Unions in a nosedive: the OECD reports a historic collapse. What about wages?

On the day of the general strike for Gaza, new data on trade unions in the industrialized world and their drastically downward trend are being published. A new OECD report , based on data from the ICTWSS database updated to 2024, highlights an unmistakable trend: the hemorrhage of union members . In less than forty years, average union density in the countries of the region has literally halved, from 30% in 1985 to a modest 15% today .

A collapse that is not an opinion, but a fact that has profound implications for collective bargaining and, ultimately, on workers' purchasing power.

The numbers of a general decline

The decline is widespread, almost universal, albeit at varying speeds. While in 1985, one in three workers was a union member, today only one in seven is. Of course, the averages mask very different realities:

• Countries with high unionization : In countries such as Iceland (90%), Sweden and Denmark (over 60%), union representation remains a cornerstone of the social model.
• Countries with low unionization : At the other extreme we find Colombia (4.7%), Estonia (5.6%) and Hungary (7.4%), where the role of the union appears almost marginal.

Even the so-called “Ghent System” (typical of Nordic countries, where unions manage part of unemployment benefits) is showing signs of erosion, challenged by competition from private insurance funds.

Some may have noticed a slight rebound during the COVID-19 pandemic. An optical illusion, explains the OECD. The temporary increase was not the result of a renewed confidence in representation, but rather a mere "composition effect": more jobs were lost among non-unionized workers, thus distorting the statistics.

The profile of a unionized worker: public and little else

But who remains a union member today? Demographic data paints an interesting picture. Contrary to what one might think, gender differences are minimal: 14.2% of female workers are union members, compared to 14.9% of their male colleagues.

The real divide, almost a tectonic fault, is between the public and private sectors:

• Public Sector : Union membership stands at a robust 41.3%.
• Private Sector : The percentage drops to a paltry 10.1%.

The union, therefore, seems to have become a stronghold mainly of the public sector, progressively losing ground in the beating heart of the market economy.

On the other side of the fence: businesses hold firm

While unions may be crying, employers' associations aren't laughing, but they certainly aren't despairing. Their capacity for representation has proven much more stable. The share of private sector employees working for companies affiliated with an employers' organization has fallen only slightly, from 59% in the 1980s to around 55% today.

This stability is particularly strong in countries like Austria, where membership is mandatory, or the Netherlands and Sweden, where sectoral bargaining is the norm. A clear signal: capital maintains a solid and cohesive representation structure, while labor appears increasingly fragmented.

The real consequence: less collective bargaining

The decline in union density isn't just a matter of membership. The most direct and tangible consequence is the erosion of collective bargaining coverage . The share of workers whose wages and conditions are regulated by a collective agreement has fallen from 47% in 1985 to 33.6% in 2024.

This means that one in three workers today no longer benefits from collectively negotiated protections. The decline has been particularly drastic in countries like the United Kingdom or New Zealand in the 1980s and 1990s, or more recently Greece, which have implemented far-reaching labor market liberalization reforms.

Moreover, in many countries, such as Italy, it seems that unions have become merely generic political and para-party organizations, forgetting their institutional purpose of defending workers. This is gradually leading to a loss of identity for the movement, and these data are the clearest indicator. Unions are becoming irrelevant, but they don't seem to realize it.

Questions and Answers for Readers

1) Why are unions losing so many members? The causes are complex and interconnected. They include the structural transformation of the economy, with the shift from large manufacturing plants (the union's historic base) to a more fragmented service sector with atypical contracts. Added to this are legislative changes in many countries that have weakened union power, globalization that has increased competition, and, for some, a perceived inability of unions themselves to meet the needs of new workers, such as young people and freelancers.

2) If unions are stronger in the public sector, does this mean that public employees are better protected than private sector employees? On paper, yes. High union density (41.3% versus 10.1%) and almost complete collective bargaining coverage offer the public sector a generally more stable and defined framework of wage and regulatory protections. In the private sector, lower unionization and reduced bargaining coverage mean that a greater share of workers must rely on individual bargaining or the minimum protections provided by law, potentially resulting in greater variability and precariousness in working conditions and pay.

3) Does a decline in collective bargaining automatically mean lower wages? It's not automatic, but the correlation is strong. Collective bargaining tends to establish wage and regulatory "floors" that protect workers, especially those with less individual bargaining power. Its erosion leaves more room for individual negotiation, where power is often skewed in favor of the employer. This can lead to greater wage inequality and downward pressure on wages, especially for middle- and lower-income groups, weakening aggregate demand, as Keynesian analysis suggests.

The article "Unions in a nosedive: OECD photographs a historic collapse. What about wages?" comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/sindacati-in-picchiata-locse-fotografa-un-crollo-storico-e-i-salari/ on Fri, 03 Oct 2025 08:00:18 +0000.