Title: Hollowed Out and Turned About
Description: This dissertation concerns itself with the negative effects of two structural economic changes in advanced industrial democracies, technological change and financialization on trade unions and how in turn labor market changes in interaction with existing political institutions affect the development of minimum wage policy and individuals' political affinities. I address these issues in four main chapters. In Chapter 2, I develop a new theory of how technological change causes trade union decline. Following work in labor economics, which shows that automation eliminates middle-wage routine task jobs and causes employment growth in non-routine task high- and low-wage jobs, I find that decline in routine task employment is a robust predictor of decline in trade union density for 21 OECD countries. Using linked employer-employee data from Germany, I find that higher levels of heterogeneity in between-worker skill profiles at the firm-level and in between-firm worker skill profiles at the industry level are associated with increased probability of withdrawal and a lower percentage respectively of participation in collective agreements.

In Chapter 3, I argue that there should be a negative relationship between stock market development and various measures of trade union strength. Investors have a preference for lower labor costs and higher short-term profits and increased control over management compensation enables them to realize these preferences. Using time series cross-sectional data for 21 OECD countries 1969-2008, I find that short-run increases in stock market development consistently associated with a decline in wage bargaining coordination and centralization, although less consistently associated with changes in union density and opening clauses. In Chapter 4, I explain a counterintuitive fact about wage setting regulation: countries with the highest labor standards and strongest labor movements are among the least likely to set a legal minimum wage. This, I argue is due largely to trade union opposition. I argue that trade unions will oppose the legal minimum wage when they are strong, specifically when they have high levels of what I call effective coverage, a combination of workforce coverage and permissiveness of labor law for cross-union sympathy action.

After demonstrating preference variation in line with the theory, I demonstrate the importance of effective coverage by showing how union minimum wage preferences responded to three labor market institutional 'shocks': the Conservatives' labor law reforms in the UK, the European Court of Justice's Laval ruling in Sweden, and the Hartz labor market reforms in Germany. In Chapter 5, I examine how labor market rigidity affects the political affinities of those marginally employed, termed 'outsiders' in recent comparative political economy literature. I argue that outsider attitudes should vary as a function of two types of institutions, employment protection and spending on labor market policy, which worsen and improve outsiders' labor market opportunities respectively. Using data on trade union attitudes and party preferences for 27 OECD countries, I find that relative to non-outsiders, outsiders are less likely to have favorable attitudes toward trade unions and more likely to favor far-right parties in countries with higher labor market institutional rigidity, those in which the difference between employment protection and labor market policy spending is greater.

I conclude in Chapter 6 by briefly presenting a normative conception of economic regulation, which I term 'Social Protection as Social Balance.' While recent work on the growth of economic inequality has focused largely on the growth in wealth of the top 1% in various countries, I argue that we should be more concerned with declining labor market opportunities for lower-skills, lower-education individuals. Social Protection as Social Balance' argues for a dual approach to protecting the least well-off: continued vocational and education training to help improve the skills of those who would lose their jobs to structural changes and stronger trade unions to both help ensure that the negative distributional consequences of these changes do not fall entirely on the least well-off and to boost the wages of the jobs which remain.