With the rise of industrialization during the second half of the nineteenth century, the craftsman was made obsolete by factory production. Consequently, labor shifted from skilled artisans to unskilled workers who operated machines. This put a severe limitation on the independence and economic viability of the worker. In addition, because the requirements for working were lessened, the demand for certain professions plummeted, meaning that workers would labor for greatly decreased wages. Also, the new dependence on machinery meant that employers would have to fund investments in machines, usually by cutting wages. At this time, no laws existed protecting workers; this lack of legislation allowed employers to overwork and underpay the laborers, who were desperate for some employment. These factors initiated the rise of labor unions.

One of the earliest labor unions that had substantial membership was the Knights of Labor, founded in 1869. Led by Terrence Powderly, the organization attempted to consolidate labor. Their main issues were to acquire equal pay for men and women, initiate an income tax upon the wealthy, dissolve the federal banking system, and enact prohibition. This organization did not get that far, primarily because it did not believe in some of the more overt methods of achieving recognition, like the strike. In its prime, it did claim more than 700,000 workers and served as a signal to the public that labor would consolidate. As a response, federal employees gained an eight hour work day in the same year as the Knights' founding.

A later group, the American Federation of Labor (AFL) concentrated on more immediate objectives for its workers, like wage increases, set hours, and safety conditions. Under the leadership of Samuel Gompers, this organization used strikes and sit-ins to achieve their objectives. Often times though, employers would break these strikes by hiring scabs to fill the positions of the strikers. Other times, guards would be used by the companies to break strikes by force.

One such incident occurred at the Pullman rail car factory. After the management decreased workers' wages and initiated layoffs in response to the Depression of 1893, the American Railway Union, under Eugene Debs, called a strike. The strike grew until all western railroad workers were on strike. Federal troops were eventually sent to break the strike on the grounds that it impeded delivery of the mail. A violent confrontation resulted in which a few workers and strike breakers were shot. Journalists described the scene in such a way as to make union members appear to be anarchists. This combined with the indictment of Debs by the Supreme Court served to make the public very wary of the unions. Collectivism among the workers did increase though.

The labor unions did have some problems. One of which was the factionalism of many different groups who could not cooperate in order to present a truly united front against employers. Immigrants also posed a considerable problem. They were often used as scabs because they would not only work for lower wages but were less likely to join unions and were in an ever increasing supply. As a result, both the Knights of Labor and the AFL attempted to achieve immigration restrictions.

The success of labor unions was rather limited during the nineteenth century. During WWI, however, labor gained fixed wages and government regulation of conditions because war production became essential. The unions lost clout during the 1920s and the Depression when jobs of any sort were in great demand. Under the New Deal, the workers did finally gain a minimum wage and later an eight hour work day. During WWII, they also gained safety controls. After WWII, these benefits remained, but the overall power of labor unions has decreased somewhat recently. Now, politicians have started to realize the value of the unions in their coalitions. Other changes such as the closed shop and government arbitration of strikes have given the unions much more power within their respective industries. But, developments in robotics, now replacing many laborers, and the overall shift from industrial production to commercial services have diminished the demand for labor and thus the power of the worker.