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How Do Unions Work

The need for the existence of unions started way back in the time of the Industrial Revolution. This organization is used to negotiate with businesses and companies on behalf of the workers concerning working conditions, wages and other work benefits.

To learn how unions work, continue reading this article.

The existence of unions started way back in the Industrial Revolution. It was organized primarily on the goal of securing an improved working condition and wages for workers. When this kind of organization was created, it served the purposes of workers in manufacturing companies, textile factories and mines. Nowadays, unions have proliferated in different kinds of industries and serves as the negotiating group on behalf of union members and workers before the owners and management of corporations or businesses.

But how do unions work in the service of its members who are usually the workers? One can deduct the way unions work by tracing it down to its overall influence on the work force and on how they act on behalf of its members.

The Union’s Influence

If one would closely look at and analyze what unions create and influence in the work force, one can find two main activities. One is restricting labor supply and the other one is increasing labor demand. These unions can be compared with cartels that use collective bargaining in negotiating the wages that employers pay their workers. Usually, unions ask for higher wage than agreeing to the equilibrium wage, which is formulated as intersecting the points of labor supply and labor demand when these two are illustrated in a diagram.

The Methods of How Do Unions Work for Its Members

There are four methods that unions generally use to influence the increase in demand for labor and thus of wages. These are:

  • Negotiate for minimum wage increase. Asking for a minimum wage for workers creates an effect that increases the labor cost spent by employers on low-skilled workers. This will eventually decrease the gap between the wages of those who are low-skilled and highly skilled workers.
  • Push for the marginal productivity of workers. This method is usually applied through constant training of workers.
  • Support or lobby for the restriction of foreign products entering the country through controlling methods like quotas and tariffs. When the competition in the market is centered only on the local manufacturers, then it means increase in demand will only result to an increase in labor demand. This means more work for workers and jobs.
  • Pushing for stricter immigration rule. When the labor supply is controlled by limiting the entry of immigrants it thus limits the growth of labor supply, especially of low-skilled workers coming from foreign countries.
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