Labour market segmentation affects union density

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According to a recent survey, conducted in April 1997, the density of trade union membership amongst Greek workers appears to be falling. This finding has sparked fierce criticism of the unions, which are blamed by many media commentators for this process. Nevertheless, declining rates of union density can also be explained as the result of other factors, in particular the segmentation of the labour market.

Debate on the role of the trade unions in Greece has been boosted recently either by interest in issues that have arisen out of the current social dialogue process - such as territorial pacts (GR9703109N) and working time arrangements (GR9704110F) - or by the findings of surveys that reveal a weakening of their representative status amongst workers. Many commentators speak of a "crisis of representation", which they attribute to the practices, functioning and other characteristics of the Greek General Confederation of Labour (GSEE) and the rest of the union movement in general.

Nevertheless, low levels of worker participation in the unions may also be interpreted by reference to developments in the labour market and, more specifically, by its fragmentation into different, more or less distinct segments, each of which satisfies specific, distinctive production needs.

Factors affecting union density

A survey carried out by V*PRC (sic) - a consultancy - on behalf of GSEE between 14 and 21 April 1997 on workers' participation in unions revealed the following findings, amongst others:

  • only one in three workers a member of a union;
  • even so, 90% of workers feel that they need unions;
  • 70% of working women are not union members compared with 60% of men;
  • participation of young people aged 18-24 in unions is extremely limited (about 10%) and amongst those aged 25-34 it is significantly lower than the average (about 25% in comparison with 35% for all ages); and
  • 25% of workers in the private sector are union members compared with 75% in the public sector.

Finally, the percentage of those who are not union members varies with pay (see the table below): those earning either relatively low pay or relatively high pay participate less in unions. The greatest level of participation is amongst workers who earn near the average wage.

Union members as a percentage of employees, by salary
Monthly salary (in thousand GRDs) % union membership
.
<100 14.5%
100-500 23.4%
150-200 43.7%
200-250 60.9%
250-300 50.0%
>350 50.0%
Average 35.3%

Recent survey findings on labour market segmentation in Greece may help to interpret these survey results.

Segmented labour markets

According to recent studies, the labour market in Greece tends to be segmented: that is, it is separated into segments with particular characteristics, each of which corresponds to definite and particular production needs. The two basic segments of the labour market are:

  1. The primary or "core" segment of the labour market, where mainly male workers earn pay above the national average and jobs are governed by a clear institutional framework. The development of this primary segment of the labour market will probably intensify as the technological and organisational modernisation of the internationalised sector of the Greek economy demands a greater participation of employees. A recent study showed that the primary segment of the labour market, according to Labour Force Survey data, comprises the following groups:
    • men aged 30-64 regardless of educational level; and
    • women aged over 30 with a university degree.

    That is, participation of men in the primary segment of the labour market is guaranteed by gender and age, though for women a higher educational level is demanded. Below this segment of the labour market, clearly in an inferior position, are women with a high school diploma and aged over 30.

  2. The secondary segment of the labour market, where women and young people have a strong presence, is characterised by below-average pay and a loose to non-existent institutional framework for labour relations, and hence comprises a "flexible" labour force. This segment of the labour market tends to develop to the degree that unemployment and deregulation are increasing and to the degree that the adjustment of a part of the Greek economy to international competition is based on flexible, low cost labour. The secondary segment of the labour market, according to Labour Force Survey data, comprises:
    • young males aged less than 30, excluding university graduates who form their own category;
    • young females less than 30, regardless of educational level; and
    • females of low educational level aged over 30 years.

Commentary

The findings of the union density survey show that women, young people, those employed in the private sector of the economy and those on low pay appear to have a lower membership of trade unions. This has to be correlated with findings concerning the duality of the labour market.

Women and young people have a high level of participation in the secondary segment of the labour market and are paid at lower rates than those employed in the primary segment. The secondary segment of the labour market also correlates almost exclusively with the private sector of the economy. Consequently, the categories of the labour force that have high participation in the secondary segment of the labour market are the categories that show a low participation in unions.

Low participation is therefore not a characteristic of women, young people and the low-paid, but rather a characteristic of the secondary segment of the labour market where - it so happens - many low-paid women and young people work.

This discussion helps us to interpret the fact that the average workers' participation in unions does not exceed 35%, even though 90% of those surveyed said they needed unions. The degree of participation represents an average of the two different segments of the labour market; in other words, the primary segment in which participation in the unions is high and the secondary segment in which participation is very low. Consequently low participation must be attributed mainly, if not exclusively, to the secondary segment of the labour market.

However, why is union penetration in the secondary segment of the labour market extremely difficult? There are at least two reasons: first because of legislation which prohibits the formation of a union in businesses which employ fewer than 20 people; and second because power relations in the secondary segment of the labour market have shifted against workers during the last five years due to the increase in the rate of unemployment. (Eva Soumeli and Elias Ioakimoglou, INE/GSEE)

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