A trade union or labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages, hours, and working conditions, forming a cartel of labor. The trade union, through its leadership, bargains with the employer on behalf of union members (rank and file members) and negotiates labor contracts with employers. This may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies. The agreements negotiated by the union leaders are binding on the rank and file members and the employer and in some cases on other non-member workers.
These organizations may comprise individual workers, professionals, past workers, or the unemployed. The most common, but by no means only, purpose of these organizations is "maintaining or improving the conditions of their employment"
Over the last three hundred years, many trade unions have developed into a number of forms, influenced by differing political and economic regimes. The immediate objectives and activities of trade unions vary, but may include:
The traces of trade unions' existence could be traced from the eighteenth century, The rapid expansion of industrial society was to draw women, children, rural workers, and immigrants to the work force in larger numbers and in new roles. This pool of unskilled and semi-skilled labor spontaneously organized in fits and starts throughout its beginnings, and would later be an important arena for the development of trade unions.
Yet historian R.A. Leeson, in United we Stand (1971), said:
Recent historical research by Bob James in Craft, Trade or Mystery (2001) puts forward the view that trade unions are part of a broader movement of benefit societies, which includes medieval guilds, Freemasons, Oddfellows, friendly societies, and other fraternal organizations.
As Smith noted, unions were illegal for many years in most countries (and Smith argued that schemes to fix wages or prices, by employees or employers, should be). There were severe penalties for attempting to organize unions, up to and including execution. Despite this, unions were formed and began to acquire political power, eventually resulting in a body of labor law that not only legalized organizing efforts, but codified the relationship between employers and those employees organized into unions. Even after the legitimization of trade unions there was opposition, as the case of the Tolpuddle Martyrs shows.
The right to join a trade union is mentioned in article 23, subsection 4 of the Universal Declaration of Human Rights (UDHR), which also states in article 20, subsection 2 that "No one may be compelled to belong to an association". Prohibiting a person from joining or forming a union, as well as forcing a person to do the same (e.g. "closed shops" or "union shops", see below), whether by a government or by a business, is generally considered a human rights abuse. Similar allegations can be leveled if an employer discriminates based on trade union membership. Attempts by an employer, often with the help of outside agencies, to prevent union membership amongst their staff is known as union busting.v
The Knights of Labor was founded in the United States in 1869. Eventually over 700,000 workers joined the Knights. They opposed child labor and demanded the eight-hour day. They hoped their union would give workers “a proper share of the wealth they create,” more free time, and generally more benefits of society. They also tried to set up companies owned by the workers themselves. Although the Knights were against strikes, some radical members went on strike anyway when the railroads cut wages in 1884. After they won the fight, membership in the Knights boomed to 700,000, but then, at the time of the Haymarket Massacre, a fearful public opinion grouped them with anarchists and Communists, and membership then rapidly declined.
The American Federation of Labor (AFL) was founded by Samuel Gompers. By 1904, AFL-affiliated unions had a membership of over 1.4 million nationwide. Under Gompers's leadership, the AFL advocated an approach known as "business" or "pure and simple" unionism, which emphasized collective bargaining to reach its goals. Demands were centered around improvements to the immediate work environment, like better wages, hours and working conditions.
In France, Germany, and other European countries, socialist parties and democrats played a prominent role in forming and building up trade unions, especially from the 1870s onwards. This stood in contrast to the British experience, where moderate New Model Unions dominated the union movement from the mid-nineteenth century and where trade unionism was stronger than the political labor movement until the formation and growth of the Labour Party in the early years of the twentieth century.
Proponents often credit trade unions with leading the labor movement in the early 20th century, which generally sought to end child labor practices, improve worker safety, increase wages for both union workers, raise the entire society's standard of living, reduce the hours in a work week, provide public education for children, and bring of other benefits to working class families. According to Ludwig von Mises belief that unions are responsible for higher standard of living is a misconception. The height of wages depend on the marginal productivity of labor, which means that, other things being equal, the more capital is invested the higher wages climb. The increase in the amount of capital invested is achieved by removing obstacles in the way of saving and capital accumulation and by letting market to set wage rates. If wages are affected by union pressure and set above market clearing rate, lasting unemployment is created.
