Collective bargaining under pressure as union membership plummets

Never before have so many Danes chosen a working life without being member of an unemployment insurance fund and a trade union. It is a trend which could spell the beginning of the end of Denmark’s collective bargaining model which has been around for more than a century.

A new comprehensive analysis from the Employment Relations Research Centre (FAOS) at the University of Copenhagen shows four in ten Danish workers are now not members of trade unions which take part in collective bargaining. The analysis, commissioned by the Danish Confederation of Trade Unions, shows only half of Denmark’s workers - 54 percent - choose to be members of a trade union and an unemployment insurance fund. 

One million Danes are not organised or else they’re members of so-called ‘yellow’ unions, which do not take part in collective bargaining. It is young men in the private sector in particular who turn their backs on traditional trade unions and who don’t pay into an unemployment insurance fund.  

Threat of new legislation

This trend could mean a far stricter political control of labour market policies, say the report’s authors, FAFO researchers Jesper Due and Jørgen Steen Madsen. Today the social partners negotiate agreements amongst themselves to a large extent, and the so-called flexicurity model can, according to most experts, be thanked for the flexibility in the Danish labour market, and for the high economic safety among workers. But the model comes under pressure when fewer join unions and the social partners no longer can guarantee that agreements they reach are for the common good of most workers. Then politicians might have to intervene and pass legislation to regulate the labour market.

The authors are both professors and labour market researchers, and their analysis is based on their joint thesis “LO and the future of the Danish model. Considering the challenges and society’s conditions for LO’s development”. It was commissioned by LO ahead of the debate about LO’s future during the confederation’s latest congress.  

In the very short term though, it does not look like LO and the social partners are loosing their influence despite the drop in union membership. LO is expected to play a considerable part in both negotiations and on a political level. LO and the Confederation of Danish Employers (DA) will still play central, coordinated roles during the coming negotiations at the start of 2012, and the new Social Democrat-led Danish government has said three-party negotiations between LO, DA and the state will help realise the new government’s economic policy by increasing the labour supply and create an economic framework for an educational lift.

A cheaper and better confederation

This could result in a major competence reform with more adult and further education, but negotiations could also result in a far more limited agreement.

“So in the coming years LO does not seem to be faced with many problems when it comes to negotiations and political influence. But in a longer perspective we see difficulties piling up,” concludes Jesper Due and Jørgen Steen Madsen.

Three other Danish labour market experts come to the same sombre conclusion in a different book. In ‘Collective action - union organisation and cross-union movement’ researchers Flemming Ibsen, Laust Høgedahl and Steen Scheuer look at why Danish workers are moving from unions with negotiating rights to alternative organisations or abandoning unions altogether, and they would like to see unions develop strategies to change this development. 

Often the workers’ reasons are based on economy or values, and these reasons must be taken into consideration when unions look to keep existing members and recruiting new ones, say the authors. The unions could become leaner and even more efficient, there will be more mergers and memberships could become cheaper.