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Decline in Trade Unionism and Strike Activity - Coursework Example

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This paper "Decline in Trade Unionism and Strike Activity” argues there is no bound between a decline in strike activity and fall in trade unions. Instability of the public sector, growth of privatization, an employment shifts to services and a decline in European manufacturing matter much. …
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Decline in Trade Unionism and Strike Activity
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 Abstract Over the last three decades, a series of global changes have weakened the power of trade unions, and these changes are responsible for the decline in trade unionism and strikes. This paper explores the reasons behind the decline, and also examines whether these trends are related, looking specifically at trends in Germany, France, Sweden and the United Kingdom. The final part of this paper concludes whether there is any possibility to reverse these trends in the medium term. Introduction For decades, trade unions have played an important role in Europe as organisations that work to provide common goals for workers, offering traditional functions to its members such as collective bargaining, organised strikes and support for unfair dismissal. In the UK, for example, the “Trade Union Congress” (TUC), which is an organisation of British trade unions, was founded in 1868, and has since then, become a powerful institution in industrial relations. Trade unions have been commonly associated with strike related activities since the 1900’s, but the instances of trade unions and strikes has evolved and changed dramatically since this period (Aligisakis, 1997). Participation in trade unions and strike activity are considered to be two important aspects of industrial relations in any country. In the majority of European countries, trade unionism and the level of strike activities has experienced a continuous decline since the 1980s. Over the last three decades, a series of global changes have weakened the power of trade unions. These changes are responsible for the decline in trade unionism and fall in strikes, and the reasons for these changes will be explored in this paper. Attempts will also be made to examine whether any relation exists between the decline in trade union membership and strikes. Before embarking on discussing the issues mentioned above, one should look at the trend in trade unionism as well as strikes in European countries, particularly in Germany, France, Great Britain and Sweden, as this is essential in finding out the relationship between the decline in trade union membership and strikes. These countries have been chosen as they represent the widest spectrum of industrial relations. 1. Trend in trade unionism in European countries since the 1980s Industrial relations in European countries have evolved over the years, and these changes have impacted directly on the dramatic decrease in the participation and use of trade unions. There has been a huge fall in collective bargaining power in European nations (Hancké, 1993), while privatisation and organisational incompetency have weakened the strength of unions. A combination of these factors has negatively impacted trade union membership in most European countries (Katz, 1993). Since the 1980s, trade unions within European countries have faced several challenges with respect to recruiting members. A research conducted by Ebbinghaus and Visser (2000) discovered that since the 1980s, union density (this can be defined as the ratio of trade union membership to the labour force) experienced a sharp fall1. This study also identified that in a number of countries, there has been a decline in union membership. For example, in France during the period of 1990-1995 trade union membership fell by around 0.2 percent, while in Germany and Great Britain the level of reduction was around 3.7 percent, and 4.9 percent respectively. Over the last two and half decades, unionisation in Europe, particularly in the member states of European Union have experienced dramatic decline. It can be found that in all of the EU’s most populated states, the level of unionism was only moderate in the early 2000s. For example, in Germany 27 percent of total workers belonged to trade unions, while the level of unionism in Great Britain was 29 percent and in France the level was as low as 9 percent (DTI, 2001). However, it is interesting to note that this study also found that in some European countries, during the period of 1990-1995, the level of unionism had increased. For example in Sweden, membership in trade unions increased by 0.1 percent approximately, by 2 percent in Finland and 1.5 percent in Norway, respectively. In addition, it is important to consider the changing composition of trade unions. Traditionally, density rates of trade unions are higher for men than women, and higher in the public sector than the private sector (Blanchflower, 2007) but this scenario is changing. For example, the number of women in the TUC has risen to account for 41 percent in 2001, in comparison with 29 percent in 1979 (Heery, Kelly and Waddington, 2003). 