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How Are the Mighty Fallen?
From: London School of Economics and Political Science
| By:
Stephen Machin |
EDITOR'S INTRODUCTION |
What accounts for the dramatic decline of unions in Britain since 1979? Stephen Machin, a member of the Centre for Economic Performance at the London School of Economics and Political Science, investigates. He argues that unions have failed to galvanise younger generations and that in the powerful and fast-moving new economy of high technology and biotechnology firms there seems to be even less of a role for unions. |
 t's difficult to overestimate the extent of union decline in Britain. Union activity in the labour market is now at its lowest level since the Second World War. Less than 30 percent of employees are now trade union members. In the private sector, that figure falls to under one in five. Compare these figures to the heyday of unionism in the late 1970s, when 58 percent of employees--just over 13 million people--were trade union members. Since the peak, in 1979, unionisation has fallen relentlessly year after year to the very low levels we now see today. |
The influence of trade unions on the pay-setting process has also waned. In 1980, around 70 percent of wages were set through collective bargaining between unions and employers. By 1998, this had fallen sharply, to about 35 percent. In international terms, the scale and pace of this decline is both larger and faster than that experienced by other countries. Indeed, in some other countries union collective bargaining coverage has not fallen at all. In those where it has, the percentage decrease is nowhere near as marked as it is in Britain. |
The age factor
Why has this decline been so sharp? Age is certainly a factor--the age of workers and of workplaces. Rates of unionisation are very much lower amongst younger workers and in newer workplaces. Figure 1 shows that only 18 percent of individuals aged 18-29 were members of unions in 1998, compared with 44 percent of the same age group 15 years earlier. Union membership rates have also fallen for older workers, but not to such low levels. |
When we look at workplace age, the contrast is even starker. Figure 2 shows the percentage of workplaces that have trade unions that are recognised for collective bargaining purposes. In workplaces that were set up after 1980, only a third (33 percent) have recognised unions--barely half the proportion in workplaces which were established before 1980. The rates of union recognition in workplaces fell so steeply in the 1980s and 1990s that the gap between rates of recognition in newer and older workplaces widened markedly. These lower rates of unionisation are heavily concentrated in the private sector, especially in private sector manufacturing, one of the traditional heartlands of union activity. In the public sector, unionisation has remained high, and the age of the workplace makes little difference to union recognition. |
Are the unions or the managers to blame?
Of course, it may be that trade unions have been responsible for killing off workplaces. Much of the popular press still pushes the idea that unions raise costs or enforce restrictive practices that cause inefficiency--or both--and thus force employers out of business. But the evidence available offers no support for this theory. Data from the Workplace Industrial Relations Surveys (of 1980, 1984, 1990 and 1998) show that union workplaces are no more likely to have shut down than non-union concerns. |
Another explanation is that managers have been getting rid of unions: previously having recognised them for collective bargaining, managers and employers have withdrawn recognition rights and de-recognised unions. But, again according to the Workplace Industrial Relations Surveys, and despite some high-profile examples (like the newspaper industry in the '80s), de-recognition has been rare. Between 1984 and 1990, for instance, it occurred in only 3 percent of unionised workplaces. It was a little higher in the 1990s, at 6 percent; but it remained relatively small and clearly fails to explain a greater part of union decline. Industrial-relations experts tend to explain the low de-recognition figures by noting the potentially large fixed costs associated with setting up recognition in the first place; dismantling this machinery, they argue, is much too costly an exercise to undertake. |
So where did the unions go wrong?
This doesn't leave us with many alternatives. In fact, the critical factor underpinning union decline in the private sector has been the failure of trade unions to organise workers and to gain recognition for collective bargaining purposes in establishments and firms that have been set up since 1980. The mechanisms that used to enable trade unions to make employers concede recognition demands in a new workplace have ceased to exist. At least in part, this reflects unions' own inability to organise workers in the new kinds of firms that have been set up in recent years, and to the increased competitive pressures now facing workplaces in many sectors. |
All this paints a rather bleak future for unions. The relentless decline in union presence through the 1980s and 1990s, and the increasing proportion of new union-free workplaces where unions are unable to even get a toe in the door, are unlikely to be reversed easily. |
A brighter future?
But at least the trade unions are now much more aware of where they need to organise. And the Labour government's Fairness at Work legislation, soon to be introduced to the labour market, will give unions the chance to participate in election ballots to try to gain recognition, rather like the union representation elections that take place in the United States. In America, however, union presence is even lower than in Britain, and in the private sector it has continuously fallen since the 1950s. And in the increasingly powerful new economy of high-technology and biotechnology firms, there seems little role or place for trade unions. It may be all the union movement can do to halt the decline in their power and influence, let alone reverse it. |
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