Labour immigration and union strength
| Published date | 01 March 2020 |
| Author | Marianne Røed,Henning Finseraas,Pål Schøne |
| Date | 01 March 2020 |
| DOI | 10.1177/1465116519881194 |
| Subject Matter | Articles |
Article
Labour immigration
and union strength
Henning Finseraas
Institute for Social Research, Oslo, Norway
Marianne Røed
Institute for Social Research, Oslo, Norway
Pa
˚l Schøne
Institute for Social Research, Oslo, Norway
Abstract
Is labour mobility in the European Union a threat to the strength of unions? We argue
that the combination of cheap labour, workforce heterogeneity and low unionisation
among labour immigrants is a potential challenge for unions. The challenge will be severe
if immigration affects natives’ unionisation. We use Norwegian administrative data in a
natural experiment framework to examine this claim. The 2004 European Union expan-
sion led to a rapid increase in labour migration to the building and construction industry,
but licensing demands protected some workers from the labour supply shock. Weshow
negative labour market effects for workers exposed to labour immigration, but no effect
on union membership. Our results question theories of unionisation and are relevant for
research on immigration, political behaviour and collective action.
Keywords
European Union, immigration, labour mobility, trade unions
Introduction
Migration of labour across countries can be a major force of change. Like inter-
national trade, it can create winners and losers, disrupt local and sectoral labour
markets and change domestic institutions. The impact of globalisation and
Corresponding author:
Henning Finseraas, Institute for Social Research, PO Box 3233, Elisenberg, 0208 Oslo, Norway.
Email: henning.finseraas@samfunnsforskning.no
European Union Politics
2020, Vol. 21(1) 3–23
!The Author(s) 2019
Article reuse guidelines:
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DOI: 10.1177/1465116519881194
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Europeanisation on domestic institutions was a vibrant research area in the late
1990s (e.g. Cowles et al., 2001; Garrett, 1998; Rodrik, 1997) and has re-emerged
with the intensification of international trade (Busemeyer, 2009) and the liberali-
sation of labour mobility within the European Union (EU) (Afonso and Devitt,
2016). The consequences of a high supply of cheap labour (King and Rueda, 2008),
earnings inequality (McCarty et al., 2006) and the dualisation or segmentation of
the labour market (Alt and Iversen, 2017; Emmenegger and Careja, 2012) are
current political economy topics related to the consequences of labour migration.
We study the consequences of increased labour mobility after the EU enlargement
in 2004, a topic which has received massive attention both in the popular press and
in academic work on Brexit and the rise of populism (Colantone and Stanig, 2018;
Finseraas et al., 2017).
The impact on trade unions holds an important position in the debates on the
consequences of European labour migration. Although in decline, trade unions are
still important agents in the political economy of many European countries.
Norway, the case we study in this article, is a prime example. Unions and employer
organisations are centralised at the national level, where coordinated wage bar-
gaining determines wage growth intervals. Consultations between unions, employ-
ers and the government on relevant labour market issues are frequent, and it is
politically difficult for the government to oppose agreements from previous tripar-
tite consultations. This institutional model has been characterised as a stable,
institutional equilibrium with support across the political spectrum. Indeed,
some argue that this equilibrium is of key importance to the economic success
of the Scandinavian economies (Barth et al., 2014).
1
To what extent is labour mobility a threat to the institutional equilibrium in the
labour market? While labour immigration can potentially have net positive, fiscal
effects, the net benefit will be reduced/reversed if immigration has negative effects
on well-functioning institutions in the receiving country (Borjas, 2015). The rapid
increase in labour immigration to Norway since 2004 has raised concerns regard-
ing the future of the social model. These concerns are not only raised by the
unions. Employer organisations and conservative politicians have also voiced con-
cerns, which reflect the broad political support for the model.
2
We document that
some of the concerns are real, as labour immigration has had important economic
effects on parts of the Norwegian labour market. With this background, we use
administrative register data to examine whether immigrant competition influences
natives’ propensity to unionise.
We highlight two potential effects of immigration on the motives to unionise.
First, immigrants are less likely to unionise than natives, which might undermine
the norm and social expectation of unionisation (Booth, 1985; Naylor and Cripps,
1993; Visser, 2002). Second, the willingness of workers to pay their membership
fees should, on the margin, be influenced by whether they believe that the union
can improve their situation in the labour market. Union density is one indicator of
union strength and is correlated with the existence of several types of pro-labour
policies (e.g. Korpi, 2006) and the ability of unions to get their wage demands
4European Union Politics 21(1)
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