How does the presence of a labor union change negotiations between employers and workers?

Labor unions are groups of workers who negotiate salaries and working conditions with employers. In a labor market, labor unions behave as a monopoly. They can easily negotiate higher salaries and working conditions with companies than any one worker. Collective bargaining is the process of negotiating between businesses and labor unions.

The size of a labor union influences the negotiations with a company. The larger a labor union is, the more bargaining power it has. Large labor unions have the power to negotiate with companies for higher wages and improved working conditions for their members. Workers in labor unions can go on strike and refuse to work if companies fail to deliver on their promises. This can have an effect on a company's production process. Because the labor union is the sole source of labor, it can demand any wage rate for its members. If the company has to hire employees, it must fulfil the union's salary demands.

The presence of a labor union affects employer-employee talks by forcing corporations to approach employees as a group rather than as individuals.