The Decline in Trade Unionism in Australia - Case Study Example

Running Head: Union Decline Union Decline Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Introduction The decline in trade unionism in Australia has resulted in decreasing events of industrial actions by workers in Australia. Most authors argue the decline of the movement has been precipitated by the rise of a new economic order that gives preference to a company’s ability to compete above all other issues. The welfare of workers thus takes a backstage to enhance the competitive of organization in liberalised markets. Indeed the majority of Australia unionized workers come from the public sectors which is not involved in a competitive market rivalry. Recently, however the actions of several trade unions in Australia have led to the grounding of the Qantas fleet. This has refocused attention as to why the popularity of trade unions in Australia has waned and continues to decline with time. This paper explores the main reasons that have been given by various stakeholders and scholars as having contributed to the decline of trade union density in recent times. In the first section the paper traces the decline in trade union density back to the 1980s. Secondly, the paper analyzes how the forces of globalization alongside other local factors have contributed to declining membership in Australian trade unions. Finally, the paper concludes that the forces of globalizations in the form of structural change, government policy and employer policy are the main reasons for declining trade union membership. Discussion According to data by the Australian Bureau of Statistics the decline in membership of trade unions is more pronounced in Australia than in other western economies. According to Ost (2009), the union estimates 57.2 per cent of Australian workers were unionized in 1982 but by 1990 this number had declined to 54 per cent of unionized workers. However, the union estimates are influenced by the optimistic figures for trade unionism. Official ABS statistic put the union figures in 1982 at 48.2 which also declined to 40.5 per cent in 1990 (Ost, 2009). These earlier declines in trade union membership pale in comparison with recent trends which have led to less than a quarter of employed individuals being unionized. Similar trends in union membership were recorded in most other western economies. Recently, the rate of decline has accelerated in both Australia and other OECD countries. In response to the need to become part of the global economy, Most OECD countries including Australia have deregulated their economies and privatized State Corporations that were underperforming (Cooper and Ellem, 2008). The structure of the economy also changed significantly with most jobs moving into the service sector from the traditional manual sectors that were the bedrock of union power. In the service sector organization of unions became harder as the product of the service industry could not be separated from the people producing it. New forms of employment have also taken root that is disadvantageous to unionization. The forms termed by trade unionist as “Precarious employment” include outsourcing, contractual works and casual labourers (Waddoups 2005). Government policy also contributed to decline as the Conservative governments that were in power ignored trade unions or enacted legislation that discouraged union membership (Cooper and Ellem, 2008). Two factors have been found to cut across international boundaries when it comes to contributions to declining trade union membership are: public policy and the relative resistance of employers to the unionization of their employees. Although it is hard to disaggregate the total percentage of trade union decline that can be credited to structural changes accurately, it has the most profound effect on trade union membership. In the 1980’s the Unions in the United States were already feeling the heat of globalization in membership in trade unions in the United States decreased greatly, the conditions that can explain this decline are closely associated to the present decline in the Australian economy (Schelkle, 2011). During this period, the US experienced declining employment levels in highly unionised industries including the manufacturing sectors. Other sectors like the airline sectors came under competitive pressure as the economy became increasingly liberalized. Legislative changes meant that workers were better protected individually and therefore the need to join unions was not a great as before. In addition, American employers were becoming more sophisticated in their dealings with employees, in effect, undercutting the appeal of trade unions. Kuruvilla et al (2002), argues that employer policies were the main factors contributing to the decline in the United States. In most countries trade union membership in the public sector is greater than in the private sectors. Public sectors employment in Australia has been falling alongside with membership of trade unions. In Most data sources, the levels of unionisation in the private sector remain at almost half that of the public sector in most data sources (Waddoups, 2005). The establishment of branches of global corporations in Australia and other western countries has led to growth of non-unionisable forms of employment (Waddoups, 2005). Recently, there has been tremendous growth in casual labor, part-time work and contractual labor. Casual workers are not entitled to such employee benefits like annual