2. The major reasons behind the decline in trade unionism in European nations Since the middle of 1970s, unemployment on a long-term basis has become a major problem facing most of the European nations (Baglioni and Crouch, 1990). As there has been a contraction in the recruitment base, trade union membership has declined automatically, which in turn has resulted in a severe reduction in the collective bargaining power of these unions (Golden, Wallerstein and Lange, 1999). Interestingly, the negative impact of long-term unemployment on the growth of trade union membership was actually hypothesised by some studies on the business cycle in European nations prior to the occurrence of mass unemployment during late 1970s (Bain and Elsheikh, 1976). There also exist some empirical studies, which have made an attempt to examine the relationship between long-term mass unemployment and trade unionism. These studies have found that an increase in mass unemployment since the middle of 1970s explains a significant portion of the overall decline in trade union membership (Blaschke, 2000; Brown, Deakin and Pratten, 2001). Some studies have, however, found that there exists no such significant relationship between mass unemployment and trade unionism. For example, Rothstein (1992) and Western (1998), in their studies, have found that on many occasions unemployment does affect trade union membership. This negative impact occurs in response to union-led unemployment insurance, which provides some impetus for workers to join and stay in the union rather than to leave it after losing their jobs. In countries like Sweden, Denmark and Finland, union-led unemployment insurance has significantly reduced the negative impact of mass employment on unionism. However, in France or in the Netherlands the existence of union-led unemployment insurance has not been proven to be highly effective in reducing a negative impact of unemployment on trade union membership. The increasing insecurity of the public sector has also served as a major reason behind the decline in trade union membership (Bach, 2002). For example, the growth of privatisation in UK industry has led to increasing difficulties for trade union membership retention (Waddington, 1992). Generally speaking, privatised companies do not encourage trade union participation, as they would not want interference with employee issues such as wages, pensions, labour hours and so on. Furthermore, unionisation in the public sector appears to be higher in most of the EU member states than in private sector. This is because trade unions in the public sector are highly organised, despite the wave of privatisation, cuts in government spending on the public sector, and the implementation of new management methods, such as Human Resource Management (HRM) which will be examined in more detail later in this paper. It has been also found that at present, in the Nordic states (Denmark, Finland and Sweden) unionisation in the public sector is significantly higher in comparison to that in the total industrial sector2. Apart from being highly organised, the public sector possesses several favourable characteristics for having higher unionism, such as high union recognition and bureaucratic structures. It is generally found that while there is little gap between unionism in public and private sector in high union density countries, unionisation in the public sector is much higher than in the private sector in countries with lower union density. For example, in Great Britain, according to the Labour Force Survey, trade union membership in the public sector (60 percent) is around three times higher than in the private sector (19 percent). The problem is that in most of the countries, the public sector is getting smaller and the private sector is flourishing at a very high pace. So the ultimate result is that overall trade unionism is declining (Wallerstein and Western, 2000). Over the last two decades, many European countries have adopted several measures for reforming their economic structure to make their economies more liberal, deregulated and capable of standing against the effects of globalisation. Industrial relations in the private sector are quite different than those in the public sector. Management is very rigid and stringent in the private sector, and collective bargaining power is also very limited. Consequently, in a liberalised and deregulated regime, where the private sector has grown larger than the public sector in a huge number of industries, overall trade union membership has declined significantly (Waddington, 2001). Hasse and Leiulfsrud (2002) wrote that the influence and power of trade unions are no longer as effective, with “wage bargaining a remedy of the past”. Employers have now developed stronger relationships with their employees, through methods such as human resource management (HRM), thus reducing the need for trade unions. Small firms and part time workers are now experiencing a level of growing importance in most of the European nations, particularly in the U.K and Germany. However, the level or extent of trade union organisations