INDUSTRIAL-COUNTRY UNIONS: DECLINING ECONOMIC AND POLITICAL STRENGTH

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• Sequence Number: 3
• Publication Date: July 1, 1983
• Content Type: REPORT

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;~Ef Directorate of Gonfidrnfixl~
Industrial-Country Unions:
Declining Economic and
Political Strength
Gonfiaeneisi
GI 83-10177
July 1983
Copy 3 9 6
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c Directorate of Confidential
_W1 ~
Industrial-Country Unions:
Declining Economic and
Political Strength
This paper was prepared b~
Office of Global Issues. Comments and queries are
welcome and may be directed to the Chief,
Economic Analysis Branch, OGI,
Confidential
GI 83-10177
July 1983
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Industrial-Country Unions:
Declining Economic and
Political Strength
Key Judgments Organized labor in the major foreign industrial countries has lost consider-
Information available able economic and political clout in the past few years. Membership rolls
as of 15 July 1983 are down sharply, the ability of unions to secure employment and wage
was used in this report.
gains for their members has been severely curtailed, and allied political
parties have lost strength along with the unions.
Although the recession has contributed to recent setbacks, we believe basic
structural shifts in the world economy are the key factors in organized
labor's slide:
? The shift in demand away from union strongholds in basic manufactur-
ing industries and the associated drops in employment have undermined
union membership bases.
? At the same time, employment-growth fields such as information
services, communications, and electronic equipment production are not
easily organized by unions because firms are generally smaller, more
competitive ventures employing relatively few skilled technicians.
? Austere government budgets and a more conservative political outlook in
many industrial countries-including those with socialist governments-
make it unlikely that public service will again be a growth sector in the
1980s.
These changes, accentuated by demographic trends that spell rapid
increases in the labor force, probably will continue to erode the economic
and political influence of unions in the industrial economies.
The greatest political impact of declining union strength has been felt by
the major socialist-oriented political parties-in or out of power-in
Western Europe. Members of the principal socialist-dominated labor
unions are turning to the more traditional center-right parties; whether this
trend will continue is uncertain. Economic recovery could solidify the shift
by union members to conservative voting positions in countries with center-
right governments. A continuation of economic difficulties in those coun-
tries, however, could cause a swing back to the left. In either case, union in-
fluence will probably be less than it is at present.
A dropoff in union political effectiveness is likely to be felt in other ways
also. Some unions, seeking to voice their political concerns, have begun to
cooperate with autonomous protest groups-environmentalist, prodisarma-
ment and antinuclear, ethnic, and other. In addition, disaffected younger
union members and unemployed youth have increasingly participated in
iii Confidential
GI 83-10177
July 1983
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nonunion political activity in Western Europe. Worker frustration over
union impotence on wage and job security issues could find an outlet in la-
bor strikes focusing on general economic, social, and political issues. Work
stoppages primarily for job-related reasons, however, are likely to remain
relatively insignificant until recovery is well under way and union confi-
dence is restored.
From the standpoint of US interests, foreign unions are showing a growing
tendency to argue that existing international trade, investment, and
monetary arrangements are impediments to restoring economic security.
Some of their faultfinding has extended to such issues as the Soviet-West
European pipeline and NATO missile deployment. To the extent that this
more international focus of unions continues or affects government policy,
additional tensions could surface in Western economic relations.
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Key Judgments
Unions Expand Economic and Political Role Through the Mid-1970s
The 1974-75 Recession: Beginnings of Reversal
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Industrial-Country Unions:
Declining Economic and
Political Strength
Unions Expand Economic and Political Role Through
the Mid-1970s
Foreign industrial-country ' labor unions substantially
increased their strength and effectiveness from the
late 1950s through the mid-1970s. Union membership
in OECD countries outside of the United States more
than doubled between 1960 and 1975, climbing from
25 to 35 percent of the work force. West European
unions increased their share of the labor force from 29
to 40 percent as the large public-service sectors in the
United Kingdom, Italy, and the Scandinavian coun-
tries were organized (figure 1 and appendix A). The
unionization of Japan's labor force rose from 17 to
24 percent.
Trade unions and their members profited from the
strong economic performances of this period. Real
wage gains in Japan and Western Europe averaged
5 percent a year for more than two decades while
unemployment remained low. Labor was so scarce in
the prospering European Community that over
8 million work permits were issued to guest workers
between 1958 and 1972 to ease acute shortages.
Labor's share of OECD GDP increased from 53 to 58
Figure 1
Industrial Countries: Membership
in Labor Unions'
As a percent of labor force
50
United States
Japan
Western
I'uropch
aTaken from the OECD and various statistical yearbooks of the individual
countries: membership estimates are not precise because of diverse methods
of compilation between countries but should accurately portray trends
within each country or region over time. Data for individual W'est European
countries are presented in appendix A.
h Includes West Germany, France, the United kingdom, Italy, Denmark,
Finland. Netherlands, Norway, and Sweden, as well as Canada and Australia
c Estimated.
percent between 1960 and 1975
Labor unions developed into major political and
economic power centers during this time. Close ties
grew between West European unions and Socialist,
Christian-Democrat, or Communist parties on the
basis of shared outlooks, core constituencies, and
mutually supportive policy interests. Throughout
Western Europe, unions helped mold the general
pattern of social policy evolving in the postwar period.