or sick leave. Presently around 20.4 per cent of Australians work part-time (Cooper and Ellem, 2008). Among the industries that have embraced part time employment practices include the wholesale and retail industry, the community service; and recreational and personal services. Multinational companies are representing the largest numbers of employers who engage workers in the new forms of employment. On the other hand, Australian companies have had to adopt the new forms of employment in a bid to rein in rising labor costs and effectively compete with foreign organizations (Gaston and Nelson, 2004). Among the global factors leading to lower membership of trade unions is the average age of the working population. Modern workplaces are increasingly employing younger individuals. This has led unions to increasingly target these younger employees for recruitment. Despite these efforts registered trade union members among the 15-19 demographic remain relatively lower than average union membership (Kuruvilla et al, 2002). Younger employees have fuelled fears that union has a bleak future as most find union membership unappealing. According to Cooper and Ellem (2008), young people show very low interests in joining unions in their early work years. However, by mid-twenties the highest percentages of young employees reluctantly join unions. Similar disinterest in unionism among young people is also reflected in the United States, Canada and the United Kingdom. According to Wills (2001), employment opportunities for young people are mostly concentrated in low-density sectors. Additionally, Australian youths mostly work for short durations and apprenticeships are not unionizable. The rise of small workplaces is also a local factor hindering the growth of unionization. According to Wills (2001), only a very small per cent of workplaces with over 500 employees were non-unionized. In contrast, workplaces with between five and nineteen employees record a very high non-unionization rate. The challenge for unionization in small workplaces will continue to grow as small business become more numerous in the Australian economy. Current government policy favours the growth of small business further strengthening the growth of sectors that prefer lower levels of unionization. It is apparent the propensity of workers to belong to trade unions has been on the decline in Australia. Among the factors given for the decreasing interest in trade union membership, include ideological differences, management strategies, wages and wage fixing arrangements and government legislation (Kuruvilla et al, 2002). The modern business environment is very competitive and unforgiving for companies that are inefficient. This competitive environment has led to management of companies changing the way they relate to employees. Traditionally, management made use of indirect or direct threats to employees to obstruct them from joining trade unions. However, this has changed in modern human resource management that recognize the employee as an important stakeholder in the organization. In new organization especially those which are foreign owned unionization is discouraged by the management. To reduce the appeal of trade unions, modern organization offers employee some incentives. These incentives may include greater job security, enhanced job satisfaction; more channels to voice their grievances’, therefore reducing the need to join trade unions Trade unions should adopt new strategies to remain relevant in today’s employment relations. One of the ways they can stem the decline is by targeting young employees and students to encourage them to join unions early. Secondly, they should lobby the government to enact legislation that would allow part-time and casual workers join trade unions Conclusion The decline in trade union density continues to accelerate in Australia and other industrialized economies. The forces of globalization have been the biggest factor recognized as having contributed mostly to the lower percentage of employees who are members of trade unions. Trade union decline in the present century may be best explained by the convergence of structural changes and changing management strategies. A large number of new employers have adopted human resource practices that undercut the need to join trade unions. Faced by competitive business environment associated with globalization, most employers prefer to make employees allies rather than risk the confrontational stance of trade unions. For most businesses employing members of trade unions is just too risky and thus they make every effort to avoid unionized employees. References Blyton, P., Lucio, M. M., McGurk, J., & Turnbull, P. (2001). Globalization and trade union strategy: industrial restructuring and human resource management in the international civil aviation industry. International Journal of Human Resource Management, 12(3), 445-463 Cooper, R., & Ellem, B. (2008). The neoliberal state, trade unions and collective bargaining in Australia. British Journal of Industrial Relations, 46 (3), 532-554. Gaston, N., & Nelson, D. (2004). Structural Change and the Labor‐market Effects of Globalization. Review of International Economics, 12 (5), 769-792. Kuruvilla, S., Das, S., Kwon, H., & Kwon, S. (2002). Trade union growth and decline in Asia. British Journal of Industrial Relations, 40(3), 431- 461 Ost, D. (2009). The Consequences of Postcommunism Trade Unions in Eastern Europe's Future. 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