Financialization and the Decline of Organized Labor: A Study of 18 Advanced Capitalist Countries, 1970-2012

Abstract

Is financialization contributing to the slow decline of union density that is occurring across most advanced capitalist countries? Combining insights from literatures on financialization, corporate governance, and comparative political economy, we argue that the growing dominance of finance within advanced capitalism weakens unions through several channels, and plays an important but underappreciated role in the deunionization of national workforces. Using data from 18 advanced capitalist countries over several decades, this assertion is tested against the literature's existing explanations for declining union density. Results from panel regression models suggest that financialization is an important cause of union decline, but that its particular effects vary between different types of advanced capitalism. The study concludes by arguing that financialization creates new interconnections between firms and finance capital, resulting in business practices that ultimately put downward pressure on union densities across advanced capitalist countries.