SLIP SLIDING AWAY: FURTHER UNION DECLINE IN GERMANY AND BRITAIN
| DOI | http://doi.org/10.1111/j.1467-9485.2011.00556.x |
| Author | André Pahnke,Paulino Teixeira,John T. Addison,Alex Bryson |
| Date | 01 September 2011 |
| Published date | 01 September 2011 |
SLIP SLIDING AWAY: FURTHER UNION
DECLINE IN GERMANY AND BRITAIN
John T. Addison
n
, Alex Bryson
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, Paulino Teixeira
nnn
and Andre
´Pahnke
nnnn
Abstract
This paper presents the first comparative analysis of the decline in collective
bargaining in two European countries where that decline has been among the most
pronounced. Using establishment-level data and a common model, we present
decompositions of changes in collective bargaining in the private sector in Germany
and Britain over the period 1998–2004. In both countries, within-effects dominate
compositional changes as the source of the recent decline in unionism. Overall, the
decline in collective bargaining is more pronounced in Britain than in Germany,
thus continuing a trend apparent since the 1980s. Although establishment
characteristics differ markedly across the two countries, assuming counterfactual
values of these characteristics makes little difference to unionization levels.
Expressed differently, the German dummy looms large.
I Intro ductio n
Recent years have witnessed a decline in unionism in Western Europe
(Ebbinghaus and Visser, 1999; Visser, 2003, 2006; Blanchflower, 2007). The
decline has not been uniform but has instead been concentrated in the larger
countries, particularly Britain, Germany, and Italy. We take advantage of
unique comparable establishment data to examine developments in two of these
countries, Germany and Britain.
We contribute to the existing literature which has focused almost entirely on
union density using household data, by exploring factors behind the demise of
private sector unionization at establishment level.
1
We deploy a common model
of the determinants of collective bargaining and undertake a shift-share analysis
of observed changes in the outcome indicators both across time and vertically
(i.e. at a single point in time).
n
University of South Carolina
nn
National Institute of Economic and Social Research and Centre for Economic Performance,
London School of Economics
nnn
University of Coimbra
nnnn
Institut fu
¨r Arbeitsmarkt- und Berufsforschung, Bundesagentur fu
¨r Arbeit
1
We also considered the course of workplace representation in works councils (Germany)
and joint consultative committees (Britain). Space constraints rule out presentation of this part
of our analysis but results are available from the authors upon request.
Scottish Journal of Political Economy, Vol. 58, No. 4, September 2011
r2011 The Authors. Scottish Journal of Political Economy r2011 Scottish Economic Society. Published by Blackwell
Publishing Ltd, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main St, Malden, MA, 02148, USA
490
The goal is to determine the contribution of compositional factors on the one
hand and behavioral or within-group factors on the other to the decline in
unionization. Although similar such decompositions based on union density
have been undertaken for individual countries, ours is the first such comparative
exercise. And apart from one other (single-country) study it is the first to
consider union recognition rates at establishment level rather than on
aggregations based on the union status of individuals. Moreover, unlike that
study it covers a larger slice of the labor force, namely establishments with 10 or
more employees rather than 25 or more employees.
II Backgrou nd
The decline in unionism in Britain long preceded our sample period. Writing at
the beginning of this decade, and reflecting on the findings of a study tracking
employment relations over the previous two decades, Millward et al. (2000,
p. 234) commented: ‘The system of collective relations, based on the shared
values of the legitimacy of representation by independent trade unions and of
joint regulation, crumbled . . . to such an extent that it no longer represents a
dominant model.’ Between 1979 and 1999 the percentage of employees who were
union members fell from 73% to 28%; in 1980 about 70% of establishments
recognized unions for collective bargaining purposes, declining to less than 45%
by the mid-1990s (Machin, 2000). These results were driven by developments in
the private sector, and above all in manufacturing.
Commentators were now to refer to unions as ‘hollow shells’ (Hyman, 1997;
Brown et al., 1998; Millward et al., 2000), their parlous state severely affecting
their ability to service current members’ interests, let alone organize parts of the
non-union sector (Willman and Bryson, 2009). The tendency was for new
establishments and new entrants to the labor force to be ‘born’ non-union
(Machin, 2000; Willman et al., 2007), resulting in a rise in the proportion of all
employees in the labor force who had never been union members (Bryson and
Gomez, 2005).
In Britain, there is no legal impediment to a plant engaging in both sectoral
and firm or establishment bargaining. In practice, by the start of our sample
period, sectoral bargaining was already a spent force outside of the public sector
(Brown et al., 2009, p. 34). The demise of national pay bargaining in Britain
reflects a decision made by employers to move away from a scenario in which
sectoral bargaining set a floor to pay, effectively taking wages out of
competition, to a situation in which employers are actively competing on the
basis of labor costs.
Unlike Britain, in Germany firm-level and sectoral-level bargaining are
mutually exclusive: they cannot co-exist at establishment level. Firm level
bargaining may be used by larger firms able to absorb the fixed costs of a
dedicated system. Nevertheless, the majority of large firms simply subscribe to
the sectoral bargaining system. Smaller firms may use sectoral bargaining to
benchmark their pay to the standard set by (most) others (Schmidt and
Dworschak, 2006). Necessarily, this rationale breaks down if sectoral pay is set
SLIP SLIDING AWAY 491
Scottish Journal of Political Economy
r2011 The Authors. Scottish Journal of Political Economy r2011 Scottish Economic Society
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