Organized Labor

What is organized labor?

Organized labor refers to workers banding together—typically through unions—to engage in collective bargaining with employers for higher wages, better benefits, safer working conditions, and greater job security. Unions negotiate on behalf of members and can also lobby for broader labor-law reforms.

How organized labor works

• Workers indicate support for union representation, often by signing union authorization cards.
• After sufficient support, employees can hold a union election. If a majority of non-management workers vote in favor, the union becomes the exclusive bargaining representative for that bargaining unit.
• The union negotiates a collective bargaining agreement covering wages, hours, benefits, workplace rules, and grievance procedures.
• There are different union structures:
• Horizontal unions: organize workers who share a common trade or skill.
• Vertical unions: include workers across a single industry or multiple occupations.
• In many countries, government agencies oversee union formation and elections (for example, the National Labor Relations Board in the United States).
• Employers are prohibited by federal law from retaliating against employees for participating in protected union activities.

Brief history

Organized labor emerged during the Industrial Revolution in response to long hours, hazardous conditions, child labor, and minimal legal protections. Early unions often represented skilled workers; later efforts aimed to organize broader segments of the workforce.

Key milestones:
* Late 19th and early 20th centuries: formation of national labor federations and trade unions.
* 1935: The Wagner Act (National Labor Relations Act) established the legal right to organize and engage in collective bargaining.
* Mid-20th century: union membership grew significantly and helped expand the middle class.
* 1981: The federal firing of striking air traffic controllers marked a turning point, signaling a tougher government stance on some strikes.

Current and recent context:
* The National Education Association is the largest U.S. union, with nearly three million members.
* In 2021 the United States had about 14 million unionized workers, roughly 10.3% of the workforce.

Advantages of organized labor

• Higher wages and better benefits for union members compared with nonunion counterparts.
• Improved workplace safety and standardized hours (e.g., eight-hour day, paid weekends).
• Collective bargaining can raise standards across an industry, benefiting nonmembers as well.
• Unions provide grievance procedures and representation in disputes with employers.
• Political and legislative advocacy for labor-friendly laws and protections.

Disadvantages and challenges

• Higher labor costs for employers can lead to higher prices for consumers, reduced competitiveness, or pressure to automate or relocate jobs.
• Rigid contract terms can limit managerial flexibility and slow company responses to market changes.
• Some unions have been criticized for protecting underperforming employees or fostering adversarial labor relations.
• Employers sometimes spend substantial resources to discourage unionization (notable examples include large firms that have actively resisted organizing campaigns).
• Globalization and the ability to outsource work have weakened bargaining power in some sectors.

Why organized labor declined in recent decades

Several factors contributed to the decline of union density in many countries:
* Policy shifts and enforcement actions that made some strikes riskier or less effective.
* Globalization and trade that enabled companies to move production to lower-cost countries.
* Structural changes in the economy: growth in service and gig-sector jobs that are harder to organize than traditional manufacturing.
* Legal and political environments in some places that favor employer resistance to unionization.

The role and purpose of organized labor

The primary purpose of organized labor is to strengthen workers’ collective economic and bargaining power to secure better pay, benefits, working conditions, and job protections. Unions also play a role in shaping labor policy and promoting broader social and economic reforms that affect workers.

Bottom line

Organized labor has historically driven major improvements in wages, working hours, benefits, and workplace safety. While union influence has declined in many regions due to economic, political, and structural changes, unions remain a central mechanism through which workers can negotiate collectively and advocate for labor-friendly policies.