Through political activism they helped set the course
' Industrial countries are members of the Organization for Econom-
ic Cooperation and Development (OECD). Included are the United
States, Japan, West Germany, France, the United Kingdom, Italy,
Canada, Australia, New Zealand, Austria, Belgium, Denmark,
Finland, Greece, Iceland, Ireland, Luxembourg, the Netherlands,
for an expanding public-sector role in welfare and
social security and became closely involved in broad
areas of economic decision making, including deter-
mining income distribution and tax policies.
Initially, this period was characterized by generally
peaceful industrial relations, primarily because there
was widespread acceptance of the concept of a "social
partnership" between labor organizations and govern-
ment, allied parties, and employers. In the early
1970s, however, a variety of inflammatory political,
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Figure 2
Industrial Countries: Workdays
Lost to Labor Disputes
Average annual number of days per 1,000 employeesa
5.000
a The number of days lost because of labor disputes is
divided by the number of employed persons in each
country or region to enable meaningful comparisons.
btncludes West Germany, France, the United Kingdom,
Italy, Denmark, Finland, Netherlands, Norway. Sweden,
as well as Canada and Australia.
c Estimated.
Source: OECD.
social, and economic issues culminated in a wave of
strike activity that swept across the industrial coun-
tries (figure 2 and appendix B). Labor strife centered
around public-sector unions-such as the bitter civil
service strikes in Sweden and Italy in 1971 and 1972
and the Danish general strike, led by public unions, in
1973. More radical leadership was particularly evi-
dent among teacher, technician, civil service, bank
employee, and transport unions
The 1974-75 Recession: Beginnings of Reversal
In our judgment, the 1974-75 recession marked a
turning point in the economic performances of the
industrial countries and, in retrospect, for industrial-
country unions. On the one hand, unions did relatively
well during the recession as high worker expectations,
the protective cushion provided by elaborate welfare
systems, and strong public support helped industrial-
country unions maintain real wage growth. More than
half of the countries in Western Europe experienced
real wage increases exceeding 5 percent a year during
1974-75, and in several countries-France, Austria,
Belgium, Norway, and Spain-unions actually won
accelerated real wage increases (figure 3). Unions also
protected cost-of-living adjustments and minimum
wage legislation and successfully pressed for expand-
ing income-maintenance programs for their unem-
ployed members. On the other hand, employment in
the OECD declined for the first time in 20 years, and
joblessness rose to over 18 million.
During the 1976-79 economic recovery, unions found
themselves, for the first time in recent memory,
unable to maintain rapid wage increases, membership
growth, or even constituent job security. Several
factors played a part:
? High labor costs, for both wages and nonwage
items, and employee protection laws created major
disincentives for businesses to increase their work
force.
? Consumer-price inflation failed to subside, height-
ening the sensitivity of the electorate to the role of
wages and indexation in the inflation problem.
? Technological innovation and growing competition
from low-wage LDCs accelerated shifts in demand
for industrial-country labor.
? The large number of new entrants-young people
and women-to labor markets created a gro
labor surplus.
As a result, 1976-80 real wage increases in Western
Europe averaged only 2.1 percent a year, less than
half that achieved during the recession. In Japan, real
wage growth dropped to less than 2 percent annually.
Employment fell in Japan, and more than 600,000
manufacturing jobs were eliminated in West Europe-
an steel, textile, and automobile sectors. Concurrent-
ly, union membership fell in Japan for the first time in
one and a half decades; union rolls continued to grow
in Western Europe, but at a fraction of the pace of the
previous 10 years.
Major Setbacks in the 1980-83 Recession
The recent recession, coming hard on top of the
multiple economic problems of the 1970s, has, in our
opinion, caused major reductions in union strength,
bargaining power, and achievements.
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Figure 3
Industrial Countries: Selected Indicators of Economic Performance
Average annual percent change
I ceend United States
?Nominal wages
Consumer price
inflation
^ Real wages
\usi ralia
Source 01 (t)
HA,. Belgium, t)enm:irk, Finland, Ireland, Netherlands,
Norw:q. Spain. and Sweden. as well as Canada and
-S 1964-73 74-75 76-80
"Includes West Gennum, I ranee, the United Kingdom,
Economic Reversals. Real wage growth in Western
Europe fell to 0.8 percent in 1981 and declined to 0.5
percent in 1982 as employers took advantage of the
relatively strong bargaining positions provided by
high unemployment. In West Germany, the Nether-
lands, and the Scandinavian countries, real wages
declined in both years. In Japan during the same
period, real wages grew 1.2 and 1.5 percent, respec-
tively. A recent survey of collective bargaining agree-
ments indicates that unions are unlikely to regain
much lost ground this year on the wage front (see
highlighted text). Moreover, despite the lowest real
wage gains in more than a decade, the number of
industrial jobs available probably will continue to
decline this year, according to OECD estimates.
Membership Losses. Since 1979 union membership in
most foreign industrial countries has fallen sharply.
