Unions can benefit workers by creating the opportunity for collective bargaining, which gives them better outcomes in negotiations. This often benefits employers too through increased productivity.
But unions can be harmful when they disincentivize exceptional individuals, get mired in bureaucracy or corruption, or create market distortions that lead to job losses.
In this article, we are going to look at 10 pros and 10 cons of unions to understand them better.
Pros and Cons of Unions
Pro 1: Collective Bargaining
Collective bargaining is considered a key feature of labor unions and serves as a foundation of most of the benefits that they provide.
Large employers have considerably more resources than any single employee, which creates an imbalance of power during negotiations. By negotiating on behalf of employees as a collective, unions balance this power, which allows for a more fair negotiation.
For example, if the employees of a company are unsatisfied with their wages and one of them presents an ultimatum to resign if their needs are not met, the employer can decline this without suffering notable negative consequences.
The employee quitting would be harmed more than the employer. If a union threatens a strike or mass resignation, the employer is at risk if they refuse to negotiate.
Pro 2: Wage Increases
The higher wages that unions are able to negotiate in workplaces have far-reaching consequences.
The direct results are that the workers are more satisfied with their pay and the quality of life that it brings them. This increases overall job satisfaction, which benefits the employee, and productivity, which benefits the employer.
The indirect results of wage increases for workers can affect many parts of the economy. Increased economic mobility can stimulate new markets and existing markets to grow further, which in turn benefits all sectors of local economies, including business owners.
Pro 3: Greater Benefits
Unions do not only have to negotiate wages. Workers receive compensation for their labor in the form of many indirect payments.
These benefits include things like health insurance, pension plans, and similar. These benefits improve the quality of life, health, and life expectancy of workers.
This can benefit employers as well. An increase in employee health, for example, means that workers are missing less days and losing less productivity due to illness.
Pro 4: Improved Working Conditions
One of the earliest major breakthroughs that labor unions achieved was in improving working conditions, specifically with regard to employee safety.
Although this is overlooked these days due to the relative safety of the modern workplace, these early changes were critical to the improvement of the workplace.
Better safety and other working conditions led to vast improvements in the quality of life of employees, all the way up to avoiding death in the workplace. For employers, the increase in morale and decrease in turnover meant that overall productivity was improved.
Pro 5: Job Security
Labor unions also negotiate for agreements around termination, disciplinary proceedings, and notice periods to be included in contracts.
These are a great benefit to workers because they provide better job security and, by extension, financial security in their personal lives.
For employers, the inclusion of objective disciplinary proceedings in lieu of immediate dismissal helps to ensure that good employees are not fired unfairly or erroneously.
Pro 6: Voice in Politics
In the same way that unions give workers a stronger position when negotiating with their employers, they can also give them a more powerful voice in politics.
Although the democratic process is designed to ensure fairness to all, parties and institutions with more clout and funding have more influence over lawmakers than any one working class individual.
Unions can function as such an institution and represent the voice of their members.
Pro 7: Legal Protection
Workers may face injustice and discrimination in the workplace but not be able to afford a lawyer to seek damages through legal proceedings.
Unions can provide legal representation to their members through the use of staff attorneys.
These legal professionals are not only on retainer for the union, but they also have a lot of experience in knowledge with the exact types of issues that workers who are members of their union may face.
Pro 8: Long-Term Career Prospects
Unions are independent of the employers, and very often, they do not limit themselves to only representing workers for one specific company.
Because of this, they can provide labor-related services to their members regardless of whether they want to stay in their current job or move on.
Promotion of union members’ long-term career prospects is often done through access to education, training programs, and schemes for acquiring further certification.
Pro 9: Sense of Community
Although it may seem very abstract, the camaraderie and sense of community that unions offer their members bring many benefits to all parties involved.
Unions may host social events to bring their members together outside of the workplace, but even if they do not, the collective bargaining processes creates a feeling of unity.
Workers that have a stronger sense of community with one another will be better at any sort of team working, which most workplaces and job roles have to some degree. This will increase their productivity, which benefits the employers as well.
Pro 10: Promotion of Equality and Inclusivity
Unions have always existed to give a voice to those who do not have one without them and promote social justice.
Although this was initially workers as a whole, unions have been able to advocate for smaller groups within the workforce who have themselves been marginalized within it.
By representing these groups and giving them the same opportunities as others, inclusivity and equality in workplaces is improved.
