negotiating with their employer as a group. This basic right gives them much more power than if they were to negotiate individually. On average, union employees make 27 percent more than nonunion workers. Ninety-two percent of union workers have job-related health coverage versus 68 percent for nonunion workers. Union workers also have a great advantage over nonunion workers in securing guaranteed pensions.

Through their CBAs and the grievance and arbitration processes, unions help to protect their employees from unjust dismissal. Therefore, most union employees cannot be fired without “just cause,” unlike many nonunion employees who are considered “at-will” employees and can be fired at any time and for almost any reason.

Another powerful union tool is the strike. As we mentioned earlier, a strike is when a group of workers stops working in protest to labor conditions or as a bargaining tool during negotiations between labor and management. There is significant debate about whether or not strikes are effective, but there may be circumstances where a strike is a necessary last resort for a union.


Labor Union Laws

In 1935, Congress passed the National Labor Relations Act (NLRA) to “encourage a healthy relationship between private-sector workers and their employers” [ref]. Prior to the NLRA, employers were not required by law to recognize a union or to bargain in good faith. By establishing employees’ basic rights to join unions and engage in collective bargaining, Congress hoped to reduce work stoppages, strikes and other conflicts between labor and management that had all too often resulted in violence. The act also created the National Labor Relations Board (NLRB) as the organization to enforce the NLRA.

The NLRA accomplished three significant objectives:


  1. Allowed workers to have elections to decide if they want to be represented
  2. Established laws protecting employees from discrimination based on union- or group-related activity
  3. Created the NLRB as an administrative organization to enforce the law

Perhaps most importantly, the NLRA allowed unions to represent employees under the law. The act’s text states that it covers employees whose employers are involved in interstate commerce, but this is a broad definition, one that is easily applied. The act also outlined the basic rights for workers, something many had been lobbying about for decades. In addition to the right to union representation and participation, the NLRA allowed employees to engage in collective bargaining and protected concerted activities -- with or without a union -- that attempt to improve working conditions. The NLRA also granted employees the right to choose not not to take part in any of those activities, hopefully preventing unions or employers from exerting undue pressure on employees.

Some workers are specifically excluded from the protections of the NLRA:

  • Agricultural laborers
  • Domestic service workers
  • People employed by a parent or spouse
  • Independent contractors
  • Supervisors (supervisors who have been discriminated against for refusing to violate the NLRA may be covered)
  • Railroad and airline employees
  • Federal, state and local government employees
  • Employees of any entity that does not fit the NLRA’s definition of an employer
  • Confidential employees


The Taft-Hartley Labor Act

The LMRA allowed the federal government to exert more control over strikes in order to prevent disruptions to businesses vital to national health or safety. It also outlawed the practice of secondary boycotts.
Photo courtesy John Vachon/Library of Congress Prints and Photographs Division

A significant number of strikes and increasing union power led Congress to pass the Labor Management Relations Act (LMRA) in 1947. Also known as the Taft-Hartley Labor Act, the LMRA amended parts of the NLRA. In order to stem the number of strikes, the LMRA enlarged the National Labor Relations Board, firmly establishing its control over labor disputes. It also authorized the government to get an 80-day injunction against any strike thought to be a danger to public health or security and outlawed union contributions to political campaigns.

Significantly, the LMRA outlawed secondary boycotts. Secondary boycotts were a measure used in lieu of or in addition to a traditional strike. A union would set up a picket line at a company -- one with which the union did not have a labor dispute -- to pressure it to not do business with another company that was involved in a labor dispute with the union. For example, if brewery workers had a problem with their employer, they might set up a secondary boycott of the glass company that supplied bottles to their brewery, thereby putting pressure on the brewery by protesting against its supplier.


Labor Management Reporting and Disclosure Act of 1959

As you can see, the mid-twentieth century was an important -- and busy -- time for labor legislation. The Labor Management Reporting and Disclosure Act (LMRDA) established a "Bill of Rights" for union members. The act was also passed because of a concern about union involvement in organized crime, a lack of transparency in union activities and a lack of democracy within unions. The LMRDA’s provisions include freedom of speech and assembly, protection from undeserved punishment, a vote in determing dues and fees, and the right to file suit and to participate in union activities.

Other clauses of the law include:

  • Requirements for reporting and disclosure by employers, labor relations consultants, union officers and employees and surety companies when engaging in certain activities
  • Rules for establishing and maintaining trusteeships
  • Safeguards for protecting union funds
  • Standards for conducting fair elections of union officers:

As we said before, one of the main goals of the LMRDA was to increase the level of democracy within unions. The law's changes to how unions run officer elections were intended to increase participation, communication and transparency. According to the LMRDA, all union members have to be notified by mail at least 15 days before every election. Candidates are allowed to examine a union's membership list -- but only once -- within 30 days of the election. Union and employer funds cannnot be used to promote any candidates. Actual elections must be held at least every three years. Voting is done by secret ballot and election observors must be permitted to monitor the proceedings.


Labor Unions Today

Like his father James R. "Jimmy" Hoffa, who joined the Teamsters as a young man, James P. Hoffa has been a member of the Teamsters for decades, now serving as the union's president.
Photo used in public domain

The country’s most prominent union, the AFL-CIO, is actually a labor federation made up of 54 member unions with more than 10 million members. Change to Win, which was formed in September 2005, is another major labor federation. It encompasses seven unions and 6 million workers. Other prominent unions include the United Auto Workers, the Service Employees International Union and the International Brotherhood of Teamsters. The Teamsters are especially famous for their one-time leader Jimmy Hoffa, whose son is now the union’s president.

While labor unions are not as prominent today as they once were, they still play a vital role in protecting and representing America’s workforce. Sweatshop conditions, at one time thought to be banished from the U.S., have seen a resurgence in recent years [ref]. Poor immigrant workers have been frequent victims of sweatshops. So unions, labor groups and social activists have responded by mobilizing awareness campaigns, lobbying the government for action and talking to clothing companies about whom they contract with [ref].


In addition to monitoring and reporting exploitative working conditions, unions are also important in allowing employees to effectively bargain for their wages and to provide a support system for an employee should he or she suffer from any discrimination at work. Unions provide a check against employers who attempt to encroach upon the rights of workers.

For more information on labor unions and other related topics, please check out the links on the next page.


Lots More Information

Related Articles

More Great Links

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