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Do unions redistribute income from capital to labour? Union density and wage shares since 1960

Erik Bengtsson

Industrial Relations Journal, 2014, vol. 45, issue 5, 389-408

Abstract: The income distribution between capital and labour is understudied within industrial relations. This article investigates the relationship between union density, taken as an indicator of the bargaining power of unions, and the wage share of national income in 16 advanced capitalist economies since 1960. It is shown that overall there is a positive relationship between union density and the wage share, as one would expect. But the relationship is weak or non-existent in the Nordic countries, and in some specifications in Germany and Anglo-Saxon countries, and overall it is weak in the 1980s and early 1990s. The article discusses the differences between countries in relationship to the literature on corporatism and wage moderation, and the decreasing effect over time with reference to increased global competition and conservatism of monetary policy from about 1980 on, increasing unions' incentives for wage moderation policies.

Date: 2014
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Handle: RePEc:bla:indrel:v:45:y:2014:i:5:p:389-408