EurWORK European Observatory of Working Life

Union density falls

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Country: 
Finland
Author: 
Reija Lilja

According to a study published in February 2003, the total number of members of Finnish trade unions increased by 18,000 over 1994-2001, but the number of potential members rose considerably more, by 161,000, leading to a fall in union density of 7.3 percentage points (from 78.5% to 71.2%). The fall in density was more marked among men than among women. The reasons behind this decline in union density include factors related to the business cycle and changes in the structure of the labour force.

A recent study carried out by the Ministry of Labour, which was published at the beginning of February 2003, shows that the number of trade union members in Finland increased by 18,000 over the period 1994 to 2001, to stand at 2.08 million. As many as 21.5% of union members are not wage-earners or unemployed but belong to 'special groups' such as students, pensioners or the self-employed. The number of union members in the labour force (ie wage-earners or unemployed) was 1.64 million in 2001. Between 1994 and 2001 the number of potential members - ie people who are either wage-earners or unemployed - increased by 161,000. This means that the organised labour force as a proportion of the potential membership (ie union density) fell 7.3 percentage points from 78.5% to 71.2%. The fall in density was more marked among men than among women. Among men, union density fell by 10 percentage points, compared with a fall of 4 points among women. In 2001, union density among men was 66.8% and among women 75.6%.

The study is based on a survey that was addressed in May 2002 to 81 trade unions that are members of central trade union organisations - ie the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) or the Confederation of Unions for Academic Professionals in Finland (AKAVA). As many as 89% of trade unions replied, covering 99.2% of the unions' total membership. Similar surveys were conducted in 1989 and 1994.

Measuring union density

Trade union density has been measured in different studies in Finland. The Ministry of Labour study is, however, the only comprehensive survey on trade union membership in Finland. The working life barometer (also carried out by the Ministry of Labour) and the labour force survey (carried out by the Statistics Finland), which also measure union density, are based on samples of wage-earners and the labour force respectively. In 2001, according to the working life barometer the proportion of organised employees was 83%, and according to the labour force survey union density was 65.6%. Thus, the union density reported in the Ministry of Labour study falls in the middle of these two extremes. If the 'special groups' mentioned above had not been deducted from the total membership, union density would have been as high as 90.6% in 2001. Unions themselves put union density on average at between 80%-83% in 2001.

Reasons for decline

Trade union members of active working age normally pay membership fees to unions’ unemployment funds. One of the prerequisites for receiving earnings-related unemployment insurance on becoming unemployed is membership of an unemployment fund for a specified period (eight months). It is possible to be a member of the unemployment fund without being a member of a trade union. Over the period 1994 to 2001, the unemployment fund which does not require union membership (Yksityisalojen työttömyyskassa, YTK) more than trebled its number of members (from 48,000 to 180,000). This has contributed to the reduction in union density. According to unemployment fund statistics, the organisation rate of the funds was 83.8% when members of YTK were included and 74.7% without YTK members.

Union density in Finland tends to follow business cycles - it is higher in economic downturns and lower in upturns. In 1994, the Finnish economy experienced deep recession, and one of the reasons behind the drop in union density in the period to 2001 is the long period of economic growth since 1994. In fact, union density in 2001 was very close to that (71.9%) measured in 1989, which was a year of strong economic growth in Finland. According to the labour force survey, union density among unemployed people has dropped more than that among the employed. Over the period 1995 to 2001, union density fell by 12.4 percentage points among the unemployed (from 51.8% to 39.4%), and 9.6 percentage points among the employed (from 78.6% to 69.0%).

In 2001, union density was highest, at 86.6%, in the public sector, where 70% of employees are women. In male-dominated industry, union density was 83.8%. The lowest density rate (55.3%) was in private services. Since the mid-1990s, employment has grown in private services almost three times faster than in the economy as a whole. The low union density in this sector, combined with its fast employment growth, has contributed to the observed drop in the overall union density since 1994. Women’s higher density rate compared with that of men is largely explained by the fact that in the public sector, in which 40% of women and only 15% of men work, the union density rate has remained at high levels.

Young people have a lower propensity to be union members than older people. According to the labour force survey, in 1995 union density was 53.5% among those under 30 years of age, and in 2001 it had dropped to 40.3%. Union density is highest in the 50-59 age group, at 81.8% in 1995 and 78.6% in 2001. When labour market entrants are less unionised than those who exit from the labour market, it will, in the long run, lead to a drop in union density. This effect has become stronger, since the gap between union density among young and older people has increased substantially over time.

Another contributory factor to the drop in union density can be found in the increase of 'atypical' forms of employment. Over the period 1995 to 2001, the number of part-time workers increased by 58,000. During the same period, the union density of part-time workers fell from 58.7% to 49.1%, which according to the labour force survey are markedly lower figures than for wage-earners in general (78.6% and 69.0%, respectively).

Commentary

There is no unique measure of union density in Finland, and different measures give a somewhat different picture of the level of density. All measures, however, suggest that union density has declined since the mid-1990s. There are many contributing factors to this, which are related to business cycle effects as well as to changes in the structure of the labour force. Young people in new, growing industries are less likely to be union members. Trade unions are actively responding to the challenges that the changes in the economic environment have thrown up. For example, more young students are now involved in trade unions than before, the number of student members having risen by 30,000 (to 128,000) between 1994 and 2001, accounting for 6.1% of the total membership. (Reija Lilja, Labour Institute for Economic Research)