Advocates of unions claim that the higher wages that unions bring come at the expense of profits. However, as Milton Friedman pointed out, profits aren't high enough. 80% of national income is wages, and only about 6% is profits after tax, providing very little room for higher wages, even if profits could be totally used up. Moreover, profits are invested leading to an increase in capital: which raises the value of labor, increasing wages. If profits were totally removed, this source of wage increase would be removed.
The effect of union activities to influence pricing is potentially very harmful, making the market system ineffective. By raising the price of labor, above the market rate deadweight loss is created. Additional non-monetary benefits exacerbate the problem.
There can be little doubt that union activities lead to continuous and progressive inflation.
If unions succeed in wage hikes, and employers raise the prices they charge consumers to maintain their own profit margins, and the supply of money remains the same, then something else has to "give." Either the prices of goods and services in nonunion sectors have to fall and offset the union sector hikes, or people's cash balances need to fall, in terms of their purchasing power.
Unions may organize a particular section of skilled workers (craft unionism), a cross-section of workers from various trades (general unionism), or attempt to organize all workers within a particular industry (industrial unionism). These unions are often divided into "locals", and united in national federations. These federations themselves will affiliate with Internationals, such as the International Trade Union Confederation.
In many countries, a union may acquire the status of a "juristic person" (an artificial legal entity), with a mandate to negotiate with employers for the workers it represents. In such cases, unions have certain legal rights, most importantly the right to engage in collective bargaining with the employer (or employers) over wages, working hours, and other terms and conditions of employment. The inability of the parties to reach an agreement may lead to industrial action, culminating in either strike action or management lockout, or binding arbitration. In extreme cases, violent or illegal activities may develop around these events.
In other circumstances, unions may not have the legal right to represent workers, or the right may be in question. This lack of status can range from non-recognition of a union to political or criminal prosecution of union activists and members, with many cases of violence and deaths having been recorded both historically and contemporarily.
Unions may also engage in broader political or social struggle. Social Unionism encompasses many unions that use their organizational strength to advocate for social policies and legislation favorable to their members or to workers in general. As well, unions in some countries are closely aligned with political parties.
Unions are also delineated by the service model and the organizing model. The service model union focuses more on maintaining worker rights, providing services, and resolving disputes. Alternately, the organizing model typically involves full-time union organizers, who work by building up confidence, strong networks, and leaders within the workforce; and confrontational campaigns involving large numbers of union members. Many unions are a blend of these two philosophies, and the definitions of the models themselves are still debated.
Although their political structure and autonomy varies widely, union leaderships are usually formed through democratic elections.
Some research, such as that conducted by the ACIRRT, argues that unionized workers enjoy better conditions and wages than those who are not unionized.
In Britain a series of laws introduced during the 1980s by Margaret Thatcher's government restricted closed and union shops. All agreements requiring a worker to join a union are now illegal. In the United States, the Taft-Hartley Act of 1947 outlawed the closed shop, but permitted the union shop unless the state government chose to prohibit it.
In addition, unions' relations with political parties vary. In many countries unions are tightly bonded, or even share leadership, with a political party intended to represent the interests of working people. Typically this is a left-wing, socialist, or social democratic party, but many exceptions exist. In the United States, by contrast, although it is historically aligned with the Democratic Party, the labor movement is by no means monolithic on that point; this is especially true among the individual "rank and file" members. For example, the International Brotherhood of Teamsters has supported Republican Party candidates on a number of occasions and the Professional Air Traffic Controllers Organization (PATCO) endorsed Ronald Reagan in 1980. (However, when PATCO went on strike in violation of their "no strike" contract, President Reagan ordered them back to work. Those who didn't return to the job were fired and replaced, effectively destroying PATCO.) The AFL-CIO has been against liberalizing abortion, consistent with a Republican position, so as not to alienate its large Catholic constituency. In Britain the labor movement's relationship with the Labour Party is fraying as party leadership embarks on privatization plans at odds with what unions see as the worker's interests. On top of this in the past there as been a group known as the Conservative Trade Unionists or CTU. A group formed of people who sympathized with right wing Tory policy but were Trade Unionists.
