Trade Unions and Social Democratic Parties Yesterday

and Today

Lucio BaccaroMIT

European Social Democracy: Roots and Prospects

13-14 March 2008Hotel De la Minerve, Rome

Data

• On unions, collective bargaining coverage and structure, social concertation, and social democratic strength

• Time frame: 1974-2003

• Countries: EU15 (plus Norway-Luxembourg): Aus, Bel, Den, Fin, Fra, Ger, Gre, Ire, Ita, Net, Nor, Por, Spa, Swe, UK

Share of Seats SD Parties (Lower

Chamber) Union Density

Collective Bargaining

Coordination

Collective Bargaining Coverage

1974-2003 0.35 46.09 3.60 77.83

  (34.91)*  

1974-1983 0.34 51.22 3.85 77.21

  (43.16)*  

1984-1993 0.35 46.12 3.39 78.14

  (34.85)*  

1994-2003 0.35 41.31 3.58 78.10

  (27.62)*    

* excluding Belgium, Denmark, Finland, Norway, and Sweden

SD Parties, Trade Unions, and Industrial Relations Characteristics

Developments in Trade Unionism and Collective Bargaining

• There is a long-term declining trend in union density ratios– Growing gap between the “median worker” and the

median constituent of trade unions

• Union coverage rates have not declined – Generally much higher than density rates

• Little sign of deregulation in the collective bargaining structure– On average, European collective bargaining is

organized between the industry (3) and the national (4) level

Government Willingness to

Concert: Wages

Government Willingness to

Concert: Welfare

Government Willingness to Concert: Both

Social Pacting: Wages

Social Pacting: Welfare

Social Pacting: Both

1974-2003 0.63 0.59 1.23 0.44 0.45 0.89

   

1974-1983 0.71 0.45 1.18 0.45 0.36 0.81

   

1984-1993 0.62 0.58 1.20 0.44 0.44 0.88

   

1994-2003 0.57 0.72 1.29 0.44 0.53 0.97

Governments and Social Concertation

Trends in Social Concertation

• No secular decline. If anything, an increase…

• Over time, there’s less concertation on wage and more on welfare issues

• The gap between Willingness and Pacting tends to close over time: it becomes easier to strike deals

Government Willingness to Concert: Wages

Government Willingness to

Concert: Welfare Social Pacting: Wages Social Pacting: Welfare

1974-2003 0.21 0.19 0.18 0.17

(3.97***) (3.4***) (3.35***) (3.26***)

1974-1983 0.23 0.11 0.26 0.23

(2.57**) (1.07) (2.76***) (2.48**)

1984-1993 0.38 0.40 0.32 0.35

(4.35***) (4.51***) (3.6***) (3.94***)

1994-2003 0.05 0.00 -0.03 -0.08

(0.49) (-0.04) (-0.35) (-0.89)

Exploratory Regressions: Changing Impact of SD Control of Government on Willingness and Pacting over Time

All regressions include a constant. Z-statistic in parenthesis, P>|z|: *<0.1; **<0.5; ***=0.01 (two-tailed)

Dep. Variable:

SD Parties and Social Concertation

• From the early 1990s on, a social democratic government in power is no more likely to engage in concertation with trade unions (and employer associations) than any other party government

• This is unlikely previous periods, especially the 1984-1993 decade

The End of Classic Social Corporatism

• Social corporatism was based on “political exchange” – Government’s commitment to full employment, unions’ delivery

of wage moderation through centralized bargaining– Acknowledgment by unions of the employers’ “right to manage”

& auto-limitation of industrial conflict– Wage moderation was exchanged for ever more favorable

welfare provisions as well as increases in living standards in line with productivity growth

• Outcomes: earnings compression, large public sector, a largely decommodified social protection system

• All of this was premissed on a completely different international economic regime (“embedded liberalism”)

The New Corporatism

• Much less redistributive and decommodifying than the past

• The new pacts aim to gradually flexibilize/liberalize the welfare state and the labor market, within the framework of a tight control over wage dynamics– Limited availability of side payments for trade unions

and their constituencies

• A better predictor than party government has possibly become electoral strength of government

In Which Direction Are Unions and SD Parties Moving?

• Further apart?• In the medium run, social concertation

agreements will probably continue as the need to “modernize” national economies persists

• Short of a renewed ability of trade unions to increase their ability to represent the “median worker,” in the future trade unions may increasingly be perceived as special interests

• The tradition of social concertation may in that case come to an end to be absorbed by the more pluralistic (and vague) notions of “partnership” and “governance” (e.g. Third Way)