Unionism in the United States and Other Advanced OECD Countries

• Author: RICHARD B. FREEMAN,DAVID G. BLANCHFLOWER
• DOI: http://doi.org/10.1111/j.1468-232X.1992.tb00298.x
• Date: 01 January 1992
• Published date: 01 January 1992

Unionism in the United States and Other

Advanced

OECD

Countries

DAVID

G.

BLANCHFLOWER

and

RICHARD

B.

FREEMAN*

In this paper we compare the changing pattern of unionization in

OECD

countries, reviewing existing evidence and presenting new information on

union-nonunion differentials in labor market outcomes in these countries.

Our principal source of information are the micro data

files

of

the Interna-

tional Social Survey Programme cross-country surveys of

1985-87.

Our

analysis shows that

U.S.

unions have

a

larger effect on

wages

than on other

outcomes than unions in other

OECD

countries, and we argue that the high

union premium in the United States has contributed to the decline in union

density and divergence of the

US.

industrial relations system.

MOST

THEORIES

OF

LABOR

IN

capitalist economies stress the

factors that lead workers to form unions to bargain with management over

wages and conditions

of

work, producing similar labor relations among

countries over time (Kerr et al.,

1964).

Yet far from converging to some

modal type, trade unionism-traditionally the principal worker institution

under capitalism-developed differently among Western countries in the

1970s

and

1980s

(Freeman,

1989).

The proportion

of

workers represented

by unions fell precipitously in the United States. It also dropped, though to

a lesser extent, in Japan, the Netherlands, and the United Kingdom (dur-

ing the Thatcher years), and France, while increasing or maintaining high

levels in most Continental European countries and in Canada and Austra-

lia. The divergence in union density occurred despite increased trade,

communications, production by multinational firms, and technological

transfer and capital flows among countries that ought to have exerted

greater pressures for convergence in labor institutions than in earlier de-

cades when there were tighter national boundaries.

*The authors’ affiliations are, respectively, National Bureau

of

Economic Research, Dartmouth

College and Centre

for

Economic Performance; and National Bureau of Economic Research and

Harvard University.

INDUSTRIAL

RELATIONS,

Vol.

31,

No.

1

(Winter

1992).

0

1992

Regents

of

the University

of

California

56

Unionism

in

Advanced

Countries

I

57

In

this paper we explore the dimensions of the divergence

in

union

representation between the United States and other advanced OECD coun-

tries in the

1970s

and

1980s

and relate these differences in density to

differences in the economic effects

of

unionism across countries during this

time. Arguing that the high union wage premium in the United States has

contributed to the decline in U.S. density, we suggest that

U.S.

unions

must make major tactical and policy innovations to regain strength in the

private sector while the nation will have to develop new industrial relations

institutions to guarantee workers a voice in workplace decisions.

The

Economic Environment

and

Unionization

in

the

1970s

and

1980s

The rapidly changing economic and political environment

of

the

1970s

and

1980s

placed union movements in the developed world under stress

unprecedented since the depression of the

1930s.

The following were the

major changes:

1.

A slowdown in world economic growth and productivity and the

increased inflation following the

1970s

oil shocks, which created adverse

labor market situations in virtually all Western countries: Unemployment

rates skyrocketed, particularly in Europe; unemployment consistent with a

given level

of

job vacancies rose; real wages fell for blue-collar workers,

particularly in the United States; and unions in several countries took real

wage cuts

in

the

1980s

in order to stimulate employment.'

2.

The composition

of

employment shifted from traditionally highly

unionized to nonunion sectors and workers. The share of employment in

manufacturing dropped almost everywhere, while the share

of

employ-

ment in white-collar work grew, producing a labor force for whom many

traditional union issues were irrelevant. The female proportion

of

employ-

ment rose; the level of workers' schooling increased; and the age structure

of the workforce changed as the baby boom generation entered the labor

market. Since the workplace needs of white-collar workers, women, and

more educated and younger workers differ somewhat from those

of

prime-

age, male, blue-collar workers, who built most union movements, new

tactics and policies were needed to attract these workers to the labor

movement.

3.

Labor markets became increasingly internationalized, as the trade

'The United Kingdom is a striking exception, with substantial real wage gains through the

1980s.

The gain in real wages

of

Japanese workers through the

1980s

was expected, given the rapid growth

of

the Japanese economy and low rates

of

unemployment.