Labor Unions Impact in the New Global Economy


Throughout the world’s history, labor unions have always played a central role when it comes to fighting for employee’s basic rights by negotiating with employers for better working conditions and remuneration packages.

Generally, the principal purpose of any labor union is to make sure that its members get the best returns from their jobs, under the best working conditions.

The history of labor unions can be traced back to ancient times when workers like carpenters used to form guilds, which fought for their rights. It is from these guilds and other localized forms of labor unions that present unions came to exist.

Unlike in the past, for example, during the industrial revolution time when the membership and influence of labor unions was not that pronounced, presently, the primary voice of most workers is their labor unions, because it is these unions that are actively involved in the struggle to make sure that every worker’s efforts are appreciated.

In addition to this, the same labor unions are also actively involved in creating active and open channels of dialogue among employer and their employees. A labor union is an association where workers and union leaders are united for the promotion of a common goal.

The union creates a kind of synergy that can be used effectively by workers to voice their demands (Beik, 2005, pp. 3-17).

Therefore, as a result of the significant and purposeful roles that organized and unionized labor play more so in the present globalized world, it will not be wrong for one to conclude that they are the voice of any worker, more so when it comes to articulating for workers’ rights.

Impact of Labor Unions in Present Economies

Nowadays, unions are seen as parties that are dividing any other organization into two sides, mainly “us and them.”

To most owners of the means of production, this is seen as a way of killing the whole idea of cohesiveness that should exist in all organizations as well as creating a belief of entitlement in the minds of employees.

This is because, over the recent past labor unions have been actively involved in fighting for the rights of those they represent, with little regard of the economic or financial status of an organization.

As a result of this, nowadays most business owners have started to move their businesses to countries that don’t have unions or those with weak labor unions to run away from the taunting demands of such unions.

Although labor unions are seen by many as a threat to their business, especially if they are business owners or managers, one thing that these parties forget is that the formation of such unions has been brought about by their actions.

Over the recent past, although a country like China was considered to be the best alternative economic hub for investing as it had weak labor unions, nowadays with it’s numerous and strong workers’ unions, one cannot elude the wrath of labor unions.

Therefore, with the recent changes in the face of labor unions, currently, investors in nations such as the USA and China are now facing numerous challenges since unions are key players and decision makers in the labor industry (Estlund & Gurgel, 2012, 1-22).

Labor Unions in the USA

In the US, the company Hostess Brands, a company known for its iconic chocolate bar the “Twinkie,” was driven to bankruptcy in 2004 as a result of continued standoff between its management and union workers.

Even after the restructuring and rebranding of the company that took place after it had filed for bankruptcy, the same old union woes started, contributing to the company’s going into liquidation again (Merced & Greenhouse, 2012, p.1 and Berfield, 2012, p.1).

Other companies such as Wal-Mart are also facing the same dilemma, because of the numerous tussles with its unionized employees who from time to time come up with new demands.

These two examples are clear evidence of the power enjoyed by labor unions, as they are the spokesman of their members when there is need.

It is worth noting that, labor unions are useful when it comes to fighting free market capitalists who have started to thrive as a result of the dwindling level of workers who are joining unions.

In present economies, because the level of inequality has risen to abnormal levels, most workers’ rights are sometimes neglected openly as most organizations consider the reduction of employees as a benefit.

On the other hand, because most companies are presently technologically advanced, the level of human labor that is needed by such businesses is reducing at a very fast rate.

In this regard, although in the future unions may have some power over employers, such power will be limited, because of the dwindling number of employees who may be allowed to work in different sectors of the economy (BLS: Bureau of Labor Statistics U.S., 2012, pp. 1-4)

Labor Unions in Europe

In Europe, the growing level of problems against labor unions has increased over the recent past, because of the diminishing numbers of registered union members. This case has been made worse by the present economic and political turmoil that has affected most European nations.

Presently, there is a silent trend going on in Europe called ‘deunionization,’ which entails removing union workers from companies. With deunionization and reduction in unions’ membership, labor unions in Europe are now looking at welfare states for their survival.

However, although trade unions are losing their power, through collective bargaining agreements and state intervention, they are still able to influence employers into beneficial agreements for their members (Ebbinghaus, 2002, pp. 2-4).

On the other hand, as a result of the numerous changes that are taking place in Europe’s labor industry, presently most unions have to dig deep into their business ingenuity minds to survive.

For example, nowadays, some unions have opted to provide collective insurance schemes as added services. Also, the trend of trade unions has shifted towards state welfare reforms through acting like non-governmental organization.

Through this, unions have been afforded a chance of championing for the rights of both present and former wage earners against adverse government policies that may be detrimental to them (Ebbinghaus, 2002, pp. 4-11).

Labor Unions in Africa

As research studies show, the level of trust put into trade unions in most African countries such as South Africa has plummeted drastically. Over the recent past, the number of people who do not believe in a trade union in South Africa has risen to almost 35%.

Majority of workers do not trust unions, because they feel that such unions do not truly represent their plight effectively.

This was evident during the postal office strike that happened in South Africa, where union workers chose not to be represented by their union chiefs and instead hired their lawyers.

The same case has been replicated in other African nations; hence, presently, labor unions are slowly losing meaning as they are losing more members daily (Paton, 2013, p.1)

What is next for Unions?

As a result of the level of power that most labor unions enjoy in the present societies, nowadays most individuals are faulting labor unions for the fall of most global organizations.

Also, although union membership seems to be reducing, unions still hold millions of members to a level that in some counties they are major players when it comes to determining the political landscape of such nations.

Although this is the trend in some counties, in the United States and other nations, their influence is diminishing slowly, because currently, union membership has declined to very low percentages.

Therefore, unless union leaders go back to the drawing back and formulate better strategies of encouraging the registration of more members, chances of the power that is enjoyed by labor unions dying finally are high.

To do this, there is a need for the leadership of unions to formulate better ways of dealing with the present changing global realities (Schramm, 2005, pp.1-6).


In conclusion, although the current trend shows a great drop in union membership globally, as a matter of fact, trade unions will never cease to exist, because of the differences that always arise in workplaces; hence, requiring the intervention of a workers’ representing body, which in this case is a labor union.

Also, considering that most unions are currently involved in the process of finding ways of increasing their membership, labor unions may, in the long run, gain back their glory and shine as they used to be in the past.

Reference List

Beik, A. M. (2005). Labor Relations. Wesport, CT: Greenwood Press.

Berfield, S. (2012). Walmart Vs Union-Backed our Walmart. Web.

BLS: Bureau of Labor Statistics U.S. (2012). Union Members — 2012. Web.

Ebbinghaus, B. (2002). Trade Unions’ Changing Role: Membership Erosion, Organizational Reform and Social Partnership in Europe. Web.

Estlund, C., & Gurgel, S. (2012). A New Deal for China’s Workers? Labor Law Reform in the Wake of Rising Labor Unrest. Web.

Merced, M. J., & Greenhouse, S. (2012). As Labor talks Collapse, Hostess Turns out Lights. Web.

Paton, C. (2013). SA Workers ‘Losing Faith’ In Strife-Torn Trade Unions. Web.

Schramm, J. (2005). Exploring the future of Work: The Future of Unions. Work Place Visions 4, 1-8. Web.

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1. LawBirdie. "Labor Unions Impact in the New Global Economy." March 22, 2023.


LawBirdie. "Labor Unions Impact in the New Global Economy." March 22, 2023.