How Labor Unions Work

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

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.

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.