ELI5: What are unions, how are they formed and why do companies hate them?

From the employer's point of view, unions are a collusionary tactic that gives labor the capacity to act like "trusts" (in the meaning of the Sherman Anti-Trust Act, which prohibited price collusion by multiple members of the same industry on the open market).

An argument against unions would be "they incentivize behavior that is illegal for corporations to participate in, by setting prices on the open market".

Arguments for unions include "the employer is already a monopoly for employment, particularly if it's a large enough influence on the area economy; it is necessary to provide a means to balance the power and allow people to form their own structure to ensure they're not abused, as a means of reducing government interference and oversight in specific industries that would mandate certain ways of doing business."

Ultimately, unions end up setting up a secondary set of regulations that must be followed, enforceable by civil litigation as well as potential labor refusals (strikes) when acceptable terms are not agreed upon. Nothing in the union contract can require anything that is against the law -- but it can enforce a particular, predictable mode of interaction to reduce apparently-arbitrary or discriminatory pay, job description changes, or disciplinary actions.

Almost all states are "right to work" states, meaning an employee can work in a union shop (that is, "for an employer who has an active contract with a union that oversees the employer's relationships with its workers") without being part of the union, and without having to pay dues to the union. That said, a union membership typically brings better benefits in such things as stable employment and job security for the worker. Employers dislike this because it shackles them from disciplining for arbitrary, off-the-cuff things.

There are upsides and downsides to unions. Realistically, though, if a company wanted to bust a union, all they'd have to do is treat the people who aren't part of the union better than the members of the union, until enough people jumped ship that the union lost its collective bargaining position. The downside to this is that there would suddenly be nothing preventing the things that the union contract protected against, and there would be nobody left with enough information on how to form a union to reorganize when their company looks at trying to increase its own profit and cutting wages for its workers, with no union protecting its employees. Like Walmart.

/r/explainlikeimfive Thread