Labor unions, also known as trade unions, reached their peak in the advanced industrial countries of the G7 and Organization for Economic Cooperation & Development (OECD) in the late twentieth century; since the 1980s however, their memberships have declined drastically, in some countries by as much as 50 percent. The labor movement arose in the nineteenth century to represent workers' interests in collective bargaining and to protests against poor wages and work conditions. From their peak in the twentieth century, unions have declined to represent much smaller numbers of workers today, in many countries being active mainly among public sector workers, such as in the United States. The rise and fall of union power In their rise during the twentieth century, labor unions were tightly connected to political parties of social democratic or socialist bent, while also being connected with Christian democrats in some continental European countries. As these parties came to power in the post-WWII period, unions were institutionalized into a system of social partnership with employers and the government in many countries. This agreement minimized labor disputes, while focusing on increasing productivity, which led to a period of unprecedented economic growth. As this system ran up against intractable economic problems in the 1970s, however, parties came to power who pursued a 'neoliberal' agenda of liberalization of the labor market and the privatization of nationalized companies. Since the late 1970s, these policies have caused union membership to decline drastically, as unions could engage in the same level of collective bargaining in a more interconnected and globalized international economy.

Labor unions, or trade unions as they are known in Europe, are organizations formed by workers in order to represent their collective interests, particularly in relation to wages and working conditions. Historically, labor unions emerged during the industrial revolution of the nineteenth century to represent the interests of industrial workers, who flocked to work in factories, mines, and other growing manufacturing enterprises. In most high-income countries, labor unions reached their peak during the post-WWII period, when governments mediated between the interests of labor unions and the owners of capital. With the economic crises of the 1970s, however, the labor movement suffered historic defeats in Europe and North America, with union density declining rapidly in many countries due to a host of pro-market and anti-union policies which have come to be referred to as 'neoliberalism'. Labor unions today In the twenty-first century, labor unions have retreated from their key role in national economic decisions in many countries, as globalization has lowered barriers to movement of labor, enabled 'off-shoring' jobs to lower wage countries, and promoted the lowering of labor standards in order to pursue cost competitiveness. In spite of this trend, certain regions still showcase high levels of union density and retain their traditions of unions being involved in determining economic policy. Notably, the Nordic countries make up five of the top six most unionized countries, with Iceland in first place being followed by Denmark, Sweden, Finland, and then Norway.

Other notable trends among the top placed countries are states which have had a historical relationship with communism (often a key driver of the labor movement), such as Cuba, Vietnam, China, and Kazakhstan. In the wake of the Covid-19 pandemic, labor unions and the wider labor movement has become more prominent, as workers have sought to fight for health & safety conditions in the workplace, as well as to combat high inflation related to the pandemic.