Are Europe's unions doomed?

2005

Can Europe hold out as the last bastion of unionisation in the rich world?

According to an excellent piece in today's International Herald Tribune, the percentage of unionised workers has declined in nearly every European country in recent years, suggesting that Europe may follow in the path of the United States, Japan, South Korea and Australia, where unionisation has steadily declined over the past decade reaching, in some cases, near irrelevance.

Union officials in Europe wonder out loud about their future, given competition from Eastern Europe, where the labor movement is weak, partly because bitter memories remain of mandatory union membership during communist times. There is also the ever-present specter of manufacturing jobs moving to Asia

But even as many German and French union diehards refuse to accept the idea that manufacturing jobs will continue to move eastward, employers are voting with their feet and shifting production to the new EU member states whose labour markets follow are far less rigid model.

Companies that move to Eastern Europe cite this flexibility as one of the key attractions. Jean-Louis Suzan, a French executive who recently helped oversee a project to move an electronics distribution center from Belgium to Hungary, said one of the main reasons for the transfer was flexibility.

"Over there it looks really easy," he said, referring to Hungary. "There is no constraint on how quickly you can deploy resources. People can work overtime. And if there is not enough overtime, it is easy to get more people."

He contrasted the Hungarian situation to that of France, where before any major reshuffling of personnel, "you need to inform the unions and the Ministry of Labor," he said.

International Herald Tribune | Power ebbs at Europe's unions