Are Trade Unions In Terminal Decline?

To understand why trade union density and power have declined in the last thirty years and judge the permanence of this decline involves looking at what has changed both at the level of the relationship between the trade union and the workers who have ceased to be members, and in terms of the framework that trade unions operate within. Rational reasons for union membership have declined in both Europe and the US in the face of stricter inflation regimes, substitute institutions and a decrease in the job opportunities available in unionised workplaces, with the social solidarity that both stems from and supports strong trade unions falling as a result of this and contributing to further decline. At the same time, the reduction in tacit support and complementary institutions and pervasive neoliberalism has undermined the legitimacy of collective action. However, the very fact that the political climate has shifted so quickly away from collective solutions also makes the possibility of swings in the institutional landscape in the other direction viable, and medium term trends for European integration as well as more recent macroeconomic changes make the future direction of trade union strength uncertain.

The decline in membership of trade unions since the 1980s throughout Europe and the US can be partially understood as the result of a reduction in the tangible benefits to members of paying fees to be part of a trade union, undermining the instrumental-rational basis for this variant of social action (Ebbinghaus et al. 2011). The closure of manufacturing plants and nationalisation of public sector workplaces previously covered by collective bargaining agreements has meant higher numbers of workers not covered by such agreements, and thus not able to employ the logic of collective action to raise wages. The incentive to organize may also be lower in the public sector where competitive product markets mean less economic rents for collective action to capture (Checchi & Lucifora 2002). Additionally, low inflation has reduced the importance of trade unions in fighting real wage falls, while central bank intolerance of inflation and threats to increase interest rates in the face of wage increases, has dampened prospects for negotiating beneficial wage settlements (Crouch 2000).

The higher trade union density in countries with 'Ghent' or quasi Ghent systems of trade union administered unemployment insurance highlights the role of tangible benefits in maintnating union strength. Ebbinghaus et al. (2011) have noted that the symbolic association between unions and insurance means that members incorrectly perceive that membership is necessary to receive benefits, even when this is not the case. This is certainly one of the reasons why trade unions in Nordic countries have been uniquely able to build up membership in the private sector (Crouch 2000). Under Belgium's partial system of optional union administered insurance, the workers who are most vulnerable to unemployment are most likely to join trade unions; this, in conjunction with the widespread decreases in job security throughout the OECD discussed below, may explain why Belgium has seen such moderate changes in union density (Ebbinghaus et al. 2011). The embededness of trade unions with the welfare state in some form in most of continental Europe has lead Crouch (2000) to suggest a floor on the extent to which unions can decline as long as these instutional arrangements persist. However, the extent to which unions as providers of social insurance appear able to limit their weakening is also limited. For although density is still higher on the continent is has been declining along with that in the US and Britain, while the ties between trade unions and voluntary unemployment schemes have weakened as alternative providers have emerged. Moreover, the US has seen substantial declines despite the tangible benefit of pension coverage, highlighted by Freeman's (2005) findings in 1985 that `83% of union workers had pension coverage compared to 39% of non-union workers.'

Part of the reason for this is the development of substitute institutional mechanisms claiming to offer workers the financial benefits of trade unions as well as alternative voice mechanisms, which to some extent have further undermined the rationale for union membership. When comparisons are made across countries higher levels of statutory employment protection legislation, universal extension of previously collectively bargained norms and indexation decrease union membership ( Checchi & Lucifora 2002). Where states have created economic substitutes, employers have provideded substitute voice mechanisms, allowing 'participation through employee involvement committees (and) joint consultative councils' (Freeman 2005). Again, however, the relationship between legal substiutes and trade unions is complex. Increases in employment protection legislation occurred alongside the widespread growth of union strength prior to the late 1970s, and some of these type of mechanisms seem to support union strength: Checchi & Lucifora (2002) find the existence of a minimum wage to be positively correlated with union density. Part of the reason for this is likely to be because substitute policy, where it represents support for labour over capital, is likely to be put into place in conjunction with complementary insutions that create a generally pro union climate (Crouch 2000). The problem for union membership in recent times is that complementary institutions have been removed, reflecting the general political climate which will be discussed in more depth below.

At the same time, management practises which complemented the provision of benefits to union members have also disappeared. While centralized pay negotiations are more effective in raising wages (Checchi & Lucifora 2002), trends towards decentralised managerial structures and greater autonomy of managers have made this more difficult to achieve. (Bryson et al 2000) emphasises this as playing a big role in the narrative of German trade union decline. Overt management hostility to union membership, which is partly a result of a shrinking public sector, is also important in this respect, with Freeman (2004) estimating 25-50% of union decline is attributable to this. Reversal of earlier employment protection legislation, now without trade union strength to prevent lowering standards, has lead to increases in poor quality employment, incorporating imposed flexibility, and imposed self employment. Such forms of precarious employment in turn make organizing more difficult and have so far hindered union revitalization (Crouch 2000). If the effects of public sector redundancies in light of current macroeconomic instability are the same then further decline seems likely.

