Workers of the World Divide


Labor unions underwrote the affluence of the American working class in the twentieth century. They ensured that manual work paid white-collar wages and gave a collective voice to workers in the political process. The story of labor’s decline is often told with an air of inevitability; unions became outmoded as American capitalism became more dynamic. In such an account, the consequences of deunionization — rising inequality, wage stagnation, and declining political participation — appear equally inevitable. But the story has not played out the same way everywhere. The turbulent economic conditions of the 1970s affected all the advanced economies. In the small, trade-dependent economies of Scandinavia, highly centralized unions were able to restrain wage growth, curb inflation, and maintain employment. In Germany, unions expanded their role in workplace governance and the training of skilled workers. Although the proportion of union members among workers did decrease in western Europe during this time, it did so far less than in the United States. And the coverage of collective-bargaining rights generally held steady. European labor unions still represent a broad constituency of workers and actively contribute to their countries’ economic success. Moreover, although some claim otherwise, unions have not made the global economic crisis there worse. Where national unions have historically had a role in macroeconomic management — in Belgium and the Netherlands, for example — negotiations over wages and working hours helped head off big increases in unemployment in the wake of the 2008 financial crisis. American unions have faced the same challenges as European ones but have struggled far more.

more from Bruce Western and Jake Rosenfeld at Foreign Affairs here.