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Why Labor Unions Are Good for Workers

What’s good for workers is good for the economy, democracy, and the health of society overall. 

Unions are a crucial indicator of a strong, cohesive, and effective labor movement in any industry. From meatpackers to steelworkers, coal miners to electricians, teachers, nurses, and public service employees — unions are the glue that keeps workers together and moving toward a common goal: improved conditions and compensation.

However, we're sliding backward with declining union participation in the United States. COVID pandemic lockdowns only worsened this, widening wage gaps and reducing access to benefits. 

Let’s examine the current state of unions in the United States, why they’re so important in the modern economy, and what organizations like Steady are doing to raise the bar for workers’ rights and self-determination. 

How Unions Work

Organization and agreement among workers at the core of a union are formed to advance particular interests. These objectives range from better benefits like healthcare or paid medical leave to improved conditions such as workplace safety, reduced daily working hours, and more.

The mechanism at work here is called collective bargaining, a process by which unions negotiate with employers to compromise on new contracts that better suit the needs of the workers. When workers strike (refusing to work until the contract is authorized), the organization is pressured to reach a collective bargaining agreement.

Every union has a slightly different structure based on the size of the bargaining unit (the group covered by the agreement), tactics employed by past organizers, and the most urgent economic and political conditions of the moment.

Federal, state, and local laws also determine what unions can and cannot do, as outlined by organizations like the National Labor Relations Board (NLRB) and the 1935 National Labor Relations Act.

From the standpoint of an individual worker, they have the choice to join a union or not, depending on whether they agree with the cause or see benefits for themselves. For many workers, it’s a constant balance of weighing options between employer contracts and union negotiations - the best course of action is not always cut and dry.

What Are the Advantages of Unions?

Unions may not be as prevalent as they once were due to changes in work styles, demographics, media messaging, and many other cultural and political factors.

However, the advantages of unions are clear to anyone who glances back into labor history, particularly in Europe. Because Europeans have a much greater emphasis on unions, they set the standard for best practices in the United States. We’ve seen how these ripple effects improve conditions and outcomes for workers in America.

Here are some of the most significant accomplishments of unions from the past couple of centuries:

  • The first strike in British Colonies was in 1768, as tailors protested a drop in wages. The first U.S. union was established in 1794.
  • Unions gave African American workers a voice following the abolition of slavery.
  • The average workweek was shrunk down to around 40 hours thanks to efforts by union organizers and political leaders via the Fair Labor Standards Act in 1937.
  • Shorter work days were also achieved as multiple trades were united in factory settings during the industrial revolution.
  • The National Consumers’ League and the National Child Labor Committee also pushed for the restriction of employment of child workers through the FLSA.
  • The first minimum wage was set in 1933 under the National Industrial Recovery Act, with the help of union organizers, then made constitutional in the FLSA.
  • Extra pay for overtime work was established in the FLSA.
  • Modern “yellow” unions organize and fight for higher wages in large companies like Amazon, Starbucks, Walmart, Target, Trader Joe’s, and others.

Union membership peaked in 1979, with more than 21 million members. Although fewer in number, today’s union members earn more than 10% of what non-union members make in the same industry.

What Unions Don’t Do

There are plenty of reasons to respect and appreciate what unions have done in the past, but these organizations have limitations, especially in the advanced digital economy of today.

While unions may have held power in the past, they could not stop large American corporations from expanding overseas and outsourcing labor to workers willing to accept lower wages. While fighting for increased wages in industries like automotive manufacturing, union activity may have played a role in these globalization trends.

Unions are not a magic wand when bargaining for better working conditions and can hold back industrial or technological advancement. Those critical of unions point out that these organizations do not create wealth but rather siphon off existing wealth creators. Collective bargaining is how wages are raised rather than improvements in productivity or tech.

Some historians state that unions are not as all-encompassing or effective as they wish to be seen. Many workers oppose unions because they prefer to negotiate directly with company representatives or are eager to advance within the ranks of an organization.

