Anders Kjellberg provides an excellent summary of changes in trade union density in the Nordic countries over the past few decades. His article will be useful for policymakers and other stakeholders.
The Nordic countries stand out globally for their high levels of unionisation. Historically, the Ghent system has played a crucial role in supporting high union density rates in Denmark, Finland, and Sweden, as the Ghent system de facto ties earnings-related unemployment insurance to union membership. Cross-sectional macroeconomic research has consistently shown a strong correlation between the Ghent system and higher union density (Neumann et al., 1991). However, declines in union membership have been significant in Denmark, Finland and Sweden since the early 1990s. Union density has remained relatively low but stable in Norway, which does not have a Ghent system. In Iceland, on the other hand, union density has increased slightly due to compulsory union dues for all employees. These contrasting trends across the Nordic countries highlight the importance of institutional factors in maintaining levels of union membership.
Several factors have contributed to the decline in union density in the Nordic countries. First, structural shifts in the labour market have had a negative impact, for example, the growth of private service industries and the decline of traditional manufacturing jobs. Service sectors tend to have lower rates of unionisation, particularly among blue-collar workers in low-paid jobs.
Second, political reforms, particularly in Sweden, have eroded union density. Policy changes, such as higher fees for unemployment funds, have discouraged union membership. However, white-collar unions in Sweden have been more successful in maintaining membership by offering supplementary income insurance, which has become a key recruitment tool.
Third, macroeconomic conditions are often overlooked yet potentially significant. In countries with a Ghent system, union density has historically risen considerably during macroeconomic downturns as workers sign up for the earnings-related unemployment benefits offered by union-run unemployment funds. However, the rise of independent unemployment funds, such as the YTK in Finland, has significantly weakened the link between unemployment risk and union membership.
The future holds multiple challenges for trade unions in the Nordic countries. In my view, the single most significant determinant is the age cohort effect, as younger generations are much less likely to join unions than older ones (Böckerman and Uusitalo, 2006). As these younger, less unionised cohorts gradually replace older workers, union density is expected to fall further. Social norms about unionisation are also changing, with lower union density establishing itself as a new equilibrium that is very difficult to reverse. The rise of remote work, particularly in white-collar sectors, may further weaken traditional workplace norms that have historically supported high levels of unionisation.
The further erosion of the Ghent system will pose a significant challenge in the future. Independent unemployment funds in Finland and low-cost “yellow” unions in Denmark undermine traditional union structures. In addition, the growing disparity between sectors complicates efforts to unionise. While white-collar workers in certain industries maintain higher union density, blue-collar workers, particularly in low-paid jobs, are much less likely to be in a union.
Non-standard forms of work, such as the increasing importance of gig work, also contribute to the decline in union membership. Workers in these jobs are often excluded from post-war union structures and do not share the traditional social norms, further reducing overall union density. Migrant workers, often overrepresented in non-unionised sectors such as retail trade, hotels, and restaurants, pose another challenge for unions. Lower union density among migrant workers further exacerbates the overall decline in membership. In addition, resistance by employers, particularly in new industries and multinational corporations, may present a significant barrier to efforts to unionise. For example, Tesla’s opposition to unionisation in Sweden is indicative of the challenges faced by unions in organising workers in certain industries.
To address these challenges, trade unions must strengthen workplace representation and increase recruitment efforts, especially among young and migrant workers. In my view, the key challenge for unions is the ageing of their membership base, as the median age of union members continues to rise due to the age cohort effect. This demographic shift may lead to unions increasingly becoming organisations for the ageing population, further reducing their appeal to younger workers. Unions must remain relevant to younger generations by better addressing their interests in wage and pension negotiations and adapting to the changing nature of work. Smaller, more militant unions in bottleneck industries may emerge as a potential strategy for trade unions to maintain their influence in key sectors, a change that may increase the likelihood of strikes. In summary, to avoid marginalisation, the Nordic unions must navigate the erosion of social norms about unionisation and further adapt to the evolving labour market.