Although union rolls in Japan have declined only
slightly, unions in Western Europe have lost an
estimated 2 million members either through attrition
or because of members' frustration with trade union
leadership:
? The Trade Union Association (DGB) of West Ger-
many was down 200,000 members in 1981 and
probably at least that many again in 1982.
? As of 1982, membership in the United Kingdom's
Trade Unions Congress (TUC) was down I million
from the 1980 membership.
? Italy's General Confederation of Labor (CGIL) lost
135,000 members last year, and the Italian Union of
Labor (UIL) reportedly lost 56,000.
? In the Netherlands, union strength fell by 70,000 in
1981 and by an additional 90,000 in 1982.
? Sweden's Federation of Trade Unions (LOS) lost
more than 300,000 members during 1980-82.
Union finances have suffered losses commensurate
with sliding membership, reducing strike and worker
aid funds.
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Collective Bargaining Developments
In Japan, Tokyo imposed a one-year pay cap last fall
on 3 million federal employees. The cap is expected
to filter down to prefectural and local government
employees as well as the public corporations, eventu-
ally affecting some 6 million civil servants. Originally
scheduled to receive raises of 4.58 percent, the work-
ers will receive only the 2 -percent increment guaran-
teed under the government's pay scale provisions.
In West Germany, the poor economic situation-
approximately 2.5 million unemployed and only
slight GNP growth expected in 1983-made union
mobilization for the annual wage round nearly im-
possible. Work stoppages in 1982 were at the lowest
level since 1951, reflecting a lack of worker interest in
confronting employers. Bonn, in an effort to influence
1983 settlements, broke tradition and announced a
2 -percent wage hike for the 1.7 million national civil
servants in advance of most private-sector wage nego-
tiations. Pay raises averaged about 3 percent
Wage and price controls were in effect for much of
last year in France as the socialist government sig-
naled its intention to get a grip on inflation. Mitter-
rand's wage guideline for 1983 is 8 percent, and, thus
far, agreements covering 3.6 million workers have
been signed that fall within the guideline while
negotiations with another 6.4 million workers contin-
ue. Last October, when the freeze was officially
ended, Paris set the tone for bargainers by holding
public-sector pay raises to 3 percent. Workers have
also taken 10 billion francs' worth of aggregate cuts
in unemployment benefits, but left-leaning unions are
still reluctant to severely criticize the socialist gov-
ernment
Prime Minister Thatcher of the United Kingdom is
pushing hard for a 4 -percent ceiling on pay increases
this year-the maximum treasury contribution that
she is allowing to public agencies for salary hikes.
Most local authority workers have already settled at
this amount. Usually militant miners docilely accept-
ed a 6.2 percent increase. The waterworkers' strike,
however, resulted in a double-digit pay raise, which
prompted legislative proposals to ban public unions
from striking. The three things that might ignite
labor in 1983-more than 3 million unemployed;
antiunion legislation restricting activity in strikes,
representation disputes, and secondary boycotts; and
lower public pay guidelines-have drawn scant reac-
tion from members. Trade unions, which provide 75
percent of the Labor Party's operating budget and 95
percent of its campaign funds, were further humbled
by the overwhelming Conservative electoral win.
In Italy, negotiations with the United Federation of
Labor have led to a restructuring of the scala mobile,
the wage indexation system. Implementation of the
new labor cost agreement in February resulted in a
cost-of-living increase that was 18 percent below what
workers would otherwise have received. The change
in the method of computing the wage adjustment is
likely to chip a percentage point off of the 1983
inflation rate and should have even greater cumula-
tive effects. Absenteeism-a chronic problem for
much of Italian industry because of the difficulty in
discharging even the most recalcitrant employees-
has declined to an average 10 percent at Fiat during
the previous two years. In a press interview Alfa
Romeo officials reported that absentee rates dropped
from nearly 17 percent in 1981 to less than 12 percent
in 1982.
The governments of smaller West European countries
are also moving aggressively to break the link be-
tween wages and prices. In the Netherlands, the
two largest unions accepted an approximate 2.5-
percentage-point annual reduction in the cost-of-
living adjustment in return for a reduced work-
week-to reach 36 hours by 1986. Belgium, too,
lowered the amount of the wage adjustment and froze
wages and prices following an 8.5-percent devaluation
of the franc last year.
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Denmark has suspended wage indexation until Janu-
ary 1985. National labor negotiations were concluded
that set wage hikes of 5 percent in 1983 and 1984 for
most workers and 4 percent for government employ-
ees-a probable 2- to 3-percent average decline in
real wages for all workers. Denmark has, however,
rejected the idea of following suit behind Sweden and
Finland which devalued their currencies last October
by 16 and 11 percent, respectively. According to the
press, Sweden's employers hope to take advantage of
union disarray to restructure the partial indexation
scheme in the new labor pact. Helsinki has also set
the removal of indexation as a priority goal, but
national incomes policy negotiations have stalled and
bargaining has shifted to the individual unions; most
contracts expired in March. Sweden, Denmark, and
Finland have each imposed wage and price freezes of
various types and durations.
