While their methods may be fundamentally similar, public and private unions each serve a distinct realm of the economy. Private unions represent the interests of workers in the private sector, which is made up of members who work in non-governmental industries. These unions seek to protect the rights and interests of workers from corporate abuse. On the other hand, public sector employees, such as teachers, police officers, postal services staff, and other government workers, are represented by public sector unions.

Perhaps the greatest quantifiable difference between private and public union are their rates of membership. Membership percentages have historically fluctuated, with private membership rates peaking in the 1940s, during which around 33.9 percent of all private sector employees were unionized. Public union membership was low during the golden years of private unionization, rating at only 9.8 percent.

Today, however, those numbers are almost reversed. 2016 research from the US Bureau of Labor Statistics places public union membership at around 34.4 percent; according to the data, public unions represent 27.4 percent of local government employees, 29.6 percent of state employees, and 40.3 percent of federal employees. In contrast, today’s private unions encompass only 6.4 percent of private sector workers. Although the membership rates are disparate, private unions still maintain a slight lead in total member count (7.4 million) over public unions (7.1 million).

Part of the historic and current gap between membership ratios of private and public unions may be explainable by the laws regulating both. Private unions are regulated by the Wagner Act, which legally enshrines the rights of private workers to form trade unions and bargain collectively. Public unions are excluded from the Wagner Act; they are instead regulated through a combination of state and federal law.

Public and private unions also differ in who they bargain with and who their bargaining affects. Public unions negotiate wages and employment terms with state and local legislatures, as their employment is government funded, which in itself may be a conflict of interests. The law allows public sector unions to contribute to and work for the election of those legislators. Many states and municipalities have funding deficits for public sector pension and health plans, as do private sector plans. The difference is the taxpayers who the legislators represent are the same ones who sign off on the collective bargaining agreements.

The reduction in the level of private sector union representation could be partially explained by the fact that in today’s global economy, excessive bargaining for better compensation in the private sector would put employers at a competitive disadvantage, which would hurt private union workers more in the long run. Employees in state and local governments face no such pressures; however, negotiating raises in public sector compensation can increase the price of government services.