This article draws on a comparative study of urban change and rank-and-file teacher rebellion in New York City and Chicago, to explore the contemporary dynamics of what Jamie Peck (2013) calls “austerity urbanism” and its relationship to a rebirth of a social justice, grassroots teacher unionism in US urban centres. Tracing the trajectories of one group of rank-and-file teacher dissidents in Chicago, it argues that municipal unions are uniquely situated to lead the fight against austerity urbanism and the crisis tendencies of contemporary capitalism. To do this, however, trade unions will need to be reinvented and a different form of working class politic forged, grounded both in and outside of the trade union movement. Only then may we see organized labour in North America contribute to a movement for radical and systemic change, which is key to building a more socially just urbanism and society more broadly. The case of the Chicago teachers is highly instructive for activists, both inside and outside of the North American labour movement.