ABSTRACT
American unionism is distinctive, and it is hazardous to draw inferences about unionism in other countries informed solely from knowledge of unionism in the United States. Looking back from the year 2003, this chapter shows that the US experience provided something of a portent and the decline in private sector unionism in the US has been replicated in a number of high-income economies. The position that developed countries have occupied on this trade-off between changes in unemployment and changes in earnings inequality is intimately related to unionism. Elementary price theory suggests that competitive product market environments offer a less hospitable environment for the wage-making activities of unions than oligopolistic or state-protected markets. Competitive firms paying higher union-negotiated wages must find cost savings elsewhere to avoid declines in their market share. These pressures operate less vigorously when firms are product market monopolies or oligopolies or when entire industries pay union-negotiated wages or when the state protects the organization.
