Trade Unions / Labor Unions

Unions—or more specifically, labor unions or trade unions— are found throughout the world and can be broadly defined as associations of workers, the purpose of which is to represent the working interests of their members with respect to wages, hours, grievance procedures, and working conditions, through collective bargaining with the employer. Collective bargaining is a process of negotiation between union and management representatives about the terms and conditions of employment, and the rights and responsibilities of the union. There are two main types of union: craft unions and industrial unions. Craft unions are historically the oldest form of union and consist of workers who possess a particular skill. Today, most craft unions represent members from a variety of occupations and skills, often unrelated to the original founding craft. Craft unions derive their power by controlling the supply of skilled labor. Industrial unions are composed of all workers in a given industry or group of industries, regardless of skill, craft, or occupation. The power of industrial unions lies in the size of their memberships, and their focus is on building unity and solidarity among workers.

In most countries unions have a legal status that entitles them to collectively negotiate with employers over wages, working conditions, and other terms of employment. Often when negotiations fail or these rights are curtailed, unions will engage in collective activities, such as strikes and boycotts, aimed at pressurizing employers to engage in some form of negotiation. In addition to strike actions, unions can use their membership numbers to lobby for legislation that protects the rights of workers and restricts the power of management.

The History of Labor Unions

Consistently across the world, labor unions have had to struggle to establish themselves and their legal rights. In most countries, the formation of unions has been illegal at some point in their history, with workers penalized for attempting to organize or joining unions. Despite this persecution, unions have survived and developed sufficient political and economic power to enable labor legislation that legalizes the organization of unions, protects the rights of their members, and formalizes the relationship between employers and employees. Many of the rights have generalized to both union and non-union workers.

The earliest forms of labor organizations can be found in the guilds of Western Europe that began to be formed in the Middle Ages (around the 11th century). These guilds were associations of craft workers that established working standards and wages, protected the craft or profession from competition and skill dilution, and established the social status of their members. Union growth was accelerated by the Industrial Revolution in the 19th century. During this time industry shifted from centering on cottage crafts to concentrating on machines. Poor working conditions, rising production expectations, low wages, and increased work hours forced workers to form worker associations that represented the interests of workers in different trades and industries. These associations eventually became labor unions. Because of fear of worker uprisings after the French Revolution, unions were banned by law in both France and Great Britain. It was only in the 1860s, with the vigorous organization of the textile and mine workers, that the Trade Union Act of 1871 was passed in Great Britain. This was the first of several legislative acts that provided unions with legal status and recognition.

In most European countries labor organizations are affiliated to, or synonymous with, political parties. In the Third World, labor organizations also play an active political role and have been instrumental in overthrowing colonial regimes and establishing political independence. Unions in many Asian, African, and Latin American countries continue to provide workers with an influential political voice.

The History of Labor Unions in America

In the United States, the first trade societies or unions were formed by craftspeople (such as shoemakers, printers, and cabinetmakers) soon after the American Revolution in the late 18th century. As the American economy expanded, these craft unions of like-skilled laborers gave way to the growth of national unions. In 1866 the National Labor Union was formed and organized both skilled and unskilled workers. It was the National Labor Union that first realized the political potential of unions and supported the creation of local unions of workers. It advocated an eight-hour workday, abolishing convict labor, restricting immigration, and organizing African Americans. However, as the National Labor Union’s political activity grew, its effectiveness as a national union diminished and it collapsed in 1872.

In 1886 several established craft unions joined together to form the American Federation of Labor (AFL) under the leadership of Samuel Gompers. Representing solely the interests of skilled labor, the AFL fought for standard hours and wages, fair working conditions, collective bargaining rights, and the collection of union strike funds. It was the AFL that initiated a business union approach to the management of unions (bread-and-butter unionism) where the primary purpose of unions was to represent the economic, rather than the political, interests of their memberships. The AFL fought for labor’s participation in decision-making processes through collective bargaining.

The depression of the 1930s encouraged the growth of industrial unions in America. Disenchanted with the craft-based unionization of the AFL, industrial workers led by John L. Lewis formed the Congress of Industrial Organizations (CIO). The CIO encouraged and organized industrial unions as well as promoting the unionization of women, immigrant, and African American workers. With strong labor support, Franklin D. Roosevelt was elected as president in November 1932. The Roosevelt administration facilitated the growth of unions and protected the rights of unions by the passage of labor legislation such as the National Labor Relations (Wagner) Act of 1935 and the Fair Labor Standards Act in 1938. Union membership expanded from 3 million workers in 1935 to 15 million in 1947.