is very low in the case of small firms and part time workers, which is, in turn, automatically furthering the weakening of unions (Ferner and Hyman, 1998). There also has been continuous decline in some sectors, such as manufacturing, which have traditionally strong trade union organisations (Iverson, Pontusson and Soskice, 2000). At present, those sectors are experiencing a rapid rise in the economies which traditionally have had a weak union organisation, such as the service sectors (Locke, Kochan and Piore, 1995). The employment shift towards marketed services is also responsible for the decline in trade union membership. More than 70 percent of employment in many OECD countries is found in service industries (Dolvik and Waddington, 2004). Employees in the service sector have more autonomy and higher job satisfaction, and therefore there is less need to join a trade union (D’Art and Turner, 2008) this has provided trade unions difficult challenges concerning the recruitment and retention of members. Hasse and Leiulfsrud (2002) wrote that, “New emerging influences, cultural projects and a tendency towards individualisation are believed to promote the constitution of individuals as economic actors” (p.110). The increasing nature of individualism in society has meant that the requirement for trade unions is less popular (Williams, 1997), as the notion of a group of individuals to reach a common goal is less attractive to workers. Finally, some scholars such as Waddington and Whiston (1995) held the recession and collapse of the manufacturing industry responsible for decline in trade unionisation during the early 1980s. Since the mid-1980s, employer hostility, and the de-recognition of trade unions, such as less labour friendly union laws, has started to expand at a rapid pace. Considering the present situation, where recession has again become a worrying issue for most countries, trade unionisation is likely to fall at a higher extent in coming years (Locke, Kochan and Piore, 1995). 3. The Trend in Strikes To examine the trend in strikes it is necessary to use some indices of strikes. Generally, the ‘number of working days lost due to strikes’ and the ‘number of workers involved in strikes’ are used for measuring strikes. Since the mid 1980s, the main indicators of strikes have declined at a rapid pace. For example, in the U.K. the number of strikes in 1995 was only 235, which was only 6 percent of the total number of strikes during the peak year of 1970s (Ferner and Hyman, 1998). The rate of decline in strikes during the 1980s was also very high compared to the 1960s. However, if anyone examines the long-term trend, then one would find the reduction in strikes to be less dramatic. Another interesting fact to note is that there has also been a steady decline in the proportion of strikes lasting for more than three days. By the middle of 1990s, more than three quarters of overall strikes lasted for less than three days. The number of days lost due to strikes also fell sharply over time, particularly after mid-1980s (EIROnline; Locke, Kochan and Piore, 1995; Ruysseveldt and Visser, 1996; Russeveldt, Huiskamp and Hoof, 1995; Waddington and Hoffmann, 2000). There was also a significant fall in the number of workers who participated in strikes from mid 1980s onwards. For example, in the U.K. during 1980-85 the average number of workers involved in strike activity had amounted to 1,213, while this number reduced to as low as 174 in 1995. Similarly, during 1980-85, the average number of working days lost due to strikes had been 9,806, but in 1995 the number of days lost was merely 415. Another study by Ferner and Hyman (1998) made an attempt to find out the trend in strikes for the period of 1998-2001, and found that there is no clear trend, with figures often increasing and declining from year to year. Furthermore, the picture regarding the trend in strikes also varies from country to country. It has been found that in countries like Great Britain, France, Germany and Sweden, working days lost due to strikes per 1000 workers had increased from 1998 to 2002, although the extent of that decline has varied across countries. On the other hand, in some other countries like the Netherlands, Norway and Portugal, working days lost due to strike activity had reduced from 1998 to 2001. Therefore, regarding the trend in strikes, it can be concluded from the above observations that from mid 1980s to mid 1990s there had been a steady fall in strikes in most of the European countries, but since late 1990s no consistent trend is visible in the European nations. 