Labor union density in the G7 countries and OECD from 1960 to 2020

Labor unions, also known as trade unions, reached their peak in the advanced industrial countries of the G7 and Organization for Economic Cooperation & Development (OECD) in the late twentieth century; since the 1980s however, their memberships have declined drastically, in some countries by as much as 50 percent. The labor movement arose in the nineteenth century to represent workers' interests in collective bargaining and to protests against poor wages and work conditions. From their peak in the twentieth century, unions have declined to represent much smaller numbers of workers today, in many countries being active mainly among public sector workers, such as in the United States.

The rise and fall of union power

In their rise during the twentieth century, labor unions were tightly connected to political parties of social democratic or socialist bent, while also being connected with Christian democrats in some continental European countries. As these parties came to power in the post-WWII period, unions were institutionalized into a system of social partnership with employers and the government in many countries. This agreement minimized labor disputes, while focusing on increasing productivity, which led to a period of unprecedented economic growth. As this system ran up against intractable economic problems in the 1970s, however, parties came to power who pursued a 'neoliberal' agenda of liberalization of the labor market and the privatization of nationalized companies. Since the late 1970s, these policies have caused union membership to decline drastically, as unions could engage in the same level of collective bargaining in a more interconnected and globalized international economy.