Labor Unions Explained: How They Improve Pay and Work Conditions

A labor union is a worker organized group that negotiates pay, benefits and working conditions with employers through collective bargaining, and understanding how unions function matters for anyone weighing a job offer, a raise, or a workplace organizing drive. Membership has shrunk for decades, but unions still shape wages across entire industries.

At a Glance

• About 10% of the U.S. workforce belonged to a union in 2023, down from roughly 20% in 1983.
• Nearly a third of U.S. union members work in the public sector.
• Union members earned a median of $1,263 per week in 2023 versus $1,090 for non-union workers.
• 27 states have right to work laws that let non-members skip dues while still getting union negotiated benefits.
• Organizing has spread into new territory, including Amazon warehouses and more than 385 Starbucks locations.

What Unions Actually Do

Unions are voluntary, democratically run groups of workers. Some, called trade unions, organize around a specific occupation. Others, industrial unions, cover everyone in a particular industry regardless of job title. Many operate as national organizations with local chapters spread across cities and states. Under the National Labor Relations Act, U.S. workers have the legal right to vote a union in as their official bargaining representative.

Once a union is recognized, it negotiates directly with an employer, or sometimes a group of employers, to hammer out pay scales, benefits and workplace rules. If talks stall, a union can call a strike under certain legal conditions, and employers retain the option to lock workers out.

Where Union Membership Stands Today

The share of unionized workers varies enormously from country to country, and the U.S. trend has been one of steady decline. In 1983, about 20% of the American workforce carried a union card. By 2023 that figure had fallen to 10%.

Public sector workers make up nearly a third of all union members nationwide, and more than a third of that sector's workforce is unionized, a sharp contrast to the roughly 6% unionization rate in private industry. Teachers, police officers and firefighters remain some of the most heavily unionized public employees in the country.

Manufacturing once anchored organized labor, but as those jobs have thinned out, unions have pushed into service and professional work where they historically had little presence. That shift has produced some notable wins: organizing campaigns have succeeded at several Amazon warehouses, and by 2024 more than 385 Starbucks coffee shops had voted to unionize.

Quick Facts

• 10% of U.S. workers were union members in 2023.
• Union households earned a median of $1,263 weekly, compared with $1,090 for non-union workers.
• China bans independent labor unions and permits only a government controlled labor organization.
• The AFL-CIO is a federation of 57 unions active in politics and policy.
• The National Labor Relations Board enforces the rules laid out in the NLRA.

The Pushback Against Organized Labor

Business groups frequently oppose union organizing and the legislation unions favor. The U.S. Chamber of Commerce has said its aim on labor issues is to counter what it calls a one sided, anti employer agenda pushed by special interest organizations, and it has fought bills that would expand protections for union organizers.

Right to work laws, now on the books in 27 states, let workers benefit from a union's negotiated contract without joining or paying dues. Employers who resist unionization often argue that collective bargaining doesn't actually deliver pay or conditions better than what a company would offer anyway. Abroad, the picture can be starker: in China, independent unions are illegal, and the only sanctioned labor organization is controlled by the government rather than run for workers' benefit.

Does Union Membership Pay Off in Wages?

By the numbers, yes. Bureau of Labor Statistics data for 2023 shows union members earned a median of $1,263 a week, compared with $1,090 for workers outside a union, a gap of roughly 16%. That pattern holds in most countries with active labor movements.

Because unions answer to their members, contracts tend to prioritize workers' interests, which can raise long term costs for employers in both the public and private sectors. Collective bargaining is meant to balance those competing interests rather than favor one side outright. UPS offers a real world example: in 2021, its unionized workforce, paid more than rival FedEx's non-union employees, became a recruiting advantage during a tight labor market, helping UPS hold onto workers when many companies struggled with turnover.

Where Organized Labor Goes From Here

The National Labor Relations Act sets the rules of engagement, banning unfair labor practices by both unions and employers and requiring good faith bargaining on both sides, with the NLRB enforcing those terms. Unions also remain active in politics, and the AFL-CIO's federation of 57 unions continues to lobby for policies favorable to organized labor. With membership at a historic low but organizing spreading into retail and warehouse work, the open question is whether recent campaigns at companies like Amazon and Starbucks mark a genuine turning point or a narrow exception to a decades long decline.