Abstract
Current theories of unions are mainly theories of what unions were and did rather than theories of what unions will be and will do. Thus, the purpose of this book is to help make economic thinking about unions in Europe more forward-looking and to discuss the role that unions are likely to play in the changed economic environment of the new century. The volume consists of two reports that are the results of coordinated efforts by some of the most authoritative scholars in the field. The first study addresses a number of issues related to the question of how the primary role of trade unions—collective bargaining over wages and work conditions—is likely to evolve in the early decades of the new millennium. Starting from the widespread impression of a trend toward weakening union power, the main aspects considered by the analysis are membership, wage effects, organization and presence of unions, bargaining structure, macroeconomic performance, future scenarios, and strategies. The second study investigates the interactions between trade unions, welfare systems, and welfare reforms. The overall theme is the policy dilemma created by the many different activities of trade unions in the field of welfare provision, notably pension policies and unemployment protection.Throughout the analysis, a tension emerges between the role of unions as voice of atomistic agents and insurance providers—that may contribute to increasing aggregate welfare by remedying market failures—and as rent-seeking monopolist, underlying the intergenerational conflicts present within unions. The studies point to measures and strategies enhancing this second efficient role of the unions that draws mainly on their capacity to internalize to the employer–employee relationships costs that would otherwise fall on society at large.
1. Introduction
In this part of the volume, the overall theme is the policy dilemma created by the many different activities of trade union in the field of welfare provision, notably pension policies and unemployment protection. Throughout the following chapters, a tension emerges between the role of unions as insurance providers, as institutions that facilitate agreements between different parties, and as rent-seeking monopolists. By making use of an interdisciplinary approach, the analysis rationalizes a set of distinct features of the interaction between union activities and union structure on the one hand and welfare arrangements and welfare developments on the other.
2. Unions' Involvement in the Welfare State
Shows that there are important correlations between the unions' strength and activities and their welfare outcomes. The chapter provides a taxonomy of the large differences across countries in unions' strength and social expenditure. The analysis distinguishes among four dimensions of union influence: (1) unions as political movements; (2) unions and self-administration in public schemes; (3) unions and private pensions; and (4) institutional participation and political veto points.
3. Unions and Pensions: Theory, Evidence, and Implications
The relationship between union actions and welfare outcomes is developed, taking the provision of old-age insurance as a natural example. This chapter develops the economic theory of how unions go about setting policies on pensions; it presents empirical evidence of their impact on occupational pensions and policies on state pensions and early retirement options; and it examines how union activities depend on labour relations institutions.
4. Learning from Welfare Reforms: The Case of Public Pensions
Provides a detailed account of the position of unions on pension reforms across Europe. This example is regarded as a major indicator establishing whether unions have a truly solidaristic approach in negotiating reforms or appear to be driven mainly by internal membership considerations and by a strong seniority bias.
5. Unions and Unemployment Insurance
Differences in unionization rates across countries appear to be related to how unemployment insurance is organized in different countries. The chapter presents the involvement of unions in the provision of unemployment insurance, highlighting theoretical considerations, policy arguments, and empirical evidence in favour of a particular unemployment insurance arrangement known as the ‘Ghent regime’.
6. Conclusions
Summarizes the main findings of this part of the report, stressing how the seniority bias in unions leads to economic outcomes that are more favourable to older workers. It analyses the ways in which unions can counteract this tendency and choose policies that benefit both young and older workers. Four final questions arise: (1) Do unions interact with the welfare state? How do they do it? (2) What explains union policies toward welfare outcomes? (3) Which institutional structure emphasizes unions' welfare-enhancing activities relative to unions' rent-seeking activities? (4) Can unions contribute to a reform of welfare systems?
