Comparing Labor Relations: How Models of Unionization Differ Between the US and Europe

Throughout the past century, there has been a steady decline in US unionization rates. As of 2023, the union membership rate was 10.0 percent—half of what it was in 1983 and nearly three times less than what it was in 1954.[1] So what happened to unions? Are they a thing of the past? This short blog will analyze current US labor relations and how it compares to labor relations in Europe.

The model of unionizing in America is known as “enterprise-level” bargaining. This system involves individual companies and workplaces choosing whether to unionize and negotiating for their own collective agreements. At its face, it seems like a good system. Unionized workers in the US enjoy higher wages and better benefits than non-union workers.[2] However, a problem with this model is that it creates an adversarial relationship between unions and employers with perverse incentives for employers to oppose workers joining a union. This strong corporate resistance to unions has contributed to a rise in union-busting/anti-union tactics, which in turn has made unionizing very difficult.[3] Perhaps the biggest reason for the decline of unions is the fact that unionized companies in the US have slower growth than their non-unionized counterparts.[4] Investors are less willing to put money into firms where unions threaten to increase labor costs, and these firms respond by hiring fewer workers.  

Despite the decline of unions in the US, unions in other parts of the world have flourished. The EU averages around 23% union membership rates, including Nordic countries boasting 70% membership rates.[5] Perhaps most impressively, European countries have developed a model of unionization in which both employers and workers thrive. There, unions bargain not at the company level but at the sector level. In other words, they negotiate on behalf of all workers in an entire industry rather than just one company. In France, for example, an employers’ federation representing restaurants will negotiate with a union representing restaurant workers.[6] They reach a deal, and then the government “extends” the deal to cover all restaurants and all restaurant workers.[7]

Europe’s “sector-level” model of bargaining has several profound impacts. First, employers who are unionized are not put at a disadvantage compared to their non-unionized competitors and thus have less incentive to discourage union membership. Every employer in the sector is paying the same wages and offering the same benefits. This reduces anti-union sentiment and “union-busting” activity. Second, it leads to more satisfaction among workers.[8] Everyone in the sector enjoys the same pay and benefits, which further reduces feelings of injustice and discontent. This encourages employer-union collaboration and actually leads to higher employee satisfaction and productivity, promoting business growth and making it a “win-win” for both employers and employees. Lastly, sectoral bargaining is particularly effective at closing pay gaps.[9] Not only does sectoral bargaining reduce economic inequality in society, but pay differences between genders and between white workers and workers of other races tend to be smaller where there is sectoral bargaining.[10]  

While adopting a model of unionization similar to Europe will undoubtedly have significant benefits, completely reforming the current US model of unionization would be very difficult. Instead, I propose a combination of the two. In a combination system, enterprise-level bargaining would continue to be available, but all workers would at least be covered through sectoral bargaining. This would create a floor to ensure all workers in an industry enjoyed broad benefits while also allowing flexibility (through enterprise-level bargaining) to address workplace-specific issues.[11] As our world continues to evolve with hybrid/remote positions and the rise of the gig economy, adding sectoral bargaining to the US model of unionization will allow for the broadest coverage of workers and lead to win-win-win solutions for employers, employees, and our society as a whole.

Milo Young is a staff member of Fordham International Law Journal Volume XLVIII.

[1] U.S. Bureau of Lab. Stat., Union Members 2023 (Jan. 23, 2024), https://www.bls.gov/news.release/pdf/union2.pdf; See also Brian I. Baker, The Monthly Labor Review at 100 – Part II: The “Middle Years,” 1930-80, Monthly Lab. Rev.: U.S. Bureau of Lab. Stat. (May 2016), https://doi.org/10.21916/mlr.2016.22.

[2] Jeff Goldstein, How the U.S. Compares to the World on Unionization, Atlantic Council (Oct. 28, 2022), https://www.atlanticcouncil.org/blogs/econographics/how-the-us-compares-to-the-world-on-unionization/. 

[3] Dylan Matthews, Europe Could Have the Secret to Saving America’s Unions, Vox (Apr. 17, 2017), https://www.vox.com/policy-and-politics/2017/4/17/15290674/union-labor-movement-europe-bargaining-fight-15-ghent. 

[4] Id.

[5] Ethan Dazelle, A Closer Look: Labor-Management Cooperation in Europe, U.S. Dep’t of Lab. Blog (May 2, 2024), https://blog.dol.gov/2024/05/02/a-closer-look-labor-management-cooperation-in-europe.

[6] Matthews, supra note 3.

[7] Id.

[8] David Madland, How to Promote Sectoral Bargaining in the United States, Ctr. for American Progress Action Fund (July 2019), https://www.americanprogressaction.org/wp-content/uploads/sites/3/2019/07/How-to-Get-Sectoral.pdf.

[9] Id. at 5.

[10] Id.

[11] Id. at 4.

This is a student blog post and in no way represents the views of the Fordham International Law Journal.