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Labor Unions’ Scope and Importance Essay (Critical Writing)

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Updated: Jul 5th, 2021


Labor unions have been viewed as important institutions that focus on protecting the interests of wage earners, specifically by improving their working conditions. In the 1950s, the United States’ industrial sector witnessed a considerable rise of unions that represented at least 30% of workers (Wunnava, 2016). Nonetheless, since the 1970s up to date, unions have declined significantly, thereby raising questions regarding their importance in contemporary industrial settings. Currently, in the U.S., unions take only a meager 10% of this country’s workforce. Such a decline may indicate that the role of unions in the modern workplace environment is weakening. Furthermore, workers employed in foreign countries experience challenges while trying to establish meaningful relationships with unions and employers. In this respect, it is crucial to critically examine the weakening scope and importance of unions in the present-day workplace.

The Role of Unions in the Workplace Today

Contemporary trade unions play a huge role in increasing the wages of unionized employees and improving their standards of working. According to Wunnava (2016), trade unions seek to enhance the welfare of employees by encouraging employers to offer fair compensation. In executing this role, unions usually influence organizations in different industries to set a standard pay for employees based on their academic credentials. As such, in most scenarios, as Wunnave (2016) reveals, unionized workers without degrees receive 5% more pay compared to their counterparts working in less federated industries. However, Jerch, Kahn, and Li (2017) have a different opinion whereby they regard this rise in the number of graduates with college degrees as contributing to a counterproductive role played by unions in contemporary industrial settings.

Furthermore, labor unions lessen the income inequality gap that exists in the modern-day business environment. According to Wunnava (2016), unions undertake this function by advocating for a reasonable increase in the earnings of low and middle-wage workers. In executing this role, alliances disregard the essence of raising white-collar workers’ wages. Nevertheless, this role has become counterproductive in the modern workplace environment since the continued reduction of the American income inequality over the past two decades compromises the need for investing hugely in some educational courses (Wunnava, 2016). This situation is accountable for the decline of unions in the U.S today.

Unions also play the role of influencing employers to cater to the healthcare needs of workers. As Culpepper and Regan (2014) indicate, unionized employees, pay 18% less for their healthcare bills compared to nonunionized personnel. As such, by helping workers to effectively improve their healthcare status, alliances demonstrate their vital role in the modern workplace environment. The goal of ensuring that workers’ medical demands are addressed efficiently in the U.S. could not be realized fully without the input of labor unions. As a result, despite the declining significance of workers’ alliances, it is crucial to appreciate this milestone made, thanks to their continued existence in America.

Moreover, trade unions ensure that unionized workers get more pensions as part of retirement benefits. As such, they foster the efficiency of safety nets such as the Medicaid program in the U.S. Nonetheless, Jerch et al. (2017) reveal that employers in the contemporary industries uphold the idea of facilitating the implementation of pension programs, hence diminishing the input of trade unions in achieving this duplicate goal.

The Principal Value of Unions and Challenges Presented to Organizations

Unions embrace the primary value of enhancing the effective resolution of conflicts between employees and employers. As such, the role of conflict management requires these bodies to act as bargaining representatives in negotiations that involve employers and workers. According to Wunnava (2016), unions value the essence of safeguarding the interest of employees as a way of promoting fairness in the workplace environment. Nonetheless, Culpepper and Regan (2014) point out that the U.S. government has been effective in implementing labor laws over the past few decades, hence differing with Wunnava’s (2016) claim that these bodies are valuable in contemporary times. In addition, present-day organizations have established efficient conflict resolution measures. As a result, the intervention of unions in the U.S. is less important today compared to the situation in the 1950s.

Furthermore, the effective application of labor laws has been viewed as a challenge to organizations. In particular, they have been forced to refrain from exposing workers to unsafe working environments. Proper management of human resources is identified as an important factor that facilitates the success of an organization (Wunnava, 2016). Therefore, since virtually all industries embrace the concept of employee satisfaction, organizations have improved human resources’ working conditions, including their compensation packages. Such benefits reduce instances of conflicts that may require the intervention of unions.

The Challenges Faced by Human Resources in Foreign Countries

Workers in foreign countries face an array of challenges in their course of establishing relationships with overseas management bodies and unions. For instance, according to Jerch et al. (2017), contrary to what they experience in domestic settings, the lack of awareness regarding laws that protect foreign workers from exploitation is one of the leading factors, which contribute to the witnessed difficulty of establishing meaningful interactions with unions and administrative agencies. In most cases, native workers have a better understanding of policies that stipulate their connections with management teams and trade unions. This situation is usually different for foreign workers who lack vital information regarding foreign workplace environments.

Employees in overseas countries are not aware of the level of protection offered by unions. As Jerch et al. (2017) assert, this situation makes it difficult for workers’ representatives to access foreign employees. Conversely, in domestic settings, it is usually trouble-free for workers to benefit from the representation of unions in negotiations (Jerch et al., 2017). In this respect, there is the need for unions and management to offer the appropriate information regarding unionization to natives and foreign workers. This approach should encourage overseas personnel to form or secure membership with independent unions, hence boosting the efficiency of relationships between workers and employers.

Moreover, the level of income offered to overseas staff in particular industries is also a factor that undermines their relationships with administrative bodies and trade alliances. As Jerch et al. (2017) reveal, low earnings offered to foreign workers significantly affect their financial well-being, thereby denoting the failure of unions to secure their interests in overseas workplaces. As such, such poor compensation packages tarnish not only the relationship of foreign workers with employers but also their prevailing association with unions since they fail to protect them from exploitation.


Trade unions play a vital role in safeguarding the interest of workers. Nonetheless, the decline of trade unions suggests that their scope and importance in the contemporary workplace environment are diminishing. This deteriorating principal value of unions is an indication that governments and organizations have taken up the role of facilitating the effective implementation of labor policies. However, unlike the situation in domestic countries, foreign workers experience poor relationships with management bodies and unions due to the lack of awareness regarding labor laws and income inequalities. Therefore, it is crucial to support the operations of trade unions in modern-day industrial settings.


Culpepper, P. D., & Regan, A. (2014). Why don’t governments need trade unions anymore? The death of social pacts in Ireland and Italy. Socio-Economic Review, 12(4), 723-745.

Jerch, R., Kahn, M. E., & Li, S. (2017). The efficiency of local government: The role of privatization and public sector unions. Journal of Public Economics, 154, 95-121.

Wunnava, P. V. (2016). The changing role of unions: New forms of representation. Abingdon, UK: Routledge.

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