Effects of Unions

  • Higher wages
    • $917 / week for union members
    • $717 / week for nonunion employees
  • Job security
    • Union members
      • Can only be fired for “just cause.”
      • Grievance procedures and arbitration protect employees
    • Nonunion employees work “at will”
      • Can be terminated for any reason, or no reason
      • No collective bargaining protection or grievance procedures
  • Medical benefits
    • More insurance
      • 93% of union members have medical benefits
      • 69% of nonunion employees
    • Better insurance
      • For union members employer paid
        • 89% of the insurance premium for the union member
        • 82% of the insurance premium for family members
      • For nonunion employees, employer paid
        • 79% of the insurance premium for the employee
        • 66% of the insurance premium for family members
  • Retirement benefits
    • 93% of union members have retirement benefits
    • 64% of nonunion employees have retirement benefits


  • 1935 the National Labor Relations Act (NLRA) guaranteed the rights of private sector employees to organize into labor unions
  • 1947 the Taft-Hartley Act amended the NLRA
    • Allows individual states to pass Right to Work laws
    • Right to Work laws:
      • Prevent unions from negotiating contracts requiring companies to fire workers who refuse to join the union
      • Prohibit unions from collecting union dues from employees that are not members of the union.  Effectively making union dues voluntary.

24 States have Right to Work laws

Effect of Right to Work laws

  • Union is the employee’s exclusive bargaining agent
  • Union is required to represent every employee
  • Employee is bound by the union contract
  • Employee is not required to
    • Join the union
    • Pay union dues

Why all the fuss about Right to Work laws?

  • Erroneous perception that Unions do not act in the best interest of employees
  • Problem of “freeloading”
    • People generally will not pay for a benefit they perceive they can get for free
    • Active participation in, and financial support of, voluntary organizations tends to decline over time





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