4. The reasons behind the changing pattern of strikes One of the major reasons behind the decline in strikes in European countries, particularly during the period between the 1980s-1990s, are the implementations of new management policies in the industrial sector, such as increasing communication with workers. Since the mid-1980s, technical organisation of work has improved. For example, Human Resource Management has reorganised workplace relations including strikes and effort bargaining. Conflicts at work are caused by organising principles, and strike activities have been connected to such structural conditions (Edwards, 1992, p.363) owing to the efforts of the Human resource management there has been a huge decline in the grievances of workers. Methods such as Alternative Dispute Resolution procedures have also reduced the need to resort to industrial action (Aligisakis, 1997). As mentioned earlier in this paper, since the mid-1980s, the uncertain environment regarding jobs in the face of mass unemployment also helped in reducing the willingness of workers to walk out. Mass unemployment has weakened workers “fighting spirit”, which has caused an imbalance of power between employers and employees, discouraging employees from participating in strike activity (Aligisakis, 1997). Hence, considering the present economic scenario where most economies have been hit by the recession, jobs have become more uncertain, and this uncertain environment is likely to cause a further decline in strikes in near future. The large decline in strikes has also been possible due to fragmentation of bargaining power and privatisation. Therefore, it is apparent that in most cases, the reasons that have caused the decline in trade union membership have also been responsible for the reduction in strikes in the European countries. Therefore it would be interesting to analyse the relationship between the decline in trade union membership and strikes in European nations (D’Art and Turner, 2008; Boeri, Brugiavini and Calmfors, 2001). 5. The relationship between the decline in trade union membership and strikes in European nations (1266) Over the years, the trends in trade union membership, as well as in strikes have been showing a declining tendency. In the earlier discussion, it has also been found that some of the major reasons behind such a reduction in trade union membership and strikes are similar. For example, mass unemployment, which started in the late 1970s, and privatisation have played major roles in reducing the level of unionisation as well as strikes. As far as the relationship between trade unionisation and strikes, one can examine this by looking at trends over the years. In particular, since the 1980s trends have shown that the decline in trade unionism might have played a crucial role in the reduction in strikes. This is because as trade union membership declines, it results in further weakening of the trade union organisation. This, in turn, leads to the deterioration of collective bargaining power. As collective bargaining power deteriorates, the willingness of workers to place their demands in front of management and to show their grievances over certain issues in the form of ‘walking out’, or striking, declines in a significant way. It is worth noting that privatisation or mass unemployment has helped in the reduction in strikes through causing a fall in the level of trade union membership. So a decline in trade unionism can be considered an important factor that has worked behind the reduction in strikes. However, there is one further important point to consider. Although decline in trade unionism is assumed to have played some role in the reduction of strikes, one cannot ignore other factors, which have a significant influence on the reduction in strikes in European countries. Decline in labour market disputes is a vital factor, which has helped in accelerating the rate of decline in strikes and is also expected to accelerate the rate of fall in strikes in future (Davies, 2001). There exist a number of factors that have helped in reducing labour market disputes in many European countries. Among them there are some macroeconomic factors. Among these macroeconomic factors, the most important one is the structural change in the economy. Since the mid 1980s, there have been vast structural changes in the economy in most of the member states of European Union (EU). In most of the EU member states the importance of manufacturing sector has declined and the importance of the service sector has increased. In most EU member states labour disputes are frequently found to be concentrated in the manufacturing sector. Conversely, the service sector seems to be free from these to a large extent. Therefore, with the economy becoming increasingly dependent on the service sector, labour market disputes appear to be falling. Apart from this, a lower level of inflation in the EU, particularly in the 1980s and 1990s, appears to have resulted in fewer strikes, because as the expected rate of inflation falls, the expected demand for wages also decreases (Ebbinghaus and Visser, 2000). As the service sector becomes increasingly important in any economy, labour disputes will also reduce at a higher pace. If the service sector remains as important as it is now or becomes more important, then it is quite likely that there will be a huge fall in labour disputes. This, in turn, will cause a considerable fall in strikes in the coming years too. Adding to these macroeconomic factors, the reduction in the vertical integration process through outsourcing and the limitation of inventories through the production process characterised as ‘just-in-time’ production, have led to an increase in the vulnerability of the production to disruption. Currently, ‘pinpointed’ strikes allow workers to achieve the same effect, which previously had to be obtained through mass strikes. This has helped to reduce strikes. If this vertical integration process in the sphere of production continues to decline, then mass strikes are quite likely to fall significantly in future too (Ochel and Selwitschka, 2003). Finally, a fall in trade unionisation has also played a crucial role in reducing worker-employers disputes over time. The decline in union membership will result in depleting funds, which can contribute to the decline in labour disputes and strikes now and in the future (Ebbinghaus and Visser, 2000). A positive relationship between strike activity and trade unionism was highlighted by Vernon (2006), and has been supported by the work of many academics. As labour disputes have declined, incentives to strikes have reduced. There exist fewer grievances among employees, which could prompt workers to strike. As far as direct relationship between trade unionism and strikes is concerned, it can be found that the overall result is not the same across all the countries. While in some countries decline in trade unionism is associated with a significant fall in strikes, in other countries no such trend is visible. For example, in countries such as Great Britain, Germany, France and Greece, trade unionism had fallen over time, particularly in the 1980s and 1990s. In Great Britain, the level of unionisation amounted to 51 percent in 1980, and then it fell significantly to just 30 percent in the late 1990s (1998). During 1980, in France, the unionisation had stood at a level of 22 per cent, while in 1998 unionisation fell to a mere 10 percent. In Germany, the level of unionisation had been 35 per cent in 1980, and then it fell significantly to just 26 percent in the late 1990s (1998). During 1980 in Greece, the unionisation had stood at a level of 36 percent while in 1998 unionisation fell to a mere 24 percent. In all of these countries, the level of strikes had also declined significantly since 1980. Particularly, up to the period of late 1990s, there has been a continuous decline in strikes in all these countries. Therefore, decline in trade unionisation may have played an important role in the fall in strikes in these countries. However, the case is not same for other countries. For example, in countries like Sweden, Denmark and Belgium, no declining trend is visible in trade union membership. Instead, one can find a rising trend in trade unionisation at a moderate level. However, an interesting fact is that in these countries, strikes have also declined significantly since the 1980s. Therefore, trends in trade unionisation and in strikes have moved towards opposite directions. Hence, in these countries decline in strikes cannot be said to have resulted from or be associated with a fall in trade unionisation (Wadensjo, 2000; Ochel and Selwitschka, 2003). In considering the relationship between trade unionisation and strikes, one can also do a cross-country analysis to examine whether the level of strikes is positively related with the level of trade unionisation. This cross-country analysis can bring out some surprising results. It is a general perception that as trade unionisation declines strikes also reduce, however, in practice the situation is a little different. In countries like Sweden, Denmark and Belgium, the level of unionisation has always exceeded the 50 percent level over the period of 1970-2000. In the late 1990s, the level of unionisation was at its highest in Sweden, and in 1998, unionisation in Sweden stood at as high as 88 percent. However, this growth in trade unions was not reflected in other areas of the EU. During this same period, the level of unionisation declined rapidly in the UK, proving a traumatic time for trade unions. This decline was also observed in the USA (Hasse and Leiulfsrud, 2002). Therefore, from a cross-country analysis it is not possible to draw any clear conclusions regarding the relationship between trade union membership and strikes. 6. The reversal in the decline of trade unionism and strikes From the cross-country analysis above, some ideas can be built regarding the likelihood of the declining trends in trade union membership and strikes in European countries. Reviewing the trends in the past two and a half decades it can be said that at the present age of privatisation, where individualism has taken the place of collective bargaining, management has become more rigid, and trade unions have become less powerful in providing job security to the employees. Trade union membership is expected to fall further in future, particularly in countries like Great Britain, Germany and France, where, to a large extent, trade union has already been weakened. Nevertheless, in countries like Denmark, Sweden and Belgium, where trade unions have been able to maintain their power, mainly through the provision unemployment insurance, trade union membership may not fall in the near future. Even if membership does decline, the extent of the fall is likely to be small. Multi-industry and sector based unions may execute defensive mergers, to achieve benefits of size and scope. This