Most of it is marketing. Notice how hard companies fight whenever there is an attempt at unionizing a workplace.

My wife is a member of a nurses union and it is nice to have a contract with your employer (something all top executives have) instead of work conditions being at the whim of a manager.

A downside of most contracts is there is little room for performance bonuses - almost all contracts are based on time in the union and not performance. The effect is an A player and a D player all get the same wages and benefits. There is no reason a union contract has to be structured this way, but for some reason they almost always are based on time and not performance.