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Unions aren't working if most people aren't getting a benefit from them.
What exactly do you mean by "not working"? Decline is broadly accepted as tied to deindustrialisation coupled with "defanging" legislation in the 80s, but falling membership is also often argued as part of a broader (intergenerational) cultural dissonance fostered in this era of anti-unionism being engrained in the public psyche, rather than the unions not being fit for purpose.
Recently βΒ the pandemic proved that unions are just as relevant and important for protecting workers. On a macro scale they were integral to broadening the scope of the furlough scheme, and many unions had a pretty healthy upswing of members (I think almost 100k nationally).
A broader view on the importance of trade unions in relation to pay growth (from 2018):
Andrew Haldane (Chief Economist Bank of England)
Trade union membership has been found to result in a pay premium for workers. In the UK, this premium is typically found to lie in the range 10-15%, though it may have fallen over time. There is also evidence that falls in rates of unionisation and collective bargaining have resulted in wages becoming more dispersed and differentiated across occupations and locations.
We can quantify these effects in our wage equations. In Table 1, we include the unionisation rate and estimate over a longer sample period (1892to 2015) to reflect the lower-frequency movements in unionisation. This suggests unionisation is positive for pay growth and (statistically and economically) significant.
Over the sample, a 10 percentage point rise in the degree of unionisation raises wage growth by around 25b asis points per year. Over recent decades, unionisation rates have fallen by 30 percentage points. Using the long-run estimates, that will have lowered wage growth by around 0.75 percentage points per year over the past 30 years, asignificant effect. Consistent with it, the sharpest falls in unionisation came in the 1970s and 1980s, coinciding with falls in the UK labour share. Rolling regression ssuggest the effects of unionisation on pay were largest during this period.
Was that the reason? Or was it because the perception was that they couldn't provide major services?
Unions aren't working if most people aren't getting a benefit from them. Declining union membership means the system isn't working, even if you attribute that to unions themselves being too effective.