Wage inequality, collective bargaining coverage and trade union density

Abstract

Up till now developments in industrial relations and collective bargaining have only modestly been represented in the debates on inequality that have recently risen under the impetus of Thomas Piketty’s Capital in the 21st century. In these debates, growing income inequality has in particular been linked with the growing market power of multinational enterprises and the rise of private equity, with excessive rewards for corporate managers aligning with empowered shareholders, as well as with the ‘financialisation’ of the world economy. As an explaining factor, the near-global weakening of labour’s bargaining power mostly ranks lower. Yet, nearly all students of industrial relations come to about the same conclusion: in the majority of western countries the position of the trade union movement has been weakened and trade union membership rates have fallen, and often collective bargaining coverage is under pressure as well. However, internationally comparable data seems lacking that indicate how the latter trends work out for the various layers of wage-earners.