It has come to my attention that many people don't really understand what unions do very well and as such I think the easiest way to explain how a union works is through an example using something that isn't far removed from an individual to demonstrate the two primary purposes of a union:
- To capitalize on opportunities through monopolistic contracts.
- To advocate for better rights and treatment for the members.
So let's begin:
There are five children in your neighborhood, Joe, Sarah, Farah, Benjamin and Jamie. These children all mow lawns and come to your door every week with an offer; depending on what they are saving up for the price changes, so some weeks Joe is cheaper than Sarah and others Farah is the cheapest with Jamie being the most expensive. You only need one person to mow your lawn so you can't pay them all to do it every week at every price.
Now let's assume that joe and Benjamin get to talking and realize that they are undercutting one another by accident and set up a meeting with the other children in your neighborhood; they all agree on a price for the service that is the median value of their desires with a bit more added on top so that they can split all deals equally amongst themselves no matter who does the work. Benjamin is the most well spoken so he becomes the salesperson who lets you know and collects a small fee for doing this but ultimately everyone is better off.
A few years pass by and a few more kids move into the neighborhood or grow up to an age in which they can mow lawns. Benjamin calls a meeting and explains the issue that they face: Competition. Cleverly the kids now contract their services to you; instead of you paying once every occurrence you now have a contract that states you can only go to them for the service and they are obligated to complete the service for you. Now keep in mind that by contract even if young William is willing to cut your lawn for less you cannot allow him to do so and so William is pushed out of this deal unless he joins the union, or rather, he's going to have a tough time in the neighborhood because there are probably one or two households that did refuse to sign the contract but that's far fewer than the total market.
Anyway the kids in the coalition eventually grew up and moved on with their lives and the annual contracts lapsed and the world carried on. The end.
So to recap every week someone would come to your door with a price, low or high, and you had the option to take the lowest price; by normalizing the price the small union works in everyone's favor so long as the price was tolerable to pay for you, but also the most important piece was the contract of service. By locking an annual contract of service the work revenues are guaranteed; this is the main value of a union. This is not about “good or bad” but rather “smart and dumb”; the contract, if breached, often has monetary rewards attached so if you hire out the work to someone else you have to pay the union anyway which disincentives doing that.
Unions are collective monopolies. This is not a bad thing. I am pro-union but that does not mean that all unions are created equal or that all unions are necessarily pro-constituents. As you can above that is a business model; let's change the story to show how corruption works in the system if one is capable of convincing the others to allow it:
Same five children but Benjamin, who is better at math than everyone else alongside being eloquent, convinces everyone to give him a larger fee. Here's some stats to consider.
- On average everyone made about $11 per lawn.
- The fee for the union dues is $3 paid to Benjamin for his work at ambassador.
Let's say that Benjamin negotiates the rate of $13.00. This means that on average everyone but Benjamin makes $10 per lawn and Benjamin actually makes more than $13 for each lawn he does because the union dues of $12 go to him. You could also think of this as Benjamin is getting a cut of every lawn completed versus only the lawns he completes. Benjamin's making more than his constituents including a free unclaimed dollar in value that he is also taking from you, whom he discussed the contract with, which effectively screws everyone in the whole system but him.
The point here is that unions can be a force for good but they are businesses and the people who are most savvy at business tend to be the ambassadors in the union which puts everyone else who isn't doing the math or sitting in the meetings at a major disadvantage. The above example is simplified of course but the moral of the story is that there is no automatic “good” or “bad” position to take with these matters. A choice to unionize is never a bad one if you are certain that everyone is better off and you ensure that there are limited methods of extortion and corruption but the assumption that unionization instantly makes you better off is not a good one. There are, in fact, some unions which have become mega conglomerates in order to survive much like any business so there is an incentive for them to act in their own self-interest and many times over not a business which may start with good intentions down the line becomes corrupted or politically unstable due to the passage of time and generations where intention deviates from reality.
Anyway, that's the short version of what a primarily union does.
TL;DR: ALWAYS READ YOUR CONTRACTS