Trade unions in Europe: Dinosaurs on the verge of extinction?

Claus Schnabel 18 November 2013

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For decades, public perception of trade unions has been that “they’re going out like a dinosaur”, as expressed by Bob Dylan in his song “Union Sundown” (released in 1983!). This would pose a problem for EU policy and the European social dialogue which rely on unions and employers’ organisations in regulating the labour market. Although the economic, sociological, and political science literature contains a reasonable amount of theoretical and empirical work on unions and their membership, relatively few stylised facts have emerged. In recent years, the availability of new international (panel) datasets has enabled researchers to gain additional insights into the development and the determinants of union membership and density in the EU (see, for instance, Checchi and Visser 2005, Schnabel and Wagner 2007, Ebbinghaus et al. 2011).

Falling union density

Using information provided by the ICTWSS Database (Visser 2013), Table 1 presents some trends in union density (i.e. union membership net of those outside the active, dependent and employed labour force as a proportion of wage and salary owners in employment). Over the last 30 years, density has fallen in all 17 European countries for which consistent data are available for long time periods. In countries like Germany, France, the UK, Austria, and the Netherlands, density has roughly halved since 1980, whereas union decline has been moderate in Spain, Belgium, and the Nordic countries. Interestingly, compared to 1960, density has even increased in Belgium, Denmark, Finland, and Italy. Density also differs substantially across countries. The most recent data for 2010-11 range from almost 70% in Finland, Denmark, and Sweden to about 8% in France. These data make clear that union density and its trends vary considerably across European countries, with no sign of convergence. They stand in stark contrast to conventional wisdom, in particular in Anglo-Saxon countries, that unions are about to become extinct everywhere.

Table 1. Union density in 17 European countries

Notes: 1 2010, 2 2008
Source: ICTWSS Database, version 4, April 2013; own calculations

Union decline: Some myths

Given this popular misperception, in recent research (Schnabel 2013) I have surveyed the empirical literature from various disciplines in order to shed some light on what we know and don’t know about unionisation and its determinants in advanced countries. Interestingly, there are relatively few robust stylised facts, and some seemingly obvious explanations for the decline in unionisation over the last decades do not hold on closer scrutiny. In particular, the following perceptions often found in the general public and the media have been debunked as myths:

  • First, union growth and decline is not mainly due to changes in the sectoral structure of the economy (like the shift from manufacturing to private services) and changes in the composition of the workforce, as indicated by rising employment shares of women, foreign-born workers, white-collar employees, and highly skilled individuals. The vast majority of empirical studies suggest that the contribution of sectoral and compositional changes to changes in unionisation has been relatively modest and smaller than widely believed.
  • Second, the economic globalisation observed in the last decades does not seem to have substantially undermined unionisation. Although globalisation can weaken unions’ bargaining power and, thus, their attractiveness to employees, unions may also benefit from globalisation, for instance, by serving as vehicles of insurance against volatile global market forces.
  • Third, the relationship between centraliation of collective bargaining and unionisation is open both theoretically and empirically – bargaining decentralisation thus does not necessarily imply deunionisation.

Stylised facts on unionisation

The empirical literature on unionisation points to some relationships and regularities that may indeed be interpreted as stylised facts.

  • First, the existence of a union-administered unemployment insurance – the so-called Ghent system found in four European countries – is associated with higher union density and smaller falls in density over time. It is no coincidence that among the 17 countries listed in Table 1, density is highest in Finland, Sweden, and Denmark, all of which have a Ghent system.
  • Second, unions’ access to and presence at the workplace play an important, positive role for unionisation. Union presence facilitates recruitment efforts and may create social custom and reputation effects.
  • Third, unionisation is related to the business cycle, with union growth being procyclical. In many countries a rise in unemployment tends to reduce union growth and density (but in countries with a Ghent system of unemployment insurance the reverse is the case).
  • Fourth, in almost all countries unionisation is positively related to public sector employment and to establishment size.
  • Fifth, younger employees are generally less likely to be unionised (but it is less clear whether the probability of being unionised follows an inverted U-shaped pattern in age).

Some union challenges

The empirical regularities identified above can be used to assess how unions will be affected by recent economic and social trends present in most countries. It is also tempting to speculate whether they will be able to cope with these challenges. As argued above, some trends like globalisation and the rising proportions of women, white-collar workers, and highly educated employees in the workforce, do not seem to have impeded union membership and density. These trends probably will also not pose serious problems for unions in the future. Similarly, given the mixed empirical evidence, it seems premature to predict that the trend towards decentralisation of collective bargaining recently observed in quite a few countries will go along with large-scale deunionisation. Due to the lack of long-term empirical evidence it also remains an open question whether changes in social values, rising individualism, and changing attitudes of employees towards unions have affected, or will affect unionisation negatively.

  • More important and empirically founded challenges for unions in most advanced countries seem to be demographic change (in particular, stronger and higher organised cohorts retiring from the workforce) and the difficult recruitment of young employees.
  • A major problem for the unions may also be that the employment share of the public sector, which is still a union stronghold in most countries, has been falling and may fall further in some countries due to privatisation, subcontracting, and the shrinking of the welfare state.
  • Another challenge comes from the rise in atypical employment visible in most countries, since quite a few studies indicate that part-timers and other atypically employed workers are more difficult to organise than other workers with stronger attachments to the labour market.
  • Since unionisation is positively correlated with firm size, the decline in the average size of firms observed in many countries may also undermine unionisation, in particular if a reduction in union presence at the workplace goes along with it.
  • Finally, in countries with a Ghent system of unemployment insurance like Finland and Sweden, the erosion of this system due to institutional changes poses a serious threat to union membership and density.

What can unions do?

Some of these trends working against unionisation, such as demographic change and the decline in the average size of firms, and cannot be influenced by the unions. Some other trends, however, may at least be dampened if the labour movement manages to exert some political influence and successfully oppose further privatisation, deregulation and reform of Ghent systems. In addition, there are still some large gaps in unionisation that can be filled by effective union organisation. It seems obvious that recruitment efforts should be (more) focused on young and atypically employed workers (in a few countries also on women), that upholding or increasing union presence at the workplace is crucial for keeping and winning union members, and that in general unions should probably open up to new social interests. Unions in Western European countries still do have a (small) chance to stabilise membership and density, not least because they are embedded in social, economic, and political structures that help sustain them. It may thus be premature to relegate them to a museum of extinct species.

References

Checchi, D and J Visser (2005), “Pattern Persistence in European Trade Union Density: A longitudinal analysis 1950-1996”, European Sociological Review 21, 1-21.

Ebbinghaus, B, C Göbel and S Koos (2011), “Social capital, 'Ghent' and workplace contexts matter: Comparing union membership in Europe”, European Journal of Industrial Relations 17, 107-124.

Schnabel, C (2013), “Union membership and density: Some (not so) stylized facts and challenges”, European Journal of Industrial Relations 19, 255-272.

Schnabel, C and J Wagner (2007), “Union density and determinants of union membership in 18 EU countries: evidence from micro data, 2002/03”, Industrial Relations Journal 38, 5-32.

Visser, J (2013), ICTWSS: Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts in 34 countries between 1960 and 2007 – Version 4, available at: http://www.uva-aias.net/208.

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Topics:  Labour markets

Tags:  trade unions, union density, union membership

Professor of Economics at the University of Erlangen-Nuremberg

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