How did the Industrial Revolution effect the labor unions?

In a nutshell, the Industrial Revolution was a shift from a predominately agricultural way of life to a more urban way of life that was centered on wage labor. In the late 1700's, the majority of people worked on farms producing food. By the middle of the 1800's, that had shifted, and more people were working for wages by making consumer goods so they could pay for their food and other consumer goods.
Labor unions as we know them today have been in existence since the late 1700's, and the first unions were organized by skilled laborers. With the Industrial Revolution, as more and more people lived in cities and became dependent on wages for their basic survival needs, labor unions became more and more necessary, and more unions were formed to meet the different needs of growing numbers and types of workers.
To answer the question directly, labor unions became more necessary with the Industrial Revolution because more people were depending on the capitalist system to survive. Companies had to figure out how to make the most goods at the lowest cost, so they did everything they could to cut production costs, often to the detriment of employee working conditions. Staying in business and making a profit were the only goals of most larger businesses.
The employer-employee relationship became less and less significant because there were so many employees working in the mass production system, so workers were exploited. Employers had employees work long hours in very bad conditions because it was cheaper for the companies that way. The goals of labor unions were to improve working conditions and wages by bringing power to the workers, and that was more necessary with the increase of industrialization.
Labor unions realized that capitalists were wealthy because there were a lot of laborers. They formed a collective bargain, where the group as a whole would negotiate with the capitalist. However, there were two rules that when not followed, led to businesses closing. The group would need to ask for less than they produced. If this did not occur, businesses would lose their profits and go out of business. Also, the supply of workers must be low. When there are too many workers, businesses have to pay more wages. To pay the minimal amount as they could, businesses reduced the number of laborers.