How Unionization Works
The process of unionization can be long and contentious because of the different interests of the workers, the union, and the employer. It is governed by federal law, and many states have additional laws that apply. Employers looking to avoid unionization must be careful not to break the law. When a group of workers is interested in forming a union, it can proceed by calling in a union organizer or by setting up its own organization. The group then creates an organizing committee to divide up the work. The committee will distribute union support cards. If at least 30% of the employees sign a support card, an election will be held. If the workers vote for the union, the union will negotiate on behalf of the workers for wages, benefits, and work conditions. Employers must negotiate in good faith under the law. Unions are more likely to form when employees are unhappy than when they are satisfied with their work conditions.The process can be difficult, and employers often dedicate considerable resources to keeping unions out of their workplaces. These can range from offering raises (which is fine) to firing workers (which is illegal). In the United States, the Bureau of Labor Statistics reports that in 2021, 10.3% of workers were represented by a union. Public-sector employees are most likely to be in unions, with 33.9% having union representation, compared to 6.1% of workers in the private sector. The median union member earns $1,169 per week, compared to $975 for the median non-union member. That wage difference explains much of the interest in unionization.
Pros and Cons of Unionization
Pros Explained
Increases worker pay, benefits, and satisfaction: A labor union will negotiate for better pay, benefits, and work rules, which can greatly improve an employee’s economic well-being and job satisfaction. Helps the employer become an employer of choice: Because people want to work for companies with good compensation and working conditions, having a union can make an employer the employer of choice, giving them an advantage in recruiting and retaining good workers. After all, who doesn’t want a job with good pay and good working conditions? Gives the employer one unit with which to negotiate: All negotiating issues and complaints go through the union, giving the employer one point of contact. This may simplify HR operations.
Cons Explained
Dues can be high: Workers pay dues to join a union, and some may find that the dues are high relative to the benefits, especially at entry level.Increased labor costs may lead to lower employment: Because union workers have higher pay and benefits, employers may choose to hire fewer workers to accommodate the cost.May increase animosity in the workplace: Dealing with the union can increase friction in a workplace, both between workers and employers, and among workers. For example, union policies are based on workplace seniority, which can lead to favoring a bad but long-term employee over a better worker who is a recent hire. If the company violates the law while trying to keep the union out, there are likely to be bad feelings all around.
Alternatives to Unionization
Some employers choose to improve pay, benefits, and working conditions to head off unionization, making it unnecessary. Unionization is difficult, so employees don’t do it unless they have problems in the workplace. Other businesses include employees in ownership to align the interests of workers and owners. Another alternative to unionization is professional certification. Certifications have the effect of raising wages and limiting the pool of employees without a union. Workers may be able to get some of the benefits of unionization through certifications, including higher wages and a trade association that can provide some advocacy. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