Among the southern European countries, two general
strikes inspired by the Communist trade union were
attempted in Portugal last year for the first time in
48 years, and hostages were held in disputes, an
action reminiscent of the chaotic 1974-75 revolution-
ary period. Last year a ceiling was placed on civil
service salaries in an attempt to contain wage costs,
but average salaries in the major public enterprises
rose 15 percent. This year, workers at the national-
ized shipyards have already agreed not to strike and
to remove or reduce benefits in return for assurances
of job security. Additionally, legislation was passed
requiring 60 percent of all wage increases above the
national 17-percent guideline to be paid into the
social security fund. In Spain the national collective
bargaining negotiations are under way. Labor observ-
ers expect a new National Employment Agreement
that will result in about a 1-percent decline in real
wages this year. According to press reports, a labor
commission formed to break the negotiating deadlock
is also eyeing the possibility of permanently dropping
certain components of the price index used for wage
adjustments. In December, Greece announced an in-
comes policy reducing and delaying indexation. Ath-
ens and Lisbon have instituted extensive price con-
trols and devalued their currencies. Recent 25X1
legislation also prevents Greece's 200,000 government
employees from striking without obtaining a majority
vote in secret ballot.
Fewer than 700,000 persons will be seeking new
agreements in Canada this year. Since many con-
tracts are for three years, wage gains will probably
average somewhat higher this year than economic
conditions warrant. According to Embassy reports,
those unions that have negotiated recently have, in
general, been more concerned with job security than
with pay increases. Coal workers in British Colum-
bia, for example, agreed to slash scheduled 1 5- 25X1
percent pay increases to 8 percent and to go to four-
day workweeks for the remainder of 1983 to prevent
further layoffs. In Quebec, the so-called common
front of public-sector unions (300,000 members)
struck over the issue of job security. They had
already agreed to relinquish up to 19.5 percent of
their salaries and to place many teachers on avail-
ability-a system of part-time work that involves
gradually reducing hours and pay levels over a two-
year period to half current levels. National civil
servants were told to expect 5 percent this year-a
likely 2- or 3-percent decline in real wages.
Both Australia and New Zealand implemented wage-
price freezes to halt wage hikes that had reached 18
percent for some unions in 1981. Australia halted
indexation in mid-1981 and began freezing wages and
prices-at territorial discretion-early last year.
Federal workers will receive no raises during 1983.
New Zealand imposed a general one-year freeze on
wages and salaries which began last summer.
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Political Setbacks. Although union membership in
OECD countries remains substantial, we believe that
union influence in political and economic decision
making has lessened and that public support of unions
has declined, particularly in Western Europe.' Public
opinion polls in the Netherlands, Denmark, and
Sweden, for example, have indicated considerable
opposition to various union-backed plans for investing
pension and other wage-earner funds in programs to
promote employment
The decline in unions' strength and influence has
coincided with several setbacks to their fraternal
political parties. Socialist-labor parties left govern-
ment last year in West Germany and Denmark. The
previous year, Belgium's Prime Minister Martens
took office with the avowed aim of cutting social
spending, and Norway formed a minority conservative
government for the first time in 52 years. Even where
socialist governments have dominated recent politics,
as in France, Spain, Greece, and Sweden, economic
policies in these countries have had a distinctly con-
servative twist.
Government support for trade union interests has also
declined. Wage cuts or freezes have been proposed or
implemented in nearly half of the OECD countries
(table 1), and several West European governments
have derailed wage indexation schemes that were the
crowning achievement of organized labor in the 1960s
and 1970s. In our judgment, a significant indicator of
waning union strength was the reduction in Italy's
scala mobile, an automatic cost-of-living adjustment
covering most private and public employees. Conces-
sions on indexation have also been made by unions in
Belgium, Denmark, Greece, Ireland, the Netherlands,
Norway, Spain, and Switzerland. Even Mitterrand's
socialist government has taken advantage of union
weakness and political alignment to restrict wages and
' For a detailed discussion of the political dimensions of trade union
issues, see Unemployment and Economic Stagnation Radicalize
European Labor, INR Report 460-AR, September 1982; European
Labor Mobilizes Against Unemployment and in Defense of the
Welfare State, INR Report 234-AR, September 1981; and Unem-
ployment and the Welfare State Crisis Confront European Labor,
INR typescript, November 1982
Table 1
Industrial Countries:
Restrictions on Prices and Wages, 1981-83
Price Wage Reduced Currency
Controls Freezes- Index- Devalu-
ation ations b
United Kingdom a
Italy
Canada
Sweden X
Switzerland X
a Includes national civil service pay freezes enacted or proposed in
recent moths in addition to general wage freezes. Also, includes
countries where the freeze has already been nominally lifted, such
as France. Does not include countries, such as the United Kingdom,
that have issued guidelines but have not actually prohibited pay
raises.
b Devaluations lower real wages by raising the prices of imported
items.
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reduce unemployment benefits, and Papandreou's so-
cialist government in Greece has attacked unions
head on in recent legislation restricting the right of
public unions to strike
Union Reactions. Faced with economic instability,
declining membership and bargaining power, and
faltering influence in national politics, leaders of
predominantly socialist unions have had to accept
austerity in government programs they support. In
some cases they have tried, with little success, to take
their case directly to the people. Most of the recent
labor protest campaigns, including brief work stop-
pages in the United Kingdom, Italy, and France, have
been of such a nature, focusing on unemployment,
monetary policies, and wage restraints. Concurrently,
unions have sought to retain worker support and
enthusiasm by concentrating their attention on inter-
national issues. The European Trade Union Confeder-
ation, for example, has issued public calls for:
? Restraints on multinational corporations.
