That membership rate has steadily declined over time, extending a broad trend apparent since at least the mid-1970s. In 2016, membership of trade unions stood at 23% (Chart 5). Today, around 6 million employees are members of trade unions, less than half the peak of around 13 million in the late-1970s. That fall in union membership rates has been broadly based. It has applied to both males and females, although the fall in membership has been greater among males with rates falling from 35% in 1995 to 21% today. It has occurred in both the public and private sectors, although public sector employees remain around four times more likely to be union members. And it has been true across all age groups, although rates of union membership tend to be lowest among younger cohorts, with rates among the 16-24 age cohort 8% compared with 30% for those aged 50 and over. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  The fact that unionisation rates have been falling within each age cohort over time, and are lowest among the young, suggests the downward trend in rates of unionisation may still have some distance to travel. For example, if unionisation rates were to continue to decline at the same average rate as over the past decade, then they are likely to fall to around 10% of employees, or 3 million people, within a generation. A more recent labour market trend is the increased importance of self-employment.
One source is empirical research on wage behaviour. This literature is best-developed in the area of unionisation. It suggests there is a clear wage premium associated with trade union membership, even once we take account of differences in workers’ skills, sectors and regions. 11  There are a number of possible reasons for this wage premium, including the greater bargaining power union membership confers. There are also a wide range of estimates of the scale of this wage premium. These appear to vary widely across different countries, regions and sectors. Nonetheless, estimates of the aggregate wage premium in the UK are typically centred in the range 10-15%. 12  There is evidence this wage  premium may have shrunk over time, perhaps reflecting diminished union membership or increased competition in the labour market. 13  And there is also evidence decreased unionisation may have made  wage-setting more dispersed and localised. 14  10  This is based on data from Reed on around 15 million advertised job vacancies between 2008 and 2016. There are various possible reasons for ‘self-employment’ being included within a job vacancy description. These may include reduced National Insurance contributions and increased flexibility over working hours. 11 Lewis (1986). 12 Bryson (2014). 13 Bryson (2014). 14 Gregg et al (2014).