According to Madheswaran, “ Labor Union is an organization of workers formed to promote the collective bargaining of wages, fringe benefits, job security and working conditions for employees”. The labor unions in the United States grew out of the needs to protect these common interest for workers. Labor unions grew in popularity in the nineteenth and twentieth centuries, with the advent of the industrial revolution, where a greater quantity of goods could be produced by factories in a lesser amount of time due to new advances in machinery.
With the advent of labor unions, employees could negotiate their compensation. One of the main concern of unions is, as with many other aspects of the employment relationship, nonwage forms of compensation and benefits. This can come in ways that have both positive and negative economic and social consequences. Richard Freeman and James Medoff’s seminal 1984 book What Do Unions Do? , demonstrates both the theoretical and empirical effects that these positive and negative aspects of labor unions have, in regards to employee benefits and other forms of non-wage compensation. In fact, What Do Unions Do? has largely shaped the last generation of research on the effects of labor unions on individuals, organizations, and society, and this continues to be especially true for the area of non-wage forms of
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Their strongest weapon is their right to stop work, should the negotiations fail. They use collective bargaining to fight for higher wages, better benefits and safer work conditions. Company executives don 't always agree with collective bargaining because it treats the entire workforce as equals and does not recognize the difference between workers who excel and thrive and those who perform poorly. They argue that compensating employees on performance is better for the company than compensating the