? Detente between the United States and the Soviet
Union.
? Dialogue between developed and developing nations.
? Collaboration by unions, parties, and political activ-
ists to protest US foreign policy.
Moreover, although most major union federations
have not done so, individual unions have begun to
cooperate with autonomous protest movements-
environmentalist, prodisarmament and antinuclear,
ethnic, and others. We believe that these connections
are an attempt by unions to regain political clout by
piggybacking on popular movements. In the Nether-
lands, for example, militant members of the dock-
worker, teacher, and metalworker unions joined peace
movement efforts to oppose the deployment of NATO
intermediate-range nuclear weapons on Dutch territo-
ry. Pressure from Norway's major labor confedera-
tion, the LON, and from peace movement members
locked the Labor Party into a rigid electoral campaign
position of support for the Nordic nuclear-weapons-
free zone. In West Germany, the metalworker, teach-
er, and printer unions have opposed INF deployment,
and the press reports that the major union federation
(DGB) will criticize the INF program at its annual
peace festival this September.
Outlook
Although the recession has contributed to recent
setbacks, we believe that basic structural shifts
in developed-country economies are working against 25X1
organized labor:
? Much union power resides in basic manufacturing
industries such as iron, steel, and other metals;
automobiles; petroleum; rubber; and chemicals. De-
mand for many of these products has slackened in
the industrial countries, and competition from de-
veloping countries is intense. Employment growth
prospects are nearly nonexistent-several industries
have been reducing jobs for more than a decade and
cannot provide a springboard for union resurgence.
? Concurrently, employment-growth fields in infor-
mation services, communications, and other elec-
tronic equipment production have not been fertile
areas for union organization. Firms in these product
lines are generally newer, smaller, more competitive
ventures employing relatively few skilled
technicians.
? Austere government budgets and a more conserva-
tive political outlook in many industrial countries 25X1
make it less likely that public service will be a
growth sector in the 1980s. Consequently, public
unions-organized labor's power base of the
1970s-probably will also find their influence
eroding.
In addition to these demand-for-labor factors that we
believe will tax union strength during the next several
years, labor-supply trends also are likely to be a
constraint. According to our projections, the West
European labor force, for example, will rise by
9 million persons between now and 1990, keeping
unemployment a serious problem until late in the
decade.'
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In this environment of weakening political and eco-
nomic influence, labor leaders are likely to become
preoccupied with hindering developments that could
accelerate structural economic changes. According to
Department of State reports and press interviews with
union leaders, the primary concerns of organized
labor for the 1980s include:
? The effects of mass unemployment and economic
stagnation on the labor force and organized labor.
? Technology and job security.
? Declining labor mobility.
? High interest rates, currency devaluation, disinvest-
ment, and capital markets.
? The concentration of economic power under foreign
control.
? Uncertainties under the international monetary
system.
? Economic rivalries among the industrial countries.
? Competition from LDCs.
The nature of these concerns suggests increased em-
phasis by trade union movements on international
sources of labor and union problems. To the extent
that governments address these concerns, further ten-
sion could be injected into economic relations with the
United States. In particular, unions seem likely to
argue that existing international trade, investment,
and monetary arrangements are impediments to re-
storing economic security. This focus on international
issues has already led some union leaders to criticize
NATO missile deployment and sanctions against the
Soviet-West European pipeline.
In addition, we believe that the decline in union
strength will continue to have a strong influence on
the political makeup of Western Europe.' Recent
election results in the United Kingdom, West Germa-
ny, Norway, and the Netherlands show that many
members of the principal socialist-dominated labor
unions split their vote between the center-right and
radical left. We believe that the swing to the left
reflects the growing involvement of younger members
and union militants in protest parties or antiestablish-
ment groups out of frustration over their inability to
influence politics by traditional means. Whether the
gains to the center-right will be permanent is uncer-
tain. Economic recovery could solidify the shift by
union members to conservative voting stances if the
association is made between conservative governments
and economic success. A continuation of economic
difficulties, however, could cause a swing back to the
left
Over the longer haul, widespread frustration because
of union impotence in wage and job security issues
could potentially find an outlet in political activism,
general labor strikes, and, less likely, civil disorder.
Work stoppages primarily for job-related reasons,
however, are likely to remain relatively insignificant
until recovery is well under way and union confidence
is restored.
In terms of the strictly economic fallout, declining
union strength could benefit industrial-country
economies:
? Less stringent work rules, resulting from reduced
bargaining power, may reduce union resistance to
changing job tasks; this would speed structural
adjustment and improve efficiency and worker
productivity.
? Union roles in public education through extensive
use of apprenticeships, narrowly focused technical
instruction, and on-the-job training-particularly
important in Western Europe-probably will dimin-
ish as it becomes evident that this emphasis on
specialization has reduced labor force flexibility.
medium-technology goods
Moreover, weaker unions in Western Europe could
aid in the revitalization of European competitiveness.
