Italy Fact of the Day

by on March 19, 2012 at 10:45 am in Data Source, Law | Permalink

  • Italian labor unions represent more retirees than workers.

From a good piece on reforming Italian labor law in the NYTimes.

Addendum: Some commentators are asking whether this is surprising. Answer: Italy has far more retired union members than any other European country. Circa 2003-2004 (when 48% percent of Italian union members were retired) in France and Germany just 20% of union members were retired, in the UK 10%, in Spain 4.5%. Oddly, I could not find a source for the US, although some unions like the UAW clearly have more retirees than members my guess is that the overall number is quite low and certainly well below the Italian rate.

Willitts March 19, 2012 at 10:53 am

Most unions do.

What did the official say about that city in California that went bankrupt? They had three fire departments, and only one was working.

return March 19, 2012 at 11:14 am

Yes, this is a fact probably not widely known.

From the article, it is not obvious what “represent” means” but I imagine that retirees are allowed to continue voting for union leadership (I did a quick google search but did not find anything). That could create some perverse incentives.

Ted Frank March 19, 2012 at 10:57 am

Given that academics who propose reforming Italian labor law get assassinated, the situation is even far worse than that. http://marginalrevolution.com/marginalrevolution/2011/11/sentences-to-ponder-34.html

The Other Jim March 19, 2012 at 10:59 am

What Willitts said.

You really think this is specific to Italy? Take a look at AFSCME.

Daniel March 19, 2012 at 11:12 am

I have no idea if that is true or not. It wouldn’t `t surprise me, but I have become increasingly uncomfortable with how some leading newspapers and magazines like the NYT and The Economist write factual mistakes about the PIIGS.

prior_approval March 19, 2012 at 11:19 am

And that a union represents more retirees than workers is surprising how, in light of how much longer lifespans have become over the last two generations?

After all, the U.S. military currently counts many, many more servicepeople as ‘reserves’ than on active duty (read the enlistment fine print – I still have paratrooper friends who are considered to be the potential property of the U.S. military, even though their enlistment ended long before the last century did).

I would also be unsurprised if there are currently more retired than active journalists, for that matter.

Same would go for retired governors, congresspeople, or, dare I mention it, professors emeritus as compared to active faculty.

I think someone may have even come up with a term for it – was it something along the lines of the great demographic stagnation, or somesuch?

TallDave March 19, 2012 at 1:49 pm

Surprising, no. Sustainable, though?

Bill March 19, 2012 at 11:34 am

Tenured faculty never retire, or they go emeritus with privileges.

They must have a better union than the Italians.

John Thacker March 19, 2012 at 11:40 am

Previously a lot of universities did have mandatory retirement ages. My understanding is that most of them were dropped right about the time the first baby boomers started to reach them.

A lot of results in US government (and presumably elsewhere) can be explained by asking “What would have been best for the boomers?” That’s what happens in a democracy.

Bill March 19, 2012 at 12:06 pm

My next door neighbor is a former dean, and he tells me that with the changes in the law, and with tenure, faculty member cannot be forced to retire because of their age.

return March 19, 2012 at 11:43 am

The business and econ professors must have told the social worker & ____ studies professors that they should leave the wage bargaining to them!

wiki March 19, 2012 at 11:46 am

Faculty are not really covered by a powerful union. There is a faculty union but it has little say on many campuses and top schools have flouted AAUP rules on tenure routinely. Certainly there is no grand bargaining on salaries. Salary flexibility is one of the ways in which American academia has stayed ahead of much of Europe where salary schedules are often determined at the national level. In the US, salaries are usually not fixed both within and across departments. New assistant professors could earn more than older full professors. And stars in one field can earn an order of magnitude more than those in less popular or poorly funded areas.

prior_approval March 19, 2012 at 12:53 pm

‘Germany just 20% of union members were retired’
Well, there was this little demographic blip in Germany about two generations ago – the lack of men in that age cohort was quite noticeable, though as that generation is reaching its end, it is not as apparent as it was in the past.

And of course, East Germany throws another monkey wrench into those statistics. Consider that not a single East German worker in the DDR belonged to what anyone in the West would consider a union – and East Germany at reunificaiton represented a population roughly 20% of the Bundesrepublik’s.

