Trade Unions in the European Union

From the ‘golden age’ to …

Underpinning trade union progress in Western Europe during the ‘golden age’ was economic growth. Although this growth was cyclical, it was characterized by relatively long upswings and relatively short downswings (Crafts and Toniolo 1996a). Multinational companies (MNCs) were drivers of economic growth, basing their activities on ‘fordist’ mass production of goods, which were primarily intended for sale in national markets. Within MNCs ‘affluent workers’ were able to secure higher wages and enhanced job security in return for their cooperation at work, required by management to meet the demand arising from rising living standards (Goldthorpe et al. 1969). While rarely formally agreed or made explicit, wage growth became associated with a trade-off involving inflation and productivity growth (Marglin and Schor 1990). The increasing coverage of collective bargaining facilitated such trade-offs within all companies. This ‘virtuous circle’ powered high rates of economic growth until the late 1960s when rates of growth slowed and then subsequently dived as the impact of the oil crisis hit home and stagflation resulted (Eichengreen 2007: 198–251) coupled to a resurgence of industrial conflict (Crouch and Pizzorno 1978).

Accompanying the high rates of economic growth during the ‘golden age’ was the broadening of the role of the state informed by Keynesian policies (Howell 2005: 86–130). The welfare state was extended in scope and depth (Esping-Andersen 1990), and, at least, rhetorical commitments were made to securing full employment by parties of the political left and right. Trade unions participated in decisions made by the state at the centre and within the localities, particularly, but not exclusively, when left-of-centre parties were in power. Corporatist or tripartite arrangements afforded trade unions influence within national policy making, which promoted alliances between unions and political parties. Many unionists, for example, sought election to public office as representatives of the political party with which the unions were in alliance. Under pressure predominantly from unions, the state broadened industrial citizenship in the form of board-level employee representation, works councils, health and safety committees and other forms of workplace representation. This was particularly the case in the public sector where the state acted as a ‘model employer’ to promote similar developments in the private sector.

Trade unions benefitted from these developments. From a principally male, full-time, manual and manufacturing core membership unions extended organization to include some white-collar and women members. With the exception of the countries with variants of the Ghent system, where unions were involved in the administration of unemployment insurance, large segments of private sector services remained unorganized. Retail, hospitality, catering and tourism, for example, were low union density segments of most economies. Burgeoning membership allowed unions to finance and offer a wider range of services to members encompassing research, legal and training departments. Similarly, full-time officers and lay representatives⁴ with extensive time-off provisions ‘serviced’ the growing membership by means of increasingly formalized grievance and disciplinary procedures.

Although pleas to internationalize became louder towards the close of the ‘golden age’ (Levinson 1972), trade unions remained national in orientation. Engagement with the nation state afforded the only opportunities to secure improvements in welfare provisions and legislation on union security. Similarly, collective bargaining arrangements were reliant on national industrial settlements, thus accentuating the national focus of unionists. The linkage between wages, inflation and productivity growth that informed collective bargaining was also based on national data and comparisons. Although some MNCs engaged in company bargaining, most were signatories to national industrial agreements and none introduced transnational settlements for the entire MNC. While the establishment of the European Trade Union Confederation (ETUC) in 1973 constituted a step towards greater European trade union internationalization, the initial limited affiliation and the rudimentary structures were indicators of the limits to trade union internationalization, (Degryse and Tilly 2013; Dølvik 1999).

The potential for rapid economic growth in CEE after 1945 was present in the form of catch-up effects as largely agricultural economies industrialized and, as in the West, made good the damage wrought by the Second World War (Eichengreen 2007: 131–162). This potential of ‘input capitalism’ was not realized. The central planning system in which all major industries were owned by the state resulted in the rapid creation and expansion of the industrial base, but economic growth became dependent upon ever-greater inputs of labour and capital from about 1960 (Aldcroft and Morewood 1995). The subsequent failure to invest in modern machinery, labour shortages and poor management practices further impaired economic growth (Berend 1996).

In this context, the situation of trade unions in CEE differed markedly from their counterparts in the West. As close, yet subservient, allies of the various national Communist Parties, unions became integral to the system of exhortation directed towards productivity growth. In the absence of rising living standards, marked limits to consumption, underinvestment in housing and communications, and poor power provisions (Eichengreen 2007: 140; Mazower 2000: 253–289), unions were associated with the failures of central planning rather than institutions concerned to raise the living standards of members. Instead, trade unions in CEE emphasized a social role. The provision of convalescent homes, facilities at holiday resorts and extensive child-care arrangements exemplified the social aspect of union practice. These provisions coupled to advantages to members through trade union links to the Communist Party ensured high levels of union density. In 1970, for example, union density was estimated at 80.0 per cent or higher in each of the CEE countries where Communist Parties were in power.⁵ Trade union density was thus markedly higher in CEE than in Western Europe.

