Collective Bargaining

Collective bargaining is when workers negotiate with an employer as one group instead of individually, backed by the threat of a strike. A single worker asking for a raise has little leverage; a union speaking for thousands does. The 2023 UAW strike against GM, Ford, and Stellantis shows exactly how that leverage works.

Stand Up: The 2023 Autoworkers Strike

Key Terms

• Labor union: An organization that represents workers in collective bargaining over wages, benefits, and conditions.
• Collective bargaining: Workers negotiating as a group — backed by the threat of a strike — instead of one at a time.

Midnight, September 15, 2023

At midnight on September 15, 2023, autoworkers walked off the job at three plants at once — one belonging to General Motors, one to Ford, and one to Stellantis (the maker of Jeep and Ram). It was the first time the United Auto Workers (UAW) had ever struck all three of the “Big Three” automakers simultaneously. The union's new president, Shawn Fain, called it the “Stand Up Strike.”

The tactic was unusual. Instead of shutting every plant at once, the UAW started with a few targeted plants and threatened to expand the walkout, plant by plant, keeping the companies guessing. About 13,000 workers went out first, with the union representing roughly 146,000 workers across the Big Three ready to follow.

Why Workers Band Together

A single autoworker asking for a raise has almost no leverage — the company can simply say no. But a labor union changes the math. Through collective bargaining, workers negotiate as one, and their ultimate tool is the strike: withholding their labor together. A car company that can't build cars loses money fast, which gives the union real bargaining power it could never have one worker at a time.

This is exactly what economists mean by collective bargaining. The union bargains over wages, benefits, and working conditions on behalf of everyone, and the credible threat to stop production is what brings the employer to the table.

What the Workers Won

After about six weeks, the UAW reached tentative agreements with all three companies in late October 2023. The wins were substantial: general wage increases of about 25 percent over the roughly four-and-a-half-year contract (with around 11 percent up front), the restoration of cost-of-living adjustments that had been suspended back in 2009, and faster paths for temporary workers to become full-time. For hundreds of thousands of workers, collective bargaining delivered raises that individual negotiation almost certainly could not.

Supporters saw proof that unions can lift wages and conditions. Critics warned that higher labor costs could raise car prices or push automakers toward automation and lower-cost regions. Both points reflect the real economic debate over unions.

Unions, Then and Now

The 2023 strike stood out partly because organized labor is far smaller than it once was. In the mid-1950s, about a third of American workers — roughly 1 in 3 — belonged to a union. By 2023, the union membership rate had fallen to 10.0 percent overall, and just 6.0 percent in the private sector, near record lows. That long decline is one reason personal incomes have been shaped less by collective bargaining and more by technology and market forces in recent decades. The UAW's high-profile win reopened an old question: how much can unions still shape what workers earn?

The Bottom Line

On September 15, 2023, the UAW under president Shawn Fain launched the “Stand Up Strike,” walking out at GM, Ford, and Stellantis at once for the first time. Through collective bargaining — backed by the threat to expand the strike — workers won about 25% wage increases over the contract, restored cost-of-living adjustments, and better paths for temp workers, after roughly six weeks. The strike stood out because union membership had fallen from about 1 in 3 workers in the mid-1950s to 10.0% overall (6.0% private) in 2023, showing both the power and the decline of collective bargaining.

Comprehension & Discussion Questions

1. What is a labor union, and what is collective bargaining? Use the 2023 UAW strike to explain how they work.
2. Why does a single worker have little bargaining power, but a union has a lot? What is the union's ultimate tool?
3. What did the UAW win in 2023? Name at least two specific gains.
4. Union membership fell from about 1 in 3 workers in the 1950s to about 10% in 2023. Give one argument FOR and one AGAINST unions, drawn from the article.

Collective Bargaining Beyond the Factory Floor

The UAW's Stand Up Strike is one example, but collective bargaining shapes pay far beyond factory floors. Teachers, nurses, pilots, and grocery workers have all used the same tool in recent years: organize, threaten to withhold labor, and negotiate from a position of real leverage instead of asking one at a time. The math is the same in every case — a company that loses many workers at once loses money fast, and that urgency is what brings it to the table. That leverage fades the moment automation or overseas competition gives an employer other options, which is part of why 2023's wage gains are not guaranteed to repeat in every future contract. Underneath it all, a wage is still a price set by supply and demand for labor, the same dynamic Rapunzl's supply and demand game lets students run themselves, with a union controlling the supply side of the equation.

Collective bargaining is really a story about market power, the same story that shows up when a single firm has too much of it. A firm with monopoly power can set prices and terms because rivals can't discipline it — the flip side of workers organizing to counter an employer's leverage. Rapunzl's what is antitrust law sample walks through that other half of the story, and a market with a negative externality shows a third way prices can drift away from what's fair.

Wages, strikes, and labor costs also move real companies and real stock prices, which is exactly what students track when they build and manage a portfolio inside Rapunzl's stock market simulator.

From Rapunzl's Curriculum

This sample article comes from Module 35: Work, Trade & Technology, part of Rapunzl's full economics and markets curriculum for grades 6–12. The complete unit covers labor markets, technology's effect on wages, and global trade using the same real-event approach as the piece above, so a class that wants more can work through the rest of the unit inside the platform.