The gap between changes in West European unit
labor costs and those in Japan and the United States
has narrowed in recent years. If the relative labor cost
performances continue, some of the loss in overall
competitiveness previously suffered by West Europe-
an industries in the 1970s could be regained. This
outcome is not likely to pose a challenge to US-
Japanese dominance in high-technology products-
where labor costs are not as important-but could
mean a gain in West European trade shares for
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Appendix A
Union Membership in the
Industrial Countries
Union membership, as a share of the total work force,
declined between the end of World War II and the
late 1950s. Labor force growth was rapid during this
time-outpacing both employment growth in union-
dominated sectors and the rate at which new indus-
tries were organized. Between 1960 and 1975, labor
unions staged a comeback by switching their organi-
zational efforts from mining and manufacturing to
the rapidly growing public-service sectors. After 1975
there was noticeably less organizational activity, and
the ratio of union to nonunion workers remained
almost constant until the current recession began in
1980. Since then, West European unions have lost
millions of members-estimates are both incomplete
and imprecise-to layoffs and plant closings. The
United States and Japan have also experienced erod-
ing union membership but to a much lesser degree.
Most of the labor union membership statistics in the
following tables were published by either the OECD
or by the governments of the respective countries.
Some numbers reported in the press were used when
they appeared to be consistent with official data.
Problems of international comparison are quite seri-
ous. Deficiencies include:
? Inflated reporting by unions.
? Incomplete coverage of labor organizations in gov-
ernment reports.
? Gaps in time series.
? Inconsistent definitions of union membership.
We believe that the data are best used to compare
changes in membership within a country or region
over time and not differences between countries.
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Table 2
Selected Industrial Countries:
Trends in Union Membership
Membership/ Percent of
1960
Labor Force
United States
Membership
18,117
Percent of labor force
23.6
Japan
7,516
16.7
6,379
24.0
2,600
14.0
8,299
36.9
6,102
29.3
1,459
23.5
1,912
46.6
1,468
39.9
706 d
33.7
275
30.0
1,325
41.1
Thousands
(except where noted)
1965
1970
1975
1980
18,519
20,752
21,129
21,896
22.4
22.6
22.3
20.9
10,147
11,605
12,590
12,309
21.2
22.7
23.7
22.0
6,574
6,700
7,365
7,883
24.3
25.0
27.9
29.5
2,858
3,578
3,796
3,800
14.5
17.0
17.7
16.9
8,868
10,002
12,193
12,947
37.4
43.4
51.2
53.7
7,128
8,070
11,250
10,788
36.1
41.8
57.3
51.8
1,589
2,173
2,884
3,278
23.2
27.2
29.8
31.3
2,100
2,433
2,774
NA
45.0
44.4
45.3
NA
1,642
1,720
NA
2,000
43.4
44.9
NA
48.3
NA
NA
1,307
1,702
NA
NA
52.6
63.8
NA
NA
1,332
1,587
NA
NA
58.6
68.6
1,435
1,524
1,710
1,792
31.6
32.1
34.3
33.7
550
570
602
37.7
38.1
37.6
1,900
2,100
2,146
53.7
56.2
54.8
a Includes only the DGB (German Trade Union Association).
b Includes only the major confederations, which represent approxi-
mately two-thirds of total union membership. An estimated one-
fourth of union constituents pay no dues.
Because pensioners and associate members are usually counted as
active members, membership estimates are exaggerated by 10 to 25
percent.
d Includes only LOD (Danish Federation of Trade Unions).
e Includes only LON (Norwegian Federation of Trade Unions),
which represents about 80 percent of total union membership.
f One official trade union was legislated in 1938 to which all
employees theoretically belonged. In 1977 the divestiture of the
different unions, apparent before, was legalized, and the freedom of
association and right to strike were recognized by royal decree.
