I have an Economics Briefing piece in today’s AFR on why unions have declined. After a week of immersing myself in the literature, I ended up pointing the finger at four factors: changes to the laws governing unions, more product market competition, rising inequality, and structural change in the labour market.
From the unions’ perspective, the picture isn’t rosy. Even if they could get all their favourite laws back (and a return to compulsory unionisation looks particularly improbable), the other factors are going to be much harder to redress. When I first entered the workforce in 1983 (as a newspaper boy), the unionisation rate was 50%. Now, it’s 23%. I very much doubt that half the workforce will ever be unionised again – at least in my lifetime.
Update 9 March, 9am: On a tangential note, I kept wondering while writing the piece whether union amalgamations might have hurt unions, since they reduced inter-union competition. Writings on unions tend to assume that competition is bad, since it involves duplication etc, but the work that’s been done elsewhere seems to suggest the opposite. The product market is an obvious analogy, but researchers on church attendance have also found that where churches have a semi-monopoly (eg. in the Scandinavian countries), total church attendance is lower, all else equal.
Update 9 March 2pm: Thomas Friedman is outraged that some European soldiers can join a union, though I presume he still thinks journalists should be allowed to join their union.