Throughout most of CEE trade unions at the workplace were concerned to meet productivity, output and other targets required within the terms of central planning. Union involvement was thus an element of workplace management. It should be noted, however, that training provisions were extensive with the consequence that significant proportions of the workforce were relatively highly skilled in some countries, notably Czechoslovakia and Hungary. The exception to the managerial function performed by unions in CEE was Yugoslavia where a system of self-management was implemented with each self-managed enterprise managed by an elected works council. Yugoslav self-management led to a degree of democratic rather than bureaucratic planning and the emergence of market relationships between self-managed enterprises (Moore 1970; Singleton and Topham 1963). Initially self-management was independent of Yugoslav unions, which occupied a similar position to their counterparts elsewhere in CEE, but after about 1970 Yugoslav trade unions supported unofficial strikes called against incomes policies implemented to curb inflation (Coates and Topham 1972: 244).⁶

In summary, the ‘golden age’ was a phenomenon of Western Europe that enabled trade unions to consolidate economic and political positions that hitherto they had not achieved. Within CEE the position of unions was also consolidated in a subservient relation to the Communist Party. The contrast between trade unionism in Western Europe and CEE was thus marked. Furthermore, these differences were accentuated when the Soviet bloc disintegrated and the system within which trade unions were consolidated was replaced.

… the neoliberal challenge

The neoliberal policy agenda impacted all Member States, albeit to different degrees dependent inter alia upon the resilience of trade union organization, the degree of union embeddedness in labour market and welfare institutions, and the intensity of the adopted neoliberal programme. At the core of the neoliberal agenda was the rejection of Keynesian assumptions, including the rejection of full employment as a desired political target and the prioritization of the control of inflation (Baccaro and Howell 2017). Post-1980 levels of unemployment have thus been consistently higher than those recorded during most of the ‘golden age’ with a subsequent weakening of the bargaining position of trade unions (see Table A1.J).⁷ In pursuit of reduced inflation governments sought increases in labour market ‘flexibility’. In this context trade unions and collective bargaining were viewed as labour market rigidities, which were to be reduced in effect. Accompanying attempts to reduce the coverage of collective bargaining were initiatives to promote the decentralization of collective bargaining, which were generally supported by employers. In CEE where unions and collective bargaining were at a different level of development compared to Western Europe, measures were taken to limit their development with adverse consequences for union density, which plummeted immediately after the transformation, and the coverage of collective bargaining, which remained sparse. Only in Romania and Slovenia were industrial bargaining arrangements established and these were short-lived in Romania (Trif and Paolucci 2019). Elsewhere in CEE where collective bargaining was established it tended to operate at company level.

Employers lobbied hard for these political changes and took advantage of the political opportunity to introduce a range of policies that further inhibit union organization, particularly in the form of human resource management (HRM) practices designed to enable managers to speak directly with workers rather than through their union workplace representative or works councillor, and so-called flexible working based on neoliberal legislation that limits job security. Although the extent to which Fordist production will disappear is debated (Coriat 1995; Hirst and Zeitlin 1991), it is clear that other production regimes, incorporating flexible specialization, are becoming embedded, again requiring a shift in union organization (Boyer and Drache 1996; Iversen and Soskice 2019: 136–215).

A further objective of the neoliberal programme is a reduction in the size and the role of the state. Privatization of industries and services owned by the state was commonplace in Western Europe after 1980, together with the introduction of mechanisms intended to promote internal markets within the remaining public sector. In CEE the extent of privatization was more wide-ranging, an impact compounded by the high rates of foreign direct investment from Western European- and United States (US)-owned MNCs (Bohle and Greskovits 2012: 262–267). In practice, throughout much of Europe public sector employment contracted as a proportion of the labour force, thereby shifting employment from economic segments of union strength to segments of relative union weakness.

Regarding the role of the state the neoliberal intention was to ‘distance’ the state from trade union engagement. In Western Europe many tripartite and corporatist institutions were dismantled or downgraded in influence, thus limiting union involvement in policy formulation (Baccaro and Howell 2017). In CEE tripartite institutions were established ostensibly to generate political support for the transformation to market economies, to settle minimum wages, to manage welfare provisions and to establish systems of industrial relations. Many of these tripartite institutions, however, were shown to be illusory, a means to generate neoliberal outcomes and a contraction of the welfare state, and a mechanism to ensure that labour recognized the weakness of its position (Bohle et al. 2007; Ost 2000).