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Benefits and Drawbacks of Unionization

Most workers in different industries are members of labor unions, which they use as a tool for ensuring better payments and working conditions. While unionization has several benefits for both employees and employers, it is also associated with various disadvantages. Unionization ensures higher wages and greater equality for the employees. Labor unions are organized entities that bargain with companies for higher wages on behalf of their members. The salary for unionized workers in Canada is 23 % higher than that of those who are not union members (Canadian Union of Public Employees, n.d.). Unions minimize remuneration disparities among the employees due to gender, age, or race (Mundlak, 2020). Labor union members have access to pension and other benefits and enjoy job security. Workplace pension, health insurance cover, and annual leave are guaranteed for unionized workers. The latter is also likely to be full-time and permanent employees. Unionized employees enjoy safer working environments, predictable working hours, and training and education (Mundlak, 2020). They report safety and health violations by employers, making their workplaces safer for all. The unions prioritize training to facilitate the growth and development of skills for their members.

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Employers enjoy the advantage of standardized wages and the reduction of workplace turnover. The contract between companies and the labor unions stipulates the salaries received by different types of employees; depending on the job they perform (Mundlak, 2020). Additionally, it details organizations to increase salaries and benefits that workers should receive, alleviating the continual wage negotiation with individual employees and simplifying payroll management tasks. The benefits received by unionized workers make them stick to their current employers, eliminating disruptions caused by workplace turnover and costs for hiring and training new employees (Mundlak, 2020). Organizations also experience improved productivity due to the unionization of their workers. As noted earlier, employee turnover reduces, ensuring that the most experienced workforce stays on the job, guaranteeing high productivity. Further, unionization encourages compliance with safety regulations and formalizes employee-employer communication (Mundlak, 2020). Enhanced safety is advantageous to companies because it improves their reputations and minimizes the possibility of fines and lawsuits due to occupational hazards. Unions create platforms employers and employees can raise issues and solve their problems.

Nevertheless, labor unions impose costs on their members, limit their freedom, and cause adversarial between them and their employers. Union membership financial costs may include dues and fees for joining the organizations (Mundlak, 2020). Such costs may be unfair to people who are forced to be union members as a requirement for employment and ideological objection to the associations and are unwilling to comply with the conditions to pay dues and fees. Workers lose their ability to negotiate pay and benefits for themselves once they join unions (Mundlak, 2020). The collectively bargained pay may not be in their best interest, and they are not free to decide whether or not they want to participate in strikes. Unions with a history of contentious relations with employers make their members less cooperative with companies than other workers.

Equally, unionization is disadvantageous to employers because it increases labor costs, risks for lost production and lawsuits, arbitrations, and reduces human resource control. The unions’ collective bargaining for higher wages, employee benefits, and working conditions leads to increased production costs, reducing profitability (Mundlak, 2020). Unionized workers are legally allowed to strike if their employers do not agree to the wage, benefits, or workplace policies they request. Companies incur direct costs due to lost production and other indirect expenses associated with problems, such as decreased sales caused by strikes. Firms with an organized workforce are prone to increases such as actions as demotion, discrimination, harassment, and lack of promotion. Employers lose their ability to promote workers based on merit or productivity since unions emphasize seniority. Additionally, they limit employers’ options for dealing with poor performer workers.


Canadian Union of Public Employees. Top 10 Union advantages. CUPE. n.d. Web.

Mundlak, G. (2020). Organizing Matters: Two Logics of Trade Union Representation. Edward Elgar Publishing.

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