The Decline of Labor Unions

The number of workers who are members of unions varies considerably both within and across countries. In Western Europe and Northern America, union density is higher in the public sector than in the private sector. Since the 1980s the percentage of workers who belong to a union has declined throughout the world with a few exceptions: Denmark, Norway, Turkey, South Africa, and Chile. Perhaps nowhere has this decline been steeper than in the United States. In 1960 approximately 33% of the nonagricultural labor force belonged to a union. By 2003 this proportion had dropped to less than 13%.

This global decline in unionization is corroborated by other statistics. During this time period there was a severe drop in strike activity, increases in the number of successful decertification elections and collective bargaining outcomes antithetical to workers’ interests, and reductions in the perceived legitimacy of organized labor in the political and public domains. There are many explanations for the decline of unions:

  • Cyclical economic forces, such as unemployment and inflation levels that affect the bargaining power of unions
  • Structural changes, such as the shift away from union-dense manufacturing industries to union-sparse service and knowledge industries
  • Global economic restructuring that brought about greater international competition and eroded the power of trade unions
  • Rapid growth in sectors of the labor force that were underrepresented in unions and less favorable to unionization (e.g., women and white-collar workers)
  • Diminished resources and declining efforts of unions to expand union membership and recruit new workers
  • Increased employer resistance to unions and corporate political lobbying efforts to pass legislation that weakens unions
  • The promotion of international trade legislation that weakened the rights of workers to organize by establishing agreements with countries that did not enforce basic labor rights
  • The replacement of blue-collar work with automation, technology, and outsourcing
  • A decline in pro-union attitudes among workers, and cultural and attitudinal changes that were antithetical to organized labor
  • Organizational activity and redesign that substituted for union activities

Although private sector unions have suffered the most drastic decreases in membership and density levels, public sector unions have grown in numbers and maintained their membership levels. The growth of public sector unions can be attributed to two trends. First, changes in legislation gave government and federal employees the right to join unions and to negotiate nonwage and fringe benefit issues. Second, changes in the economic environment led to the expansion of the public sector and the growth of government and a climate more favorable to union organizing efforts.

What do Labor Unions do?

Although union density levels vary considerably between industries, the private and public sectors, and countries across the world, millions of workers still belong to labor unions; and they still constitute an important part of industrial life. Unions have a substantial impact on the working lives of both unionized and nonunionized workers. Unions have played a crucial role in establishing the workplace laws and regulations that constitute labor and industrial relations policies throughout the world. A substantial body of research indicates that the protections and benefits that all workers enjoy can be attributed in large part to unions. Unions reduce wage inequality, set pay standards, and establish fringe and health benefits that are enjoyed by unionized and non-unionized workers alike.

Apart from negotiating better wages and benefits for their members, unions engage in collective bargaining to ensure that workers are treated fairly and equitably. In unionized workplaces there is usually an agreed-on grievance procedure for resolving workplace conflicts and violations of worker rights. Unions also give workers a voice in workplace decisions that affect their lives. The collective bargaining process allows unions to negotiate a contract with their employer that enables workers to participate in shaping workplace policies.

Industrial/Organizational Psychology and Labor Unions

Unions continue to play an important role in industry and have a substantial impact on organizational functioning. Yet industrial/organizational (I/O) psychology has largely chosen to ignore unions, both in terms of its research focus and its exclusion of union-related topics in popular textbooks. There are two main reasons for this neglect, as noted by Julian Barling, Clive Fullagar, and E. Kevin Kelloway (1992). First, many I/O concepts (e.g., job analysis, performance appraisal, and union avoidance) are antithetical to the interests of organized labor, and I/O psychology has, from its inception, been affiliated with management. Second, unions have never had the financial resources to sponsor psychological research on union issues that are beneficial to organized labor or to employ I/O psychologists. However, the little psychological research that has been done on unions has investigated why workers join unions, their commitment to the union, and their participation in union activities.

Why Do Workers Join and Get Involved With Labor Unions?

