HRM Essay


Introduction. 2

Raised Wages. 2

Reduction in Wage Inequality. 3

Pay Standards. 4

Fringe Benefits. 4

Health Benefits. 5

Better Pension. 6

Vacation and Holidays. 7

Economic Advantage. 8

Political Advantage. 8

Conclusion. 9

References. 10


Labor unions are organizations formed with the aim of representing the collective interests of workers through negotiation on various issues including wages, working conditions, and benefits. To say that labor unions have not made a difference to workers in the United States of America and the country as a whole would be a downright lie (Voss & Sherman, 2000). This research paper will focus on the benefits that the labor unions have had on America and why these associations are ultimately beneficial for American workers. The issues to be discussed are the general rise in wages, reduced wage inequality, fringe benefits, vacations and holidays, improved pay standards, health benefits, and better pension deals. Lastly, the paper will examine the economic and political advantages of these unions in America.

Raised Wages

Over the years, labor unions have contributed to a significant wage increase for all union workers in America. Previously, most American workers received wages that could barely cater for their families in terms of food, shelter, and clothing, but much has changed since the onset of labor unions. Today, even the unionized workers receiving the lowest wages can be able to fully cater for their families’ basic needs (Voss & Sherman, 2000). While little pay is better than no pay at all, employers ought to realize that people have families that depend on them, hence the need for union representation.

According to Freeman and Medoff (1984), the union wage premium for the unionized workers tends to be between 10 percent and 20 percent more as compared to the workers that do not belong to any labor union. A union wage premium, in this case, is the rate at which the wages of workers in labor unions exceed those of their non-unionized counterparts. According to the statistics presented, one may understand the reason why most if not all American workers would prefer to be part of a union as opposed that can help them to fight for better wages. Therefore, labor unions can without a doubt be said to always contribute to a rise in workers’ wages.

Reduction in Wage Inequality

One of the aims of labor unions has been to reduce income inequality by raising the wages for low- and middle-income in efforts to narrow the gap between them and higher-wage workers. Their leaders and members feel that this would help to bridge the gap between the highest- and lowest-paid workers (Voss & Sherman, 2000). Labor unions have also helped bridge the gap between male and female wages in a country where males tend to receive higher wages than females. For this reason, labor union leaders have tried to fight for the standardization of wages received across all factors, including a worker’s age, gender, and skill set.

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Notably, the standardization of wages was put in place in an attempt to increase the union wage premium for low-skilled workers, less-educated employees, and the lowest-paid occupations. Since the late 1990s, significant differences have been manifested between union wage premiums of blue-collar workers and their white-collar counterparts. A similar situation has been portrayed in regards to the comparison between wage premiums for high school and college graduates. As seen in both cases, the margin is very large and as such, it has contributed to the reduced wage inequality among all workers.

Pay Standards

In the United States, not all workers are unionized. For those that belong to unions, there are notable pay standards that are followed diligently by employers. Incidentally, non-unionized employers as well tend to follow them when determining wages for their employees and private contractors (Voss & Sherman, 2000). The reason behind this is the situation is, of course, the fact that no one would look for jobs at non-unionized work stations knowing that the pay is less than that of their unionized equivalents. Therefore, the resulting balance tends to be beneficial for both unionized and non-unionized employers.

At the same time, it is worthwhile to note that these payment standards not only apply to salaries but also to the minimum overtime pay, immigrant workers, and minimum wages. By spearheading the standards that are to be applied when dealing with employers and private contractors, labor unions have done more good for the labor market than they may realize (Levine, 2000). Moreover, the standardization of payment levels for both unionized and not- non-unionized employers have forestalled desirable situations whereby employees swamp towards one employer at the expense of the other simply because the former is offering better wages.

Fringe Benefits

Fringe benefits refer to the different forms of benefits that an employer provides to an employee or private and independent contractor for the performance of services that may be part of their wages or salaries or additional rewards. Unionized workers are moreover likely to receive fringe benefits from their employers than their non-unionized counterparts. These benefits previously ranged from paid leave, health insurance, car benefits, car parking benefits, and loan benefits all the way to housing fringe benefits (Voss & Sherman, 2000). Meanwhile, labor unions have since tried to incorporate as many benefits as possible since some of them may have been cut out of the fringe packages like adequate health insurance.

As mentioned before, the issue of fringe benefits is very versatile in nature though not universal. But through the fringe benefits that have remained a year in year out, one cannot fail to acknowledge how much the labor unions have tried to look out for the workers’ interests in terms of what happens after their retirement from a job they have dedicated a huge part of their lives to. When viewed from this perspective, the unions appear to have benefited American union workers immensely.

Health Benefits

Workers in labor unions generally receive better and more generous health benefits as compared to the non-unionized workers. When looking for employment, some of the key things that people look out for are health benefits and health insurance. Health is a very vital component of every employee’s life, and promoting one’s wellbeing can be a very expensive undertaking. Unionized employees tend to have higher chances of receiving health insurance coverage while working and upon retirement. Moreover, they often pay on average 18 percent lower amounts in the form of health care deductibles compared to their non-unionized counterparts

Workers that are part of labor unions are more likely to receive health benefits provided to them by their employers compared to their counterparts operating in non-unionized organizations. Additionally, labor unions have played a significant role in the fight for workers’ health benefits. Consequently, the value of health insurance for all workers belonging to unions has been raised dramatically over the years. It is also worth noting that unionized employers tend to offer their employees better health insurance benefits as compared to those that are not unionized. Therefore, it is not surprising that some employers have been discouraging employees from enrolling for union membership as a way of avoiding some of the huge health-related payouts involved.