In Western Europe, professional associations often carry out the functions of a trade union. In these cases, they may be negotiating for white-collar workers, such as physicians, engineers, or teachers. Typically such trade unions refrain from politics or pursue a more ordoliberal politics than their blue-collar counterparts .
In Germany the relation between individual employees and employers is considered to be asymmetrical. In consequence, many working conditions are not negotiable due to a strong legal protection of individuals. However, the German flavor or works legislation has as its main objective to create a balance of power between employees organized in unions and employers organized in employers associations. This allows much wider legal boundaries for collective bargaining, compared to the narrow boundaries for individual negotiations. As a condition to obtain the legal status of a trade union, employee associations need to prove that their leverage is strong enough to serve as a counterforce in negotiations with employers. If such an employees association is competing against another union, its leverage may be questioned by unions and then evaluated in a court trial. In Germany only very few professional associations obtained the right to negotiate salaries and working conditions for their members, notably the medical doctors association Marburger Bund and the pilots association Vereinigung Cockpit. The engineers association Verein Deutscher Ingenieure does not strive to act as a union, as it also represents the interests of engineering businesses.
Finally, the structure of employment laws affects unions' roles and how they carry out their business. In many western European countries wages and benefits are largely set by governmental action. The United States takes a more laissez-faire approach, setting some minimum standards but leaving most workers' wages and benefits to collective bargaining and market forces. Historically, the Republic of Korea has regulated collective bargaining by requiring employers to participate but collective bargaining has been legal only if held in sessions before the lunar new year. In totalitarian regimes such as Nazi Germany, Trade Unions were outlawed. In the Soviet Union and China, unions have typically been de facto government agencies devoted to smooth and efficient operation of government enterprises.
Dr. Charles Baird of California State University East Bay argues that as labor is a commodity, and unions essentially operate by centralizing labor, forming a monopoly on the commodity. This monopoly on labor has the same negative effects as any other monopoly., of reducing the amount sold (in this case, this means increasing unemployment) raising the price in the short term and decreasing efficiency.
Trade unions have been accused of benefiting the insider workers, those having secure jobs, at the cost of the outsider workers, consumers of the goods or services produced, and the shareholders of the unionized business. Those who are likely to be disadvantaged most from unionization are the unemployed, those at risk of unemployment or workers who are unable to get the job they want in a particular line of work.
In the United States, the outsourcing of labor to Asia, Latin America, and Africa has been partially driven by increasing costs of union partnership, which gives other countries a comparative advantage in labor, making it more efficient to perform labor-intensive work there.
Milton Friedman, Nobel Prize winning economist and advocate of laissez-faire capitalism showed that unionization produces higher wages (for the union members) at the expense of fewer jobs, and that, if some industries are unionized while others are not, wages will tend to decline in non-unionized industries.
Unions are sometimes accused of holding society to ransom by taking strike actions that result in the disruption of public services.
The largest organization of trade union members in the world is the Brussels-based International Trade Union Confederation, which today has approximately 309 affiliated organizations in 156 countries and territories, with a combined membership of 166 million. Other global trade union organizations include the World Federation of Trade Unions.
National and regional trade unions organizing in specific industry sectors or occupational groups also form global union federations, such as Union Network International and the International Federation of Journalists.
Another source of labor news is the Workers Independent News, a news organization providing radio articles to independent and syndicated radio shows.
Labor Notes is the largest circulation cross-union publication remaining in the United States. It reports news and analysis about labor activity or problems facing the labor movement.