Economics / Unit 6: Business Organization and Labor
6.6 Labor Unions
Notes
A labor union is an organization of workers that negotiates with employers over wages, benefits and working conditions.
- Collective bargaining: union and management negotiate a contract for all workers in the union.
- If talks fail, workers may strike (stop working). A neutral mediator helps both sides reach agreement; in binding arbitration, a neutral party decides and both sides must accept the decision.
- History: the Knights of Labor grew in the 1880s; the American Federation of Labor (AFL), led by Samuel Gompers, formed in 1886 to organize skilled workers. The CIO organized industrial workers starting in 1935; the two merged as the AFL-CIO in 1955.
- The Wagner Act (National Labor Relations Act, 1935) guaranteed workers' right to organize and bargain collectively.
- The Taft-Hartley Act (1947) limited some union practices, banned the closed shop (hiring only union members) and let states pass right-to-work laws, which forbid requiring workers to join a union.
- The share of U.S. workers in unions has fallen greatly since the 1950s. Supporters credit unions with higher wages and safer workplaces; critics argue they can raise costs and reduce flexibility.
Practice
A union and a company cannot agree on a contract, so both sides let a neutral person make a decision they must accept. This is:
In binding arbitration, the arbitrator's decision is final.
The Wagner Act of 1935 was important to unions because it:
It protected union organizing and required employers to bargain.
A state law says workers cannot be required to join a union as a condition of employment. This is a:
The Taft-Hartley Act allowed states to pass such laws.
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