One of the main trigger mechanisms that causes workers to join unions is dissatisfaction with their jobs. Specifically, workers who are dissatisfied with their pay and working conditions are more likely to join a union. Although dissatisfaction with the extrinsic characteristics of the job have been found to be the most important predictor of unionization, dissatisfaction with intrinsic factors, such as the amount of job control and trust of management, have been found to be important correlates of unionization in professional samples.

Just being dissatisfied with a job is an insufficient reason to join a union. Workers also have to believe that the union will be instrumental in redressing these dissatisfactions. Union instrumentality beliefs, then, mediate the relationship between job dissatisfaction and voting for or joining a union. Not only are specific beliefs about the effectiveness of a person’s own union important predictors of unionization; so, too, are attitudes about unions in general. Research would suggest that workers join unions for both instrumental and ideological reasons. Furthermore union instrumentality beliefs and general union attitudes are also important predictors of why workers leave and decertify unions.

Another thread in the research on unions is the question of how workers become committed to unions. Commitment is a construct that has occupied a central role in the literature on attachment to labor unions. Union commitment has consistently been found to consist of three components:

  1. Loyalty to the union, which denotes a pride in the union, an affective identification with the union, and a desire to remain a member of the union
  2. A sense of responsibility to the union to engage in the day-to-day duties of a member
  3. A willingness to work for the union and engage in extra-role activities beyond those normally required for membership

Socialization practices seem to be important determinants of union commitment. Personal interaction with established members of the union is the primary means whereby new members internalize the norms of the union and develop commitment. Attitudinal variables that are associated with union commitment include intrinsic and extrinsic job dissatisfaction, beliefs about union instrumentality, and positive attitudes toward unions in general. Some structural characteristics have also been identified as having an important effect on union commitment. Specifically, the size of the union, the span of control of its officers, the extent of decentralization of collective bargaining, overall accessibility to union activities by the rank and file, and the voluntary nature of the labor union have all been found to be associated with attachment to unions.

One of the reasons that union commitment has become a focus of research attention is that it is predictive of participation in several union activities, including propensity to strike, activism within the union, support for political action, endorsement of political candidates, and turnover within unions. Union participation can be categorized into participation in formal and informal activities. Formal participation refers to involvement in such activities as voting in elections, meeting attendance, familiarity with the collective agreement, grievance filing, and serving as an officer or on a union committee. In other words formal participation is engaging in behaviors that are necessary for the union to operate effectively and democratically. Informal participation refers to engagement in such organizational citizenship behaviors as helping other members learn about the union, talking up the union, reading the union’s publications, and helping another member file a grievance. These behaviors reflect support for the union but are unnecessary for its survival. Participation in union activities is believed to have several beneficial consequences such as preventing union oligarchies, unifying the membership, and generally facilitating the representative purpose of labor organizations. There is also some research evidence to suggest that participating in union activities, especially strikes, is extremely stressful.

One issue that has been of continuing concern to researchers is whether workers can be loyal to both the union and the employing organization. The results of this research have been equivocal, with some studies indicating a positive correlation between union and company loyalty, others finding no relationship, and still others suggesting a negative association between the two constructs. One important moderator of this relationship is the nature of the industrial relationship climate. When union-management relations are favorable and cooperative, company and union commitment are positively related. When union-management relations are strained and hostile, negative correlations occur. The type of union also seems to play a role. In more aggressive unions, whose membership consists of more alienated and disenfranchised workers, there is a greater tendency toward unilateral allegiance to the union. By contrast, in protective unions, whose memberships consists of more empowered workers who form unions to protect their jobs, there is more likelihood of dual allegiance.


Labor unions have played an important worldwide role in industrial relations for more than 200 years. Today, millions of workers are members of unions. These unions have a significant effect on the working lives of their members, affecting their wages, job security, working conditions, productivity and performance, turnover, absenteeism, job satisfaction, work stress, and perceptions of social justice. Consequently, any scientific field that has as its aim the study of people in the workplace must acknowledge the influence that unions have on organizational behavior. Knowledge of organizational behavior and unions can be enhanced by an understanding of the impact that each has on the other.


  1. Barling, J., Fullagar, C., & Kelloway, E. K. (1992). The union and its members: A psychological approach. New York: Oxford University Press.
  2. Freeman, R. B., & Medoff, J. L. (1985). What do unions do? New York: Basic Books.
  3. Shostack, A. B. (1991). Robust unionism: Innovation in the labor movement. Ithaca, NY: ILR Press.