In this article, we use enterprise population‐level data to investigate the effectiveness of Chinese unions in improving employee wage and nonwage compensation. We show that the effectiveness of Chinese unions stems from a “collective voice” face rather than from a “monopoly” face. The empirical findings on the effectiveness of unions are remarkable: unions in the workplace significantly improve employee wage and nonwage compensation, along with employee training. Moreover, the presence of unions within the same region and industry generates positive spillovers for employee compensation. The unions in China do have “real” effects. (JEL J30, J50, J51, K31)