From Class to Market: Unionization in East European Ex-Communist Countries, 1990–2006

Purpose – East European ex-communist countries have now experienced nearly two decades of turbulent economic conditions and challenges resulting from the market transition. Since the early 1990s, there has been considerable decline in unionization throughout the region. This study uses information on union membership provided by four waves of the World Values Survey (WVS) to explain trends in unionization in East European ex-communist countries from 1990 to 2006.

Methodology/approach – We use random-effects and fixed-effects models to test predictions for three sets of explanations for cross-national and historical variation in unionization: industrialization, globalization, and institutions.

Findings – We find a degree of support for all three explanations of union decline. Overall, our analyses reveal the strongest support for industrialization and business cycle explanations. Inflation, unemployment, and urban population growth are all significant factors in shaping patterns of unionization in ex-communist East Europe. Our analyses show that aspects of economic and financial globalization have had significant, negative effects on unionization in the region. Manufacturing imports and foreign direct investment inflows appear to have undermined the position of domestic labor and contributed to declines in union membership.

Originality/value of the chapter – Successor and newly independent unions face the twin challenges of gaining public confidence as representatives of workers' interests, and withstanding increasing market pressures and conditions unfavorable for unionization. We provide evidence that without strong institutions to serve as buffers to external economic conditions, unionization levels in East European ex-communist countries are more open to market forces.