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Trade Union Density: Benefits and Risks

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Throughout most of the 20th century, trade unions have been an important actor that works to protect workers’ pay and benefits and represent workers’ voice, providing a balance of power between workers and employers. Union membership, typically measured at the employer level and at national level, is often expressed as the percentage of workers in the overall labour force who are members of a union (ILO Bureau of Statistics, 2010). 

Union membership is a key determination of the power of trade unions as a labour market actor. However, union membership density decline is a trend that is observed across many countries. This essay will explore the trends towards a fall in membership density and the reasons behind this decline and will then move on to discuss unions strategies to reverse decline by exploring the UK, Germany, France and Sweden. Although there are significant challenges, there have been achievements and successes made by unions in halting the downward trend in membership density.

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There has always been a debate about the universal employment relations patterns across different countries. Convergence theory suggests that there is a tendency for economy and labour market forces pulling different countries towards uniformity following a US pattern, in which unions decline is a manifestation (Visser, 2007). Research shows that in general, union membership has been on decline across various industrialized nations without signs of reversal, hence might confirm this theory. In 1985, 30% of workers in OECD countries were members of trade unions, the figure went down to 17% in 2017.

Retrieved from data of OECD (2018), showed changes of union density across the UK, Germany, France and Sweden since 1998. British unions find it impossible to stop the downward trend. During the 1980s, union density showed a sharp drop and started the longest continuous decline recorded; this trend continued and union membership reached all-time low since records began, 6.2 million in 2017. Collective bargaining coverage has also slumped and trade unions’ influence over governments has dramatically weakened, without signs of recovery. 

Germany also witnesses decline in membership density. Similarly, Deutscher Gewerkschaftsbund (DGB) – the umbrella organizations for unions, has observed sharp decline after the country’s unification in 1991. Despite having some of the largest unions in the world (Ver.di and IG Metall, each with approximately 2 million members), net union density is among the lower ranks in Western European countries (Fitzenberger, Kohn, & Wang, 2006). In 2017, the membership of DGB unions fell below the historic level of 6 million. 

Similarly, Sweden has also experienced a decline in trade unions’ membership despite having higher density compared to other industrialized countries. Swedish unions have experienced a gradual fall since the 1990s, followed by a dramatic decline from 2007 onwards (Frege & Kelly, 2013). In 2017, the level of union membership stood at 65.6%, fallen from 92.6% in 1998. France also experienced a fall in membership density in mid-1970s, but currently, density has stabilized around 9%. Among the countries mentioned, France is one with the lowest but most stable union density and experienced the slightest decline since 1998. In fact, France is the only country that saw a period of slight increase in membership density.

There are several explanations for the decline of union membership across different countries. The downward trend is due to interlinked cyclical and structural factors. Recent literature has found that union membership growth is procyclical. Favourable business cycle components, such as employment growth, price and wages inflation could lead to membership growth while a rise in unemployment could dampen union growth and density, with the exception of countries with strong and favourable institutions, such as Ghent system countries. There are also changes in the structural distribution of employment, where workers move from highly unionized to lowly-unionized sectors, therefore reducing membership density. 

The continuous trend towards privatization and decentralization, and the shift of employment from manufacturing sectors to private services sectors have negative implications for union membership. The UK’s union density decline has followed the changes of employment sectors distribution. Since 1970, the decline of manufacturing in the UK has been greater than any other OECD country. Workers in manufacturing fell from 7 million in 1979 down to under 3 million in 2011, while workers in service sectors increased from 17 to 23.5 million within the same period, and trade unions membership has been falling in accordance to this movement of the employment market. Similarly, Germany’s union membership density was affected by changes in labour force composition. 

The restructuring and privatization happening across highly unionized, traditional manufacturing industries led to the reduction of jobs in these sectors, hence undermining union membership. Evidence show that the continuous decline of membership density of DGB unions, such as IG Metall and IG BCE, is related to the decline of coal mining as well as the closure of manufacturing plants, while privatization and the shrinking of large, formerly state-owned enterprises contribute to the fall of union membership. The decline of union membership is also affected by changing workforce composition. In particular, the increased popularity of flexible employment contracts has undermined union membership density. 

Following the 2008 economic recession, the number of flexible employment contracts have rapidly increased and non-standard work, as a share of total employment, has grown significantly across many countries in the last decades, making up 14.2 % of the workforce in the EU countries in 2016 . This form of employment is often characterized by low-quality work, low pay, little job security, therefore highlighting the imbalance of power between employers and workers. Precarious workers are less unionized than their permanent counterparts and Schnabel and Wagner (2005) found that part-time workers have a higher probability of never joining a union. 

Temporary workers are often less likely to be unionized since their relationship with employers are short-lived and unstable, therefore affecting unions’ ability to recruit and maintain them as members. At the same time, temporary workers are reluctant to join unions due to fear of being punished or dismissed by employers, further hurting their job security and income. Furthermore, workers who are on temporary contracts are found to be widely spread among different industries of the economy, only account for minority at workplace or sectors. 

This poses a grand challenge for trade unions to organize and represent them in countries with industry-level bargaining like France and Germany. As the share of atypical employment becomes larger in today’s labour market, it is challenging for trade unions to maintain membership density. Young employees are also under-represented by trade unions. There is low level of unionization and fast decline of their share of membership, as observed across many industrialized countries. 

This could be due to the fact that young workers are more concentrated in precarious employment, making them more likely to be isolated from unions. Moreover, young people have limited knowledge about unions or see less relevance of unionization in their worklife . On the other hand, unions are also not engaging and attracting young people effectively enough, leading to low unionization among this group of workers. For unions, the difficulties in recruiting young workers as members pose one of the greatest challenges. 

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