636
750
36.4
38.1
4,385
33.8
2,819
3,413
68.3
79.0
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Table 3
Selected Industrial Countries:
Current Union Membership,
by Major Unions or Union Federation a
United States
AFL-CIO (American Federation of Labor-Congress of Industrial 112 16,699
Organizations)-
Independent unions 63 5,197
Japan b
SOHYO 50 4,553
DOMEI
CHURITSUROREN
SHINSAMBETSU
International Metalworkers Federation Council
International Federation of Chemical, Energy, and General Workers'
Union, Japanese Affiliate
Independent unions
West Germany
DGB (German Trade Union Association)
DAG (German White Collar Trade Union)
DBB (German Civil Servants Association)
Other
France
Affiliated Membership
Unions (thousands)
2,147
1,337
63
1,864
679
7,883
495
821
63
CGT (General Confederation of Labor) 40 2,500
CFDT (French Confederation of Democratic Workers) 29 600
500
Australia
ACTU (Australian Council of Trade Unions) including:
Amalgamated Metalworkers and Shipwrights
AWU (Australian Workers Union)
SDA (Shop, Distribution, and so forth)
FCU (Federated Liquor and Allied Clerks)
Belgium
1,400
163
139
135
120
CSC (Confederation of Christian Unions)
FGTB (General Confederation of Labor in Belgium)
CGSLB (General Confederation of Liberal Trade Unions)
Denmark
LOD (Danish Federation of Trade Unions)
FDTF (Joint Council of Danish Public Servants and Salaried
Employees' Organization)
Other
1,046
1,113
120
1,249
277
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Table 3
Selected Industrial Countries:
Current Union Membership,
by Major Unions or Union Federation a (continued)
Affiliated Membership
Unions (thousands)
AKAVA (Central Organization of Professional Workers Association)
49
157
CTEOF (Confederation of Technical Employee Organization)
12
99
Independent unions
14
12
730
352
AUEW (Amalgamated Union of Engineering Workers)
1,510
NUGMW (National Union of General and Municipal Workers)
967
Nalgo (National and Local Government Officers Association)
753
Nupe (National Union of Public Employees)
692
Other unions with membership of more than 100,000
22
4,834
Italy e
CGIL (General Confederation of Labor)
38
4,300
CISL (Confederation of Workers Unions)
41
3,000
UIL (Italian Union of Labor)
32
1,200
CISNAL (National Confederation of Italian Labor)
64
2,000
Canada
AFL-CIO/CLC (the US AFL-CIO and the Canadian Labor Congress)
96
2,204
including:
154
United Automobile, Aerospace, and Agricultural Implement Workers
130
of America (CLC)
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Affiliated Membership
Unions (thousands)
Norway
LON (Norwegian Federation of Trade Unions) 36 750
Spain
UGT (General Workers Union) 15 2,000
CSCO (Workers Commissions) NA 1,605
CNT (National Confederation of Labor) NA 140
USO (Union of Organized Labor) NA 640
Sweden
LOS (Swedish Federation of Trade Unions) 25 2,127
TCO (Central Organization of Salaried Employees) 21 1,043
SACO-SR (Swedish Confederation of Government Employees) 26 225
_, Latest available data used for breakdown of union membership; in
most cases 1981 information was latest available.
n A movement is under way to unify Japan's private-sector unions
under ZEN MIN ROKYO (National Council of Private-Sector
Labor Unions).
The Economist claims that the actual number of dues-paying
members is nearer 1.5 million.
a TUC membership had declined to 11.5 million by the end of 1982,
according to press reports.
Because pensioners and associate members are usually counted as
active members, membership estimates are exaggerated by 10 to 25
percent.
I One official trade union was legislated in 1938 to which all
employees theoretically belonged. In 1977 the divestiture of the
different unions, apparent before, was legalized, and the freedom of
association and right to strike were recognized by royal decree.
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Appendix B
Work Stoppages in the
Industrial Countries
The accompanying chart ranks OECD countries by
the average amount of time lost to industrial disputes
in recent years. Countries that experience the greatest
losses to strikes generally have smaller collective
bargaining units and more frequent negotiations than
do others. Almost all countries with enterprise-level
wage bargaining-as in Canada and the United King-
dom-are more strike prone than countries with
primarily national-level bargaining, such as West
Germany or Sweden. European unions in general
strike more frequently than do their North American
counterparts, but actions are seldom as long lived.
Strikes remain the basic form of action used in
industrial disputes; lockouts are used sparingly and
probably represent less than 1 percent of all days lost
to labor conflicts. Other forms of pressure exerted by
employees include slowdowns or "work-to-rule" ac-
tions that, by strict adherence to the letter of often
forgotten or obsolete rules, seriously impair normal
activities. Sickouts are commonly used in many coun-
tries, and sometimes entire plants will "resign" on the
same day. Unions in the United Kingdom have prom-
ised to work "without enthusiasm" until a grievance is
satisfactorily addressed. Action by Japanese unions,
in sharp contrast, seldom affects production because
of the workers' close identification with the firm, but
it often entails demonstrations outside the plant to
signal dissatisfaction.
There are certain ambiguities in strike and lockout
data:
? All governments exclude disputes below a certain
size.
? A distinction must be made between workers that
are directly involved in strikes and those indirectly
rendered idle.
? Estimates of workdays lost are affected by different
methods of incorporating the workweek, paid holi-
days, and vacations in the statistics.
? Some countries routinely exclude certain industries
from the statistics.
Figure 4
OECD: Workdays Lost to Strikes
and Lockouts, 1976-79
Average annual number of days per 1,000 employeesi
0 200 400 600 800 1,000 1,200 1,400 1,000
Ireland
Iceland
Spain
Italy
Canada
United Kingdom
New Zealand
Australia
Finland
United States
Belgium
France
Turkey
Denmark
West Germany
Portugal
Japan
Norway
Sweden
Switzerland
Austria
Netherlands
a The number of days lost because of labor disputes is
divided by the number of employed persons in each
country to make crosscou n try comparisons meaningful.
Source: OECD.
? Some countries exclude lockouts from official
statistics.
Despite a certain lack of precision, we think the data
are reasonably accurate and usable.