And the final point is that what is important for German workers is the Betriebsrat (no American English equivalent at all), and union membership is exceedingly flexible. For example, workers switch unions – this happened in a big way during the German rail strikes, where the ‘radical’ union picked up a large number of members due to being more effective in forcing management to increase German rail engineer salaries to the lower end of the European average. Unions do not play at all the same role in Germany as in the U.S. (leaving aside certain details of how certain groups are treated, such as miners) – there is no need for the union to provide health care benefits in any sense, for example.

Frank Braconi March 19, 2012 at 1:16 pm

The pressumption seems to be that somehow this shows how entrenched Italian labor unions are. But the faster current union membership is declining, the higher the ratio of retired to active union members. So without further info, it would seem this stat would bring cheer to those who believe the demise of unions is a good thing.

Norman Pfyster March 19, 2012 at 1:28 pm

The Spanish number (4.5%) looked strange, until I looked at the next chart, which showed the increases or decreases in union membership over time. Spain didn’t have unions until the 1980′s (I assume after Franco died and Spain transitioned to a more open economy), so there are undoubtably lots more current workers in the union. Italy had a very large increase among the cohort probably recently retired, and significant declines in membership since.

TallDave March 19, 2012 at 1:48 pm

I’m not so sure, Tyler. I’d bet the teachers’ unions and public employees generally have worse ratios than the UAW, and isn’t that a majority of the unionized?

Also, when you can’t find a statistic like that in the U.S., you have to wonder why no one is looking at it.. Is there really no interest?

TallDave March 19, 2012 at 1:48 pm

*Alex

return March 19, 2012 at 3:19 pm

I looked at the pension plan (did GM freeze it?) for hourly workers by searching here for “General Motors”. The EIN of the plan is 27-0383222 / 003
http://www.efast.dol.gov/portal/app/disseminate?execution=e2s1

I figured GM is the biggest of the 3. At 9/30/2010 they had:
55,303 active workers
323,686 retirees

Uninformed Observer March 19, 2012 at 3:24 pm

What it suggests to me is that the endgame approaches. I would think that as the proportion of retirees in a union increases, the cost of agreeing to that union’s demands may increase, while the cost of refusing decreases. There must come a point at which the disincentive of a strike by an ever-decreasing pool of workers is no longer sufficient to safeguard the union’s claims. And at that point, the game is over.

Ape Man March 19, 2012 at 5:48 pm

Maybe I read the article too fast, but I don’t see where it says that unions represent retirees. In my union, unless you chose to continue paying dues, you will be dropped as a union member. Very few people continue to pay dues after retirement. Of course, the union is not worth much even when you are a member and in the work force.

Ape Man March 19, 2012 at 5:53 pm

Granted, this is a nit picky point. The real issue is the unfunded liabilities that exits whether or not a someone is formerly “represented” by a union or not. And also that the unions fight tooth and nail against any kind of reform.

gavinf March 19, 2012 at 10:45 pm

Another reason that the Australian economy is leading the world: state mandated superannuation paid by the employer into a fund of the worker’s choice, some of which are run by unions but still have to compete in the marketplace. Once the worker retires the state pension picks up any slack if funds are insufficient.

claudio March 20, 2012 at 3:33 am

In your Addendum you mentioned spanish figures.
One must be very careful with them, since spanish unions lie as a matter of principle about them, with the consent of the government. They have much less members than those they say and very few acting as a real ones, that is, paying the fee.
The main sources of found for spanish labour unions are: direct payements from the Estate (as the political parties have too but without the direct control of the voting results that those need), indirect -meaning founds payed to the unions but accounted on the Estate’s some other concept- payements and, also from the Estate, money given to them in the false pretence that they do formation of new skills for the workers. In that case they get payed for the number of students, but most of them never show up and are simply accounted to get the money.
Then there is the money they get in labour conflicts, where they act like a racket, taking money not only from the workers, as they representatives (since they are not members, you see?) but also from the companies as a black mail (payed in what we call ‘black money’ meaning out of the accounting books) just to take the deal.
The first two ways are very well known. About the other two I have had personal experience.

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