In other scenarios, workers may be satisfied with their wages and conditions or even plan to start a business. In this case, it benefits them to work with their employer rather than against them.

Who Can Join a Union?

If you have a specific trade and work within an industry with established unions, you have every right to join a union if you believe it will give you an advantage in your career.

Industries like construction, healthcare, telecommunications, and transportation have union jobs, although private sector unions have been waning since the 1980s.

More common union jobs are found in public sector institutions like teachers, police officers, firefighters, post office workers, and administrators.

The challenging part might be finding a path into these union roles since they tend to be highly coveted and come with additional responsibilities and fees. Many people are “grandfathered” into union jobs, and it’s rare to get invited to one of these roles without a prior connection via friends or family.

On the other hand, some industries are built to prevent unions from forming since workers are not considered employees in the traditional sense. Gig economy roles are an increasingly common example of this structure, as workers are legally viewed as independent contractors and cannot unionize under current legal conditions.

This is a new frontier for activists and organizers who want equal rights for gig workers in emerging industries like rideshare drivers, freelancers, and other non-traditional arrangements with employers.

Who Opposes Unions?

Union opposition has been common since these organizations first came together in the 18th century in America. Employers are incentivized by maximizing profits for their benefit and reinvestment into the business, and increased worker wages go against that principle.

This isn’t to say that all employers are intentionally cruel. There wasn’t much wealth in pre-industrial settings, and conditions were less than ideal for everyone.

However, some corporations now oppose unions more directly and speak out against progressive ideas like minimum wage laws, universal basic income, and similar ideas.

In the public sector, it gets more complicated since governments are already run on taxpayer money and debt. Therefore, collective bargaining does not compete against governments but against private citizens.

This may explain why public sector unions are more successful in their efforts since bargaining is mediated through government organizations with less representation from the people who foot the bill.

Remember, only a third of the labor force was part of a union, even at the height of union power in the 1970s. This means that two-thirds of workers were either anti-union in their stance or simply were not compelled to join for other reasons.

Indeed, some workers oppose unions because they desire the stability of employment, don’t want to disrupt their wages, or are not on board with the motivation behind a strike in the first place. Some strikes are personal matters and have little to do with workers at large, and support may dwindle in these cases.

How Have Unions Played an Important Role in Securing Workers’ Benefits?

Many worker benefits are not mandated by law and are offered voluntarily to attract talented employees to an organization. However, a handful of employee benefits are required by law, including Social Security, Medicare, unemployment insurance, workers’ compensation insurance, and Family and Medical Leave Act FMLA protections.

It seems like a lot at first glance, but when you itemize these benefits and add them up over a lifetime, they may not amount to much. Furthermore, these benefits aren’t guaranteed, and many of these costs are recycled back into government funds for other purposes.

Unionization may be an intelligent step forward, but it’s not the only option. A better solution may be to empower workers individually, giving them more control over their earnings, work, and where they allocate funding.

This requires educational efforts and the promotion of financial inclusion to get workers locked in with banking, investment, and good tax strategies. Steady is hard at work to get more workers in the loop with these resources, focusing on closing gaps across economic lines.

These efforts are critical and more urgent for gig workers, freelancers, and others participating in the gig economy. Steady’s income tracker compiles financial your income info from all sources to help you maximize when, how, and how much you're making, while Income Passport streamlines this process even further when you need to organize your income in a pinch.


While some hope lingers for unions in the United States, a new era of work has emerged, and labor organization is a thing of the past.

This isn’t necessarily bad news, but we must be ready to enter the next chapter with the tools and tactics necessary to avoid pitfalls. With Steady and our partners leading the charge, we can usher in an economy with more autonomy for workers, with better wages and lifestyle arrangements for people of all backgrounds.

A mix of education, activism, and organization will lead to a better future for everyone involved. Unions may not be the best mechanism for change now, but we can learn from these past efforts to blaze a better path forward right now.


The History of Unions in the United States | Investopedia

What is Collective Bargaining? | FindLaw

Why Unions are Good for Workers | Economic Policy Institute