IS DIGITALIZATION BAD FOR TRADE UNION DENSITY IN OECD COUNTRIES IN THE AGE OF GLOBALIZATION?

Abstract

Nowadays, digital transformation, which is an integral part of globalization, has a substantial effect on the labor market. Along with globalization and digitalization, the nature of work and the structure of the labor market have changed, resulting in a transformation in the relationship between employees and employers. This chapter aims to investigate the impact of digitalization on trade unions in 25 Organisation for Economic Co-operation and Development (OECD) countries over the period 2000-2019. The panel quantile regression results indicate that digitalization negatively affects trade unions in OECD countries in all quantiles. In other words, digitalization reduces trade union density. The labor force hurts trade union density in all quantiles. Wage positively affects trade union density in all quantiles except the Q09 quantile. Institutional quality negatively affects trade union density in the Q01-Q07 quantiles. Globalization has a positive effect in the Q01 and Q09 quantiles and a negative effect in the Q05 and Q06 quantiles. Economic growth positively impacts trade unions in the Q03-Q09 quantiles. Our empirical findings prove that since digitalization transforms the economic structure and nature of work, it causes a reduction in the importance of being a member of a trade union for the labor force. Hence, as digital technologies replace the labor force, it is inevitable that the protection and representation of unskilled labor by trade unions will decrease. Therefore, despite several contributions of digitalization in the sphere of life, it is crucial to keep the labor force's rights in the age of globalization for policymakers.