Trade Unions and Social Democratic Parties Yesterday and Today Lucio Baccaro MIT European Social Democracy: Roots and Prospects March 2008 Hotel De la Minerve, Rome

Data On unions, collective bargaining coverage and structure, social concertation, and social democratic strength Time frame: 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 (34.91)* (43.16)* (34.85)* (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 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: WelfareSocial Pacting: WagesSocial Pacting: Welfare (3.97***)(3.4***)(3.35***)(3.26***) (2.57**)(1.07)(2.76***)(2.48**) (4.35***)(4.51***)(3.6***)(3.94***) (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 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)