The rise of big business led to the formation of labor unions in at least two ways.
First, big businesses had more leverage over workers than little shops did. Therefore, workers felt that they needed to get leverage of their own. For this reason, they tried to form "big labor" to combat "big business."
Second, the rise of big business led to lower pay and poorer working conditions for workers. Jobs at the large companies were typically low-skilled. The companies were also competing ferociously with one another and therefore needed to reduce costs as much as possible. These factors led to a situation where wages dropped and conditions deteriorated. This led to a desire to form unions to rectify the situation.
The rise of big business led to the formation of labor unions. Before big businesses formed, people worked in small, worker-friendly environments. The owners and workers knew each other as well as their families. It was much easier for a worker to make a request, say for time off or for higher pay, and have the request granted in this type of environment.
Once big businesses formed, this relationship changed. There were hundred or thousands of people working in the factories. The owners didn’t know the workers and vice versa. The managers reported to the owners and also didn’t know the workers. Working conditions were bad, hours were long, and pay was very low. There was little to no concern about the workers and their needs. If a worker tried to make a request for improved working conditions or for higher pay, they might be fired. The requests were almost always denied.
Workers realized that to have any chance of changing things, they would have to act collectively. Thus, unions were created to help the workers try to improve their situation. Only if all the workers took an action or made a request would conditions possibly change.
In the beginning, unions weren’t too successful in accomplishing their goals. There were no laws protecting unions, and the courts generally sided with the business owners. However, without organizing unions, workers had a little chance of improving their conditions.