Also known as trade unions or labor organizations, labor unions are the representational bodies of groups of workers who band together in order to protect their interests and rights through collective bargaining.
Why unionize? Unions were initially created for defensive purposes. They aimed to protect workers from the power held by employers. Powers include sudden wage cuts, mass firings, adverse or dangerous working conditions and excessive over-time. Strong unions then go on the offensive, pushing for increased wages, better benefits & training as well as eventually political lobbying.
Most unions in the US are associated with one of two umbrella organisations: the AFL-CIO or the Change to Win Federation (which split from AFL-CIO in 2005).
A term first used by Beatrice Webb in 1891. It refers to the negotiation process between employers and a group of employees. This is ultimately what trade unions are for: maximizing the bargaining power of workers by pooling their individual power together and presenting a united front.
Employers negotiate with single unions or, as with larger companies, groups of unions. The scale depends largely on the sector/industry and on the country.
Why do private businesses dislike unions? This ultimately comes down to flexibility. Businesses feel the need to be able to grow and shrink according to demands for their product and the costs of raw resources. Unions prevent this flexibility by presenting a higher fixed cost for labour, which is usually one of the highest outgoing costs for a business.
Businesses lobby government for decreased interference in the labor market and decreased regulation in the economy. They want the government to be neutral or on their side in labour disputes. They also push for lower corporation tax seeing their growth as integral for economic growth.
On the other hand, unions push for increased economic regulation, increased support for workers' rights and increased taxation for businesses (especially from public sector unions).
Trade Union density
- Iceland: 85.5
- Finland: 69.0
- Sweden: 67.7
- Denmark: 66.8
- Belgium: 55.1
- Canada: 27.1
- UK: 25.8
- USA: 10.8
US Union History:
- Craft Guilds began forming in the early 1800s. Threatened by the industrialization of skilled jobs, these guilds aimed to prevent the loss of jobs to modern industry. As transport infrastructure developed, local groups began to group together on a regional and national level to remain effective.
- Early movements, primarily the Knights of Labor (KOR) failed due to weak leadership, no fixed goals and strong opposition by local and regional governments who were heavily influenced by local business.
- The AFL (American Federation of Labor) had a set strategy and focused on localized strikes and boycotts. The AFL benefited from centralized leadership and goals that moved away from the 'class struggles' of the 19th century and towards increasing pay, reducing hours and better working conditions.
- The Inter-War Period saw labor organisations benefit from New Deal policies such as the National Labor Relations Act (The Wagner Act, 1935). The NLRA secured workers' rights to organize, collectively bargain and to take collective action.
- The Post War Period saw union membership rise to 35% of the labor force by 1954, reaching a height of 21 million members in 1979. Despite increased membership, the overall power of unions was on the decline. See the Management Relations Act (Taft-Hartley Act, 1947).
- The power of labor unions declined in the 1970s and beyond as membership began to slip, factories started moving either abroad or to the south, where unions were relatively weaker. Government policies during the 1980s began to shift towards deregulation and free competition, further damaging the influence and power of labor organizations.
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