Labor Union – Definition

Cite this article as:"Labor Union – Definition," in The Business Professor, updated July 30, 2019, last accessed September 26, 2020,


Labor Union Definition

A trade union is another term for a labor union. This refers to an organization which represents the workers’ collective interests. The labor union assists workers come together to negotiate with employers over hours, benefits, wages, and other working conditions. Often, labor unions are industry-specific and are likely to be more familiar in mining, manufacturing, transportation, the public sector, and construction. However, while it’s beneficial to members, it’s representation in the U.S. has declined drastically in the private sector.

A Little More on What is a Labor Union

Labor unions protect workers’ rights in certain industries. A union functions like democracy by holding elections for appointing officers. It is the obligation of the union officers to make decisions beneficial to the union participants. The union’s structure is as a locally based employee group who get a charter from an organization at the national level. Dues are paid by employees to the national union and in return, the labor unions play the role of an advocate on behalf of the employees.

The Wagner Act, which is another term for the National Labor Relations Act, guarantees employees in the private sector the right to create labor unions. The act allows unionized employees to embark on strike and jointly bargain for favorable working conditions.

Two big organizations oversee a majority of the United States’ labor unions and they are the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Change to Win federation (CtW). The AFL-CIO was founded in 1955 after the fusion of the two groups and has around 20 million members. In 2005, the Change to Win Federation spun off from the American Federation of Labor and Congress of Industrial Organizations. In many nations all over the world, there is the existence of labor unions, including countries such as Germany, Sweden, the United Kingdom, and France. Many large unions, both local and federal, would actively lobby legislators in order to achieve goals they deem useful to their membership.

An Example of a Labor Union

Almost every union is designed the same way and execute duties similarly. The National Education Association is a labor union of professionals which represents teachers, as well as, other education experts in the workplace. This is the United States’ largest labor union, having almost 3 million members. The aim of the NEA is to advocate for education experts and unite its members to fulfill the public education promise.

The National Education Association works with local, as well as, state education systems set good wages for its members, among other things. The NEA begins with a bargaining unit during the salary negotiation process on behalf of its teachers. The bargaining unit with an employer to bargain and guarantee that its members get proper compensation and representation. The United States’ law requires that the employer, school district, actively bargains with the union fairly. However, the employer isn’t mandated to agree to any given terms. Many negotiation rounds are carried out between the employer and the bargaining party, after which they would agree upon and sign a collective bargaining agreement (CBA). The CBA outlines pay scales and also includes other terms of employment like vacation and sick days, working hours, working conditions, and benefits.

After the CBA is signed, an employer can’t change the agreement without the approval of a union representative. However, CBAs eventually expire during which it’s mandatory that the labor union negotiates and both parties sign a new agreement.

References for “Labor Union

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