Now, let's look at why unions exist, how they are structured, and how the collective bargaining process works.
- Some workers belong to labor unions – organized groups of workers that bargain with employers to improve members' pay, job security, and working conditions.
Unions have a pyramidal structure. At the bottom are locals, who serve workers in a particular geographical area.
- Locals are usually organized into national unions that assist with local contract negotiations and negotiate industry-wide contracts.
- Nationals may be linked by a labor federation, such as the AFL-CIO, which provides assistance to member unions and serves as the principal political organ for organized labor.
When there's a discrepancy between what workers want in terms of salary increases, benefits, working conditions, and job security and what management is willing to give, the two sides engage in a process called collective bargaining.
- If everything goes smoothly, a contract is soon put into place.
- If negotiations break down, the sides may resort to mediation (in which an impartial third party makes recommendations for reaching an agreement) or arbitration (in which the third party imposes a binding agreement).
- When unionized workers feel that they've been treated unfairly, they can file grievances – complaints over contract-related matters that are resolved by union representatives and employee supervisors.
If labor differences can't be resolved through collective bargaining or formal grievance procedures, each side may resort to a variety of tactics. The union can do the following:
- Call a strike (in which workers leave their jobs until the issue is settled)
- Organize picketing (in which workers congregate outside the workplace to publicize their position)
- Arrange for boycotting (in which workers and other consumers are urged to refrain from buying an employer's products)
- Management may resort to a lockout – closing the workplace to workers – or call in strikebreakers (nonunion workers who are willing to cross picket lines to replace strikers).