Con 1: Limited Individual Bargaining Power
Although collective bargaining benefits most employees it represents, it can disadvantage individuals who have their own power to bargain due to what they can provide or have provided to their employers.
Collective bargaining negotiations often lead to blanket agreements that cannot be adjusted for any one individual contract.
This can reduce the best performing or most important workers’ job satisfaction and quality of life by limiting future prospects.
These workers may also move to other employers, industries, or regions that are not covered by unions in order to improve their own position, which leads to a net loss of their old workplace or location.
Con 2: Less Flexibility
In addition to an increased rigidity in employee contracts, unions can also decrease flexibility in workplaces as a whole.
Blanket agreements negotiated by unions can prevent employers from adapting to changing circumstances. This condition exists due to past agreements and continues even if both employees and employers agree that a change would be positive.
These hurdles are often seen with changing technology, fluctuating demand for part-time workers, and needs to adjust timings and scheduling.
Con 3: Potential Lack of Representation
Ironically, many unions have problems with representing all of their members fairly and equally.
When the collective bargaining process gives less preference to the needs of certain groups of workers, it leaves these workers with a position that can be the same as or even worse than the one they were in before the union’s involvement.
In some unions, this situation occurs due to the importance they place on certain groups of employees, for example, by seniority within their workplace or within the union. In other unions, a lack of representation can occur when the leadership of the union chooses to prioritize one interest group due to their own personal preferences.
Con 4: “Lowest Common Denominator” Wages
Collective bargaining very often leads to agreements that standardize wages across employees in the same role.
These agreements necessarily eliminate the possibility of any pay or other compensation based on merit.
This can lead to less job satisfaction and quality of life for the employees that perform the best for the organization. These union agreements are especially damaging when they lead to a reduction in pay for certain workers, which can cause them to leave their employers for better prospects.
Con 5: Less Ad Hoc Arrangements
Although the standardization of workplace rules is designed to benefit workers, this can sometimes have the opposite effect.
Ad hoc agreements between employees and their employers or managers are often arranged to be mutually beneficial, but when rules are standardized by unions, these cannot be made.
This can lead to both lower job satisfaction and lower productivity through decreased efficiency.
Con 6: Adversarial Workplace Relations
Unions often approach negotiations from a confrontational perspective.
Although this has been necessary in the past and continues to sometimes be necessary in the present, in circumstances where employers are open to negotiations, it creates an adversarial relationship between employees and employers.
This adversarial relationship may lead to short-term wins for employees but will often lead to long-term losses for both sides. It can also lead to interpersonal friction in the workplace, which itself leads to lower job satisfaction.
Con 7: Cumbersome Bureaucracy
Unions can often be stifled by large and unnecessary bureaucracies. This is especially true for very large unions that need a transparent process to earn the trust of their members.
These bureaucracies can significantly slow down any progress that unions may make on behalf of their members.
They can also harm unions’ abilities to adapt to external changes, which may potentially make them more harmful than beneficial.
Con 8: Union Dues
Most unions require their members to pay a regular fee to be represented by them.
In theory, these dues should be offset by improvements that the unions are able to make to their members’ employment contracts.
In practice, low-wage workers may feel like these are an unnecessary expense when the unions only provide passive benefits rather than concrete ones. They may also feel like the union dues are being abused when unions use their funds for political purposes that the member does not agree with.
Con 9: Potential for Corruption
Some unions can be prone to corruption if they are not sufficiently managed and transparency is not enforced.
This can occur when power struggles take place within unions or when a union’s culture becomes more about amassing power than about protecting the worker and their best interests.
Any funds that leaders within a union misuse for their own personal purposes create new expenditures for workers without providing them any benefits.
Of course, most unions do not have systemic corruption, but they have been known to be corrupt at times.
Con 10: Distortion of Economies
Unions can end up with more power than employers and abuse this in negotiations. When this occurs, the unions may successfully negotiate wage increases that surpass what the employer is able to pay.
These kinds of market distortions will almost always lead to the employer shutting down or moving their workplace to a different location.
These new destinations either provide non-unionized workforces or much cheaper ones. In all such cases, the original unionized employees will lose their jobs.
We have learned today about how labor unions can both benefit and harm both sides of the employee-employer dynamic by looking at 20 pros and cons of unions. Overall, they have been found to beneficial for protecting workers and bringing in laws that ensure work doesn’t take over our lives (such as the 5 day work week and paid leave). But when unions go awry, they can sometimes do harm to workers, the economy, and society.
Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education.