However, there is another dimension to trade union involvement which is social and which has interacted with these economic factors to create the decline and will also impact on future prospects. Critics of crouch have located union density decline in a 'loss of worker interest in organizing' (Crouch 2000), highlighting the fact that unions are social instutions as well as economic ones (Freeman 2005). Certainly as membership begins to shrink, 'value rational' (Ebbinghaus et al. 2011) reasons for membership, centered around being part of a movement, seem likely to decrease. Checchi & Lucifora (2002) note that if comformity is valued, high density will be self reinforcing. We can understand the reversal in recent times as a negative feedback mechanism, in line with the implications from social custom theory that any employee is more likely to engage once others have done the same.

This has been reinforced beyond the workplace, decreasing social capital has undermined co-operative behaviour, making it harder for democratic instutions to function. (Ebbinghaus et al. 2011) finds that the level of social capital is closely correlated with organized labour, while Putnam (2000) has argued extensively that it is declining (Bowling alone). The two types that Putnam discusses are informative in explaining both the failure of labour to organize effectively and to get public support when it does. The decay of bridging capital between groups may well be part of the explanation for public opposition to strikes when they are successfully organized, as Kaminska and Kahancová (2011) highlight in the case of hospital strikes in Poland. At the same time a failure of bonding capital to allow solidaritistic associations between employees clearly makes collective action more difficult. Demographic trends in the workplace may have made this more difficult; Checchi & Lucifora's (2002) findings that a country's trade union density rises with the share of the workforce that fit into the category of 'male, manual (and) manufacturing' can be understood in the context of the lack of social cohesion necessary to organize collectively as a trade union.

What is significant about these social changes however is the prescri ption for renewal which they imply. While influencing government policy is hard for weak unions, working to reconnect workers with each other and society appears easier to achieve. This is evidenced by the success of Working America in the US (Freeman 2005) and Community in the United Kingdom, unions which have grown their membership without offering tangible economic benefits. This may imply that centralized bargaining is in fact not part of the future role of trade unions, supported by Putnam's (2000) contention that participation in democratic institutions by proxy is inferior in social capital terms to decentralized involvement.

This social role is related to the political significance of trade unions, in which the decline of organized labour is linked to the rise of neo-liberalism and inflation targeting rather than demand management, removing the implicit support for collective mechanisms for increasing wages. Kaminska and Kahancová (2011) highlight the situation in central and Eastern Europe, characterised by 'The common perception of unions as belonging to the 'old' system . undermined union identity and legitimacy.' This is an important factor in the UK, US and Eurozone countries as well, where a change in the political consensus following the end of socialism in Europe, and the post ideological consensus that has followed it. Crouch has noted how the set of institutional arrangements designed to moderate inflation means that the 'general onus of economic adjustment is thrown onto labour.' That tacit support for organized labour has given way to tacit support for managerial resistance to unions is supported by findings that this opposition prevents otherwise pro union workers from joining trade unions (Freeman 2005). It is explained by the 'bad side' of union activity which means economic rents are shared with employees and therefore lower than they would be otherwise (Checchi & Lucifora 2002), which is incompatible with institutional arrangements designed to maximise economic growth. The lack of union influence in politics despite increased campaigning efforts noted by Freeman (2005) is both a result of and contributing factor to the arrangements which have contributed to decreases in union density.

That these broader socio-economic factors have precipitated decreases in the power and scope of the trade union movement suggests that the future of trade unions is therefore linked to the economic and political arrangements which are chosen following current macroeconomic changes. History supports this contention; Bryson et al. (2011) note the 'premature declaration of the death of US trade unions by the president of the American Economic Association, a year prior to their incredible revival in the Roosevelt era' . Similarly to the situation in the 1930s, Keynsian fiscal stimulus has appeared recently on the political agenda, albeit dampened by concerns for public sector debt, and inflation has taken on relatively less importance. The link between collective bargaining and income inequality is also important. Freeman (2005) finds that the movement from collectively agreed to 'decentralized market-driven wage determinination' results in an increase in inequality, implying that institutional arrangements centered on reducing inequality rather than promoting free markets would be likely to include trade union involvement. Crouch (2000) notes the potential of trade unions to provide 'mechanisms for consensus' in light of the impotence of other policy tools in the wake of monetary union, and this seems more pertinent in light of the resistance to government spending cuts in countries including Greece. Similarly, pressure on the public sector has decreased employment in that sector throughout Europe, but has also increased industrial action and left wing political protest, which involves many of the same actors that would be expected to be part of the labour movement (Ebbinghaus et al. 2011). This could create the social capital necessary for strengthening trade unions in the longer term. What is clear is that trade unions are dependent on the institutions that support or hinder them, and that the future of unions is thus dependent on which institutions become most important in repairing capitalism following the current macroeconomic crisis.

References Bryson, A., Ebbinghaus, B. & Visser, J. "Introduction: Causes, consequences and cures of union decline" European Journal of Industrial Relations, 17: 97-105, June 2011

Checchi, D. & Lucifora, C. "Unions and Labour Market Institutions in Europe", Economic Policy, 35, October 2002

Crouch, C. "The Snakes and Ladders of 21st Century Trade Unionism", OXREP, 16(1), Spri 2000

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

Freeman, R. "What Do Unions Do? The 2004 Stringtwister Edition", NBER Working Paper No. 11410, 2005

Kaminska, M. E., Kahancová, M. Emigration and labour shortages: An opportunity for trade unions in the New Member States? In European Journal of Industrial Relations, 17: 189-203, June 2011

Putnam, R. D. 2000. Bowling alone: The collapse and revival of American community. New York: Simon & Schuster.