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Table 4
Industrial Countries: Work Stoppages, 1964-82 a
4,332.6
5,383.4
5,552.5
5,052.7
3,873.0
2,133.8
2,606.2
2,262.0
1,952.5
1.366.0
397.3
343.2
1,357.6
2,478.8
4,301.0
1,775.5
1,133.0
Workers involved (thousands)
1,152.1
1,761.6
3,176.6
789.3
562.9
Workdays lost (per 1,000 employees)
67.7
92.0
169.0
33.1
50.0
West Germany
192.0
45.2
Workdays lost (per 1,000 employees)
3.9
52.7
5.0
France
Disputes
1,468.2
3,462.4
3,634.5
3,490.0
3,542.0
Workers involved (thousands)
2.001.0
2,161.0
1,695.3
1,403.6
500.8
Workdays lost (per 1,000 employees)
105.0
153.1
171.4
172.0
79.8
United Kingdom
2,317.5
1,330.0
Workers involved (thousands)
1,058.9
1,581.2
1,217.6
1,870.8
833.7
Workdays lost (per 1,000 employees)
122.5
516.2
420.6
Italy
Disputes
3,090.8
4.414.6
4,387.5
2,623.2
2,238.0
Workers involved (thousands)
2,910.0
5,111.6
10,967.2
Workdays lost (per 1,000 employees)
564.5
1,086.0
1,268.6
Canada
987.5
1,026.0
663.2
442.2
Workdays lost (per 1,000 employees)
499.9
766.1
844.6
Australia
Disputes
1,401.2
2,398.4
2,620.5
2,116.0
2,419.0
Workers involved (thousands)
523.8
1,179.2
1,701.4
1,431.2
1,170.1
Workdays lost (per 1,000 employees)
178.7
438.3
837.8
New Zealand
Disputes
117.0
495.7
352.0
Workers involved (thousands)
29.8
169.1
108.1
Workdays lost (per 1,000 employees)
129.1
488.6
414.3
Austria
Workers involved (thousands)
63.7
3,003.0 1,201.0
1,253.0 646.4
275.8 83.6
NA NA
NA NA
35.0 NA
NA NA
NA NA
2.3 1.1
NA NA
NA NA
71.8 117.1
NA NA
NA NA
NA NA
NA NA
NA NA
809.2 414.8
NA NA
NA NA
NA NA
NA NA
282.0 206.6
NA NA
NA NA
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Belgium
Disputes
57.4
157.2
239.0
227.7
NA
Workers involved (thousands)
33.6
69.7
70.8
79.7
NA
Workdays lost (per 1,000 employees)
88.0
219.7
157.4
213.6
56.4
Denmark
Disputes
27.6
79.2
140.5
241.0
225.0
Workers involved (thousands)
14.3
88.6
100.7
84.9
62.1
Workdays lost (per 1,000 employees)
23.1
344.4
60.6
76.1
NA
Finland
Disputes
73.2
619.0
1,662.5
1,938.5
2,182.0
NA
NA
Workers involved (thousands)
30.7
321.2
292.9
96.6
407.3
NA
NA
Workdays lost (per 1,000 employees)
75.8
568.1
161.5
468.7
728.8
291.4
63.1
108.0
106.2
14.0
28.5
4.2
Workdays lost (per 1,000 employees)
873.1
1,230.1
Ireland
Disputes
98.4
142.8
185.0
150.2
NA
NA
Workers involved (thousands)
35.2
37.7
36.3
39.6
NA
NA
Workdays lost (per 1,000 employees
466.4
501.3
401.3
1,596.5
NA
NA
Netherlands
Disputes
30.4
36.0
9.5
17.5
28.0
NA
Workers involved (thousands)
9.8
35.6
1.6
21.4
26.4
NA
Workdays lost (per 1,000 employees)
5.8
46.8
0.8
0.9
11.2
4.8
Norway
Disputes
6.0
10.0
17.5
18.5
35.0
Workers involved (thousands)
0.6
2.0
12.7
7.8
18.8
Workdays lost (per 1,000 employees)
4.5
11.8
99.6
29.5
54.3
Portugal
Disputes
NA
NA
NA
258.7
269.0
NA
Workers involved (thousands)
NA
NA
NA
143.6
289.6
NA
Workdays lost (per 1,000 employees)
NA
NA
NA
52.0
135.0
NA
Spain
Disputes
241.0
805.6
2,408.0
2,166.0
NA
NA
Workers involved (thousands)
108.9
296.3
530.8
3,772.1
NA
NA
Workdays lost (per 1,000 employees)
16.4
66.1
138.1
1,212.3
NA
NA
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Table 4
Industrial Countries: Work Stoppages, 1964-82 a (continued)
Sweden
Disputes
12.4
65.4
85.5
103.5
212.0
NA
Workers involved (thousands)
6.4
22.0
20.6
15.6
746.7
NA
Workdays lost (per 1,000 employees)
21.0
58.6
52.3
10.8
1,057.2
NA
Switzerland
Disputes
1.4
4.0
4.5
11.5
5.0
NA
Workers involved (thousands)
0.1
0.6
0.3
1.4
3.6
NA
Workdays lost (per 1,000 employees)
0.0
0.8
0.7
5.5
1.9
NA
Disputes
61.2
92.2
109.0
124.7
NA
NA
Workers involved (thousands)
7.6
14.5
18.4
77.0
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
a Average annual data on work stoppages. Workdays lost are per
thousand employed persons to enable meaningful cross-country
comparisons of labor strife.
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