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How Labor Unions Work

Oct 28, 2013
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How Labor Unions Work
by Jacob Silverman

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

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. 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”.

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

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.

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.

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 Unions Today

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.

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.

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