Unionization Case Study

It has been certainly established that globally, unionization has declined. This paper discusses the trends and the factors that led to the decline in unionization worldwide

It was assumed till a long time that unionization trends followed business cycles in an industry. So, when the industry flourishes, there is a growth in the unionization and vice versa. The pattern of union growth or decline was studied on the basis of cyclical factors like unemployment, inflation etc. The scope of this article has expanded to also include structural, economic and sociopolitical factors along with cyclical factors. The paper first identifies and traces the factors that led to the decline of unionization in five countries namely United States of America,

Globalization particularly foreign direct investment and exports increased the competition which led to decline in unionization (Slaughter, 2007).

- With the rise of privatization, the employment share of public sectors which was the strongholds of trade unions, came down drastically.

- Other structural changes like decentralization of enterprise bargaining, increasing number of women in employment, and increasing education level also contributed (Visser, 2003).

- The manufacturing share of employment (which has been the stronghold of unions) is declining and there is an increase in service sector.

- There are changes in the wage structure of the workers ; pay for performance and fringe benefits have increased tremendously. The workers do not want to risk losing the sizeable chunk of benefits and hence collective action and strike activities have reduced leading to a decline in unionization. The union and non-union workers have a wage gap which is in favour of non-union workers.

- Also, the rise of new human resources (HR) practices like carrying out commitment initiatives, engagement initiatives etc. coupled with the stalling tactics adopted by employers has contributed to union