Better Pension

In regards to pension plans, the best options are provided by unionized companies. Workers that are part of labor unions receive better pension plans although they may have to contend with high wage deductions throughout their working lives as a way of contributing to a pension scheme. Meanwhile, the major benefit that comes with this approach is that one is guaranteed to receive retirement benefits during old age or payments in time of ill health or following dismissal. Many employees lack a retirement plan simply because they have never belonged to a union throughout their working years.

Despite stiff opposition from employers particularly in the private sector, labor unions continue to fight hard enough for workers. It is unfortunate that their influence has continued to decline drastically in recent decades. This turn of events may be a reflection of the growing dominance of an anti-unionization private sector in the United States. Despite these challenges, unions continue to occupy a unique position in corporate America, with many stakeholders relying on them to gather accurate information about employees’ preferences on matters such as provisions of pensions (Levine, 2000). The adversary it causes between employees and employers has not deterred union leaders from promoting the former’s right to better working conditions particularly affordable pension packages.

Vacation and Holidays

Labor unions require that the unionized workers be entitled to vacation and holiday time every working year regardless of their designations. Such a practice is important not just for workers but also for employers. The former get time to be with their families while the latter benefit through improved productivity that comes with increased job satisfaction and reduced fatigue. Compared to their non-unionized counterparts, unionized employees tend to receive more vacation and holiday time throughout their working careers.

            The need for unionization in America is particularly important for workers particularly considering that U.S. law does not guarantee them any vacation or holidays (Levine, 2000). Through unions, workers can campaign to have some days off to be with their families. Meanwhile, some people may draw a correlation between America’s position near the top of the productivity index among industrialized and its practice of limiting the number of paid vacation days and holidays given to workers. Nevertheless, denying employees this right may have long-term consequences for employers such as increased job dissatisfaction and a subsequent increase in turnover.

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            In regards to this issue, inequality across different categories of workers continues to be a major challenge. Many blue-collar workers have fewer opportunities for accessing vacations and holidays compared to those in white-collar jobs. With the recent decline in the place of unions in corporate America, it may be increasingly difficult to address this inequality. Fortunately, many employers choose to demonstrate benevolence by giving workers higher wages once they work during religious and national holidays. 

Economic Advantage

At the same time, labor unions have greatly helped unionized workers in the United States to fight for what they deserve as hard-working employees in terms of fair wages, wage equality, health insurance, pensions and paid leave. Additionally, they have helped to improve the economic advantage and economic power of the workers, and by extension, economic development (Madland & Walter, 2009). ‘United we stand, divided we fall’ is a phrase that accurately applies to workers in America and all over the world particularly in the context of efforts to provide a rationale for the formation of a trade union. As an individual, workers may not accomplish much by way of the fight for workplace rights. As a unit, though, they stand high chances of having their grievances responded to favorably without little or no resistance and intimidation.

One issue that has been debated a lot since the inception of labor unions and even before this development is the fact that employers generally tend to have more power than the employees (Levine, 2000). This situation is manifested in the way that employers tend to enjoy powers that allow them to take advantage of employees who desperately want to retain their jobs. Consequently, they end up agreeing to work for wages that are far below the minimum wage. On the other hand, many of those who get to work at minimum wage are compelled to work overtime without a corresponding increase in wages. One way in which the labor unions have tried to rectify this issue is by lobbying the government to impose certain regulations on labor contracts that give employees some voice in dictating the terms of a contract.

Political Advantage

Labor unions have traditionally been known to foster democratic participation. They tend to cater to the needs of almost all employees in America by helping to disseminate information on the implications of various political developments for the workforce. This way, the latter gain insights into ways of improving their country both economically and politically. One way in which labor unions help foster democratic participation is by contributing to organic solidarities, which are social entities formed on the basis of division of labor which in turn leads to teamwork in activities geared towards the realization of a common goal or objective.

Lastly, unionism has fostered democracy in America by resolving crucial problems that fall outside the scope of organizations’ dispute resolution mechanisms (Levine, 2000). In the process of solving these pertinent issues, unions become directly or indirectly involved in the country’s political process. An advantage of contribution is the ease with which mobilization becomes a reality during political campaigns. Through trade unions, political stakeholders are able to mobilize supporters not just to vote but also to operate as campaign workers. Consequently, over the years, it a relationship between union membership and voter participation has been established.


Based on this discussion, it is evident that labor unions are not only good for America’s unionized workers but also for the country as a whole. Workers who belong to unions are entitled to higher wages, better pensions, more generous health insurance, and better fringe benefits. Despite the waning influence of trade unions in America’s corporate scene, workers should continue with the struggle for unionization. This move will go a long way in terms of ensuring employment stability and better representation in all organizations. Labor unions also affect the economic and political situations in America positively, and therefore, should be promoted in all state’s professions, and job levels.


Freeman, R. B. & Medoff, J. L. (1984). What do unions do?. Industrial & Labor Relations Review, 38, 244-258.

Levine, P. (2000). The legitimacy of labor unions. Hofstra Labor and Employment Law Journal, 18(2), 529-572.

Madland, D., & Walter, K. (2009). Unions are good for the American economy. New York, NY: Center for American Progress.

Voss, K. & Sherman, R. (2000). Breaking the Iron Law of Oligarchy: Union Revitalization in the American Labor Movement. American Journal of Sociology, 106(2), 303-349.

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