Social dialogue in transition

Social dialogue can help workers and companies adapt to the opportunities and challenges in a changing world of work, but low levels of organisation among workers pose a serious challenge and contribute to the decline in collective bargaining. We review the latest evidence of how social partners cope with today’s megatrends and aim to address structural shifts in the labour market. We use institutional variation in the OECD to track where social dialogue promotes job mobility, pay premia and compressed wage distributions—outcomes we believe signal resilience towards megatrends and future shock. We find that social dialogue is most favourable in countries where wage agreements are co-ordinated and decentralized. Co-ordination that permanently prioritizes wage restraint, however, typically skews wage growth towards high incomes. As social partners grapple with adapting their structures and increasingly rely on state intervention, governments have several instruments to support them to recruit and retain members.