Changes in Unionization Rates in Rich Countries, 1960-2010

Politics Matter
Changes in Unionization Rates in Rich Countries, 1960-2010
John Schmitt and Alexandra Mitukiewicz
Center for Economic and Policy Research
November 2011
http://www.cepr.net/documents/publications/unions-oecd-2011-11.pdf

Executive Summary

Researchers have offered several explanations for the decline in unionization. Many emphasize that "globalization" and the technological advances embodied in the "new economy"have made unions obsolete.

If the decline in unionization is the inevitable response to the twin forces of globalization and technology, then we would expect unionization rates to follow a similar path in countries subjected to roughly similar levels of globalization and technology.

Instead, for 21 rich economies, including the United States, what we see over the last five decades is a wide range of trends in union membership and collective bargaining. Union coverage (the share of workers whose
terms of employment were covered by a collective bargaining agreement) changed little and even rose slightly in a substantial number of countries, including the years since 1980.

Union membership (the share of workers who are members of a union) fell in most of the rich economies, but losses varied substantially from country to country. The United States experienced membership losses near the middle of the distribution, but started from a 1980 membership rate that was low by the standard of other rich countries.

These differences across countries exposed to broadly similar levels of globalization and technological change suggest that these factors do not mechanically determine national levels of unionization.

The broad national political environment, however, does appear to explain much of the observed variation in unionization trends.

Countries strongly identified during the postwar period with social democratic parties "Sweden, Denmark, Norway, and Finland " have generally seen small increases in union coverage and only small decreases in
union membership since 1980.

Over the same period, countries typically described as "liberal market economies" the United States, the United Kingdom, Australia, New Zealand, Ireland, Canada, and Japan " have generally seen sharp drops in union
coverage and membership.

Countries in the broad Christian democratic tradition, sometimes referred to as "coordinated market economies"or "continental market economies"
Germany, Austria, Italy, the Netherlands, Belgium, France, and Switzerland" typically have had outcomes somewhere in between the social democratic and liberal market economies, with small drops in union coverage and
moderate declines in union membership.

These patterns are consistent with the view that national politics are a more important determinant of recent trends in unionization than globalization or technological change.