Union Decline – It’s not just in America anymore

The decline of organized labor in America’s private sector is a well-known story, but less known to Americans is how much the rest of the Anglosphere shares this trend. As the UK’s New Economist blog notes:

In Canada, union membership levels increased by 62,000 in 2006, while union density fell from 30.0% in 2005 to 29.7% in 2006. “Those in the public sector …were four times as likely as their private-sector counterparts to belong to a union (71.0% versus 17.5%)”, writes StatsCanada.

In the United States, the BLS reported in January that 12.0% percent of US employed wage and salary workers were union members in 2006, down from 12.5% a year earlier. “The union membership rate for government workers (36.2 percent) was substantially higher than for private industry workers (7.4 percent).” Less than one in twelve private sector workers are in a union! [Emphasis added.]

The latest Australian union membership data, released earlier this month, reported that the proportion of employees who were trade union members slumped from 22.4% in August 2005 to 20.3% in August 2006. By my calculations (see Excel time series), this was the largest percentage point decline since 1999.

Yesterday saw a similar trend reported in the United Kingdom. According to the latest annual statistical report:

The rate of union membership (union density) for employees in the UK fell by 0.6 percentage points to 28.4 per cent in 2006, down from 29.0 per cent in 2005. This was the largest annual percentage point decline since 1998.

Another way to describe private sector union decline is labor market flexibility.

However, Britain shares another (worrying) trend with America, in that, “UK public sector union density (58.8) was again much higher than private sector (16.6%).” In other words, on both sides of the Atlantic, unions are becoming more and more concentrated in government, where the traditionally adversarial relationship between unions and management doesn’t occur. Unlike in profit-making businesses, government agency managers and their subordinates share the same goal: to get as much money from state coffers as possible. Since John Sweeney, who formerly headed the Service Employees International Union, became head of the AFL-CIO in 1995, U.S. organized labor has taken a sharp left turn —  a trend that is likely to continue. (Thanks to Iain Murray for the New Economist link.)