Tuesday, September 6, 2016

Union Density and Collective Bargaining Coverage: International Comparisons

Union membership varies wildly across high-income countries. In addition, there is a phenomenon of "collective bargaining coverage," often not familiar to American readers, which measures the share of workers who are covered by collective bargaining agreement, even though they are not union members. In the US, union density is almost the same as collective bargaining coverage. But in France, only 7.7% of workers are actual union members while 98% of workers are covered by collective bargaining agreements. Here are some facts on these patterns across high-income countries from the OECD publication called Economic Policy Reforms 2016: Going for Growth.

As a starter, here are figures showing the variation in the share of workers who are covered by a collective bargaining agreement (Panel A) and the share actually belonging to a union (Panel B). Just glancing at the figure should offer two lessons: 1) There's a lot of variation across countries; 2) Many of the coverage rate percentages are substantially higher than the union membership percentages; that is, in a lot of countries a large share of workers will find that their compensation is determined by collective bargaining, even though they are not a union member.

Here are some specific examples of the differences between union density and collective bargaining coverage, drawing from the OECD data:

Union Density and Collective Bargaining Coverage, 2013

Density (%)
Coverage (%)
United States (USA)

Japan (JPN)
Canada (CAN)
United Kingdom (GBR)
Germany (DEU)
Spain (ESP)
Italy (ITA)
Sweden (SWE)
France (FRA)

This blog post isn't the place to dissect unionization patterns around the world. But I'd offer a few thoughts:  

1) US levels of union density and collective bargaining coverage are lower, and often considerably lower, than in other high-income countries. 

2) It seems clear that the  rules governing union formation and membership differ widely across countries, as do the rules by which many workers in many countries find that their compensation is collectively bargained. In many countries, union membership and collective bargaining are not at all the same thing. 

3) What people think of when referring a "union" or  a "collective bargaining agreement" will differ across countries, often in quite substantial ways. For example, the idea of not being in a union, but being covered by collective bargaining, seems strange to the Americans, Canadians and British, but common to the French, Spanish, Germans and Swedes. A union or a collective bargaining arrangement that represents a small share of the workforce can focus on its own members, and pay less attention to how its negotiations affect the broader labor force. A union or collective bargaining agreement that represents most workers will need to take a different perspective. The legal and traditional powers of unions vary substantially, too. Whenever referring to unions or collective bargaining, it's useful to be clear on what flavor of these arrangements you are describing. 

4) The OECD countris are the high-income countries of the world, which in turn suggests that an array of union and collective bargaining agreements can be broadly compatible with a high-income economy. Any labor market tradeoffs that arise are from the specific details of the institutional structure and decisions made by these unions and collective bargaining agreements.