Thirty Years Of Falling Union Membership

Falling union membership could be one of the factors causing profits to grow so much faster than wages across the West, according to a new study from Natixis economist Patrick Artus.

“In most OECD countries (the exceptions being France and Italy), the trend has been for a distortion of income in favour of profits,” writes Artus. “In some cases this distortion is such that household demand is reduced without being offset by a rise in business investment.”

He proposes three possible reasons for this change: a fall in wage earners’ bargaining power (either due to falling union membership or simply competition from other markets), a structural rise in the capital intensity of production, or increasing demands...