Yes, if you share a Google account everyone will see exactly the same as you do. However, it's not recommended for many reasons. One of which is that if your colleagues are in different locations at the same time Google might become suspicious of hacking and block access.
At the moment shared folders are the recommended way. Please note that papers can be in multiple sub-folders, so they pretty much behave like labels. So it might be an option for you to organize a shared folder in sub-folders.
That said, we have concrete plans to improve the situation and allow users to share their complete library including labels with others.