would allow unions to reach more workers, and reduce an amount of inter-union competition, making unions stronger and more effective (Waddington, 1992; Waddington, 2000; Visser, 2002; Behrens et al, 2003), however, their influence, as yet, appears to be insignificant (Heery, Kelly and Waddington, 2003). As examined in this paper, trade unions are currently implementing strategies to change and guide labour movements in the future, in order to attract and retain members. For example, The European Trade Union Confederation (EUTC) has developed a new social deal in Europe with a five point plan which has been developed to attract and retain members, including better employment protection and better pensions and pay (EUTC Declaration, 2009). However, the European trade movement may continue to find it difficult to establish a strong European industrial relations system given the “weak position and fragmented nature of the movement in a number of EU countries” (Jensen et al, 1995, p.17). Dolvik and Waddington (2004) wrote, “If trade unions are unable to meet the changing needs and aspirations of the expanding service workforce, their political legitimacy and societal influence is likely to be impaired” (p. 31). A way to attract a diverse workforce would be to create a strategy that promotes heterogeneity, in order to offer all workers an incentive to join trade unions. Furthermore, trade unions may choose to advertise themselves as offering individualistic facilities, in order to be more attractive to workers (Williams, 1997). The success of these movements, however, will depend upon the ability of trade unions to market their organisations to a larger interest group of workers, as opposed to attracting the traditional narrow interest group of workers in manufacturing and public services (Hyman, 2001; Dolvik and Waddington, 2004). Furthermore, the private sector provides the largest potential area for union growth, and unions could place a renewed emphasis on recruitment within these unions (Waddington, 1992). Some academics argue that as unions continue to lack power and resources, their attempts to reverse their decline are largely doomed to fail (Howell, 1999; Heery, Kelly and Waddington, 2003). Furthermore, if falling employee demand for unions is the reason for declining union density, unions have no way to counter this, and will thus continue to have a decline in membership (D’Art and Turner, 2008). One factor, which cannot be ignored when looking at the reversal of the decline in trade union memberships and strike activity, is the current recession and its effect on industrial relations. The recession could potentially create pockets of strike activity and industrial conflict in the medium term. The recent impact of globalisation has led to increasing pressure from developing countries on the structures of businesses in Western Europe (Aligisakis, 1997). This could potentially cause tensions between employers and employees. Furthermore, the current pressure of the worldwide recession may cause further issues in the future. A recent example of this is the strike at Lindsay Oil Refinery in February this year. This strike was lead by angry protestors in response to the sub-contraction of 300 Italian workers to work on a contract in the UK, with the argument that UK jobs should be given to British workers (BBC News, 2009). Such occurrences may happen again, and this could potentially have a profound effect on the level of strikes in all areas of the EU. In addition, this turbulent economic climate may result in a strengthening and collaboration in trade unions in order to protect the increasing number of workers at risk of losing their jobs. This could lead to an increase in general trade union growth as the protection offered by trade unions may become more apparent (D’Art and Turner, 2008). However, strikes are likely to fall at a higher pace in all the European countries. In most of the European countries, new labour disputes rules have been implemented (Ochel and Selwitschka, 2003). Under these rules, the partners of the collective bargaining agreements are prohibited from initiating any kind of labour disputes during the term of agreements. These labour disputes rules also restrict the legality of strikes. Hence, under these rules, industrial peace is expected to be maintained, and strikes are likely to decline further at a rapid pace. 7. Conclusion This paper has identified several factors for the decline in trade unionism and strike activity. These include the insecurity of the public sector, growth of privatisation, an employment shift towards services and a decline in European manufacturing. Following extensive research and a cross country analysis, it has been concluded that there is no clear trend between a decline in strike activity and fall in trade unions, given that countries such as Sweden, Denmark and Belgium have retained higher levels of trade unions, but have also seen a decline in strike activity. The past trends of industrial relations examined in this essay have demonstrated that trade unionism and strike activity are likely to continue to decline. 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