Disadvantages of Labor Unions

by Sarah Kuta - Updated June 27, 2018
Businessman discussing with female coworkers

Many professions have labor unions, or organizations intended to represent workers and their interests. There are hundreds of different labor unions across the country including those representing teachers, electricians, factory workers, plumbers and dozens of other professions. Though advocates tout the benefits of labor unions, there are also some disadvantages to consider.

What Are Labor Unions?

Labor unions are organizations or groups formed to represent workers. The goal of these groups is to promote the interests and needs of workers including their pay, hours and working conditions. Unions are intended to create a collective voice for workers – their philosophy is that there's strength in numbers. According to the most recent data available from the U.S. Bureau of Labor Statistics, 10.7 percent or 14.8 million Americans – wage and salary workers – were members of unions in 2017.

Workers often pay union dues, which help cover the cost of things such as full-time union staff members, government lobbyists, lawyers and strike funds. While some unions have paid staff members, others operate with volunteer members who are elected to leadership positions. Union chapters and boards may hold regular meetings to discuss upcoming events or initiatives.

Disadvantages of Labor Unions

Though many people believe that labor unions are beneficial, there are some disadvantages to consider as well. For workers, one drawback is the cost of union dues and initiation fees, which vary greatly depending on the organization, but can be several hundred dollars per year. Research has also found that unions can create a less collaborative work environment between workers and their managers. Forming a union could also ultimately contribute to a business shutting down, which means workers are out of jobs.

On the employer side, unions can create higher annual labor costs for the company. According to the U.S. Bureau of Labor Statistics, union members had median weekly earnings of $1,041, whereas nonunion members earned $829. While this is a benefit to workers, it's a disadvantage to employers, who are trying to keep costs as low as possible.

Some union labor contracts can also make it more difficult for employers to fire workers, even if firing is warranted. If there are rules related to tenure and seniority, union contracts can also make it more challenging to promote qualified employees who have fewer years on the job than other employees. The lack of career advancement opportunities can impact productivity, as there are few incentives for employees to work hard to get ahead.

About the Author

Sarah Kuta is an award-winning Colorado writer and editor with a journalism degree from Northwestern University. She regularly writes about personal finance, saving for retirement, business, startups and saving money. Her work has appeared in Don't Waste Your Money, The Penny Hoarder, the Associated Press, the Denver Post and other publications.

Cite this Article A tool to create a citation to reference this article Cite this Article