Decline in Trade Union Density since 1979 - Research Paper Example

Decline in Trade Union Density since 1979 Introduction Trade unions have often been established to achieve common goals especially for workers in an organization. Trade unions are primarily established to represent individuals in employment (Charlwood, 2002). They mostly bring together individuals and /or group of individuals with similar interests, objectives and values. Leadership, collective bargaining and loyalty are the key elements behind the structuring of the trade unions. However, trade union density has been on the downward trend (Birgit, 2009) since the 1970s. Several reasons can be attributed to this state of events. The following sections of this paper seek to unearth factors behind the declining presence of trade unions both in the public and the private sectors. Trade Unions and Their Roles The modern industrial relation system is mainly composed of three players; the government, labour unions and employers. It is notable that none of the three can independently act, although all their actions are shaped by prevailing political, market and technological conditions (Birgit, 2009). In an employment environment, conflict of interest between employees and management is not uncommon. Conflicts may sometimes include budgetary and financial expenditure, poor working conditions, and low pay. Trade unions are important organizations since they seek to instil harmony in the employment environment. They are vital for the adequate representation of the workers’ interests and performance of fair managerial practices across all levels of employment. On behalf of workers, trade unions often negotiate wages, workplace policies and safety, work rules, rules governing hiring, promotion and firing of employees, and employment benefits. Decline in Trade Union Density In the period between 1979 and 1997, a steady decline in the fraction of workers represented by labour unions was noted in the USA and Britain (Blandon, Machin & Van, 2006). Unfortunately the less educated workers who most need the unions have suffered a major blow as a result of this change. The decline in trade union membership has not been restricted only to Britain and the United Sates of America. According to German’s Confederation of Trade Unions, union membership dropped in 2008 by close to 1.1% (Birgit, 2009). While there have been slight improvements in trade union membership generally between 2007 and 2008 in Germany, this has not been the case in the past. As from the early 90s there was a steady decline in membership in German’s trade unions. Western Europe has experienced a steady decline in union enrolments over the last 20 years (Birgit, 2009): More dramatic has been the collapse of membership in Eastern Europe since 1989 when the iron curtain fell. A sharp contrast, for example, can today be seen in Poland whose unionisation level is below 15% while during the Soviet controlled era nearly all workplaces had unions. Mostly those who are currently members of trade unions in the country are employees of former state-owned companies. Out of the 27 states that form the EU (European Union), only 8 have over 50% of their employed populations being members of at least one trade union (Birgit, 2009). Surprisingly, even the first four most populated states of the EU have only modest unionisation levels. Even in developing countries, trade unions have faced gloomy times. With increasing unemployment rates such as the one that resulted from the Asian financial crisis in the 1990s trade unions have steadily been on decline. The Philippines, for example, experienced a steep decline in union membership from 3.6 million in 1995 to 1.6 in 2004 (Binghay, 2000). Globalization Globalization has been characterized by the shrinking of the world in time and space. The globalization process that involves multinationalization of capital without due respect to national origin has led also to the diffusion of processes of production around the world. Multinational companies have grown in size to extents beyond the control and grip of national policies. These companies have also tended to shift their points of production to areas where the cost of labour is cheapest. Globalization has with itself brought great uncertainties for industries across the world (Charlwood, 2004b). With an aim of maintaining competitiveness, companies have had to develop new survival strategies. In this regard, two main strategies have been pursued companies: the labour mediated change strategy and the market and technology driven strategy. While the market and technology driven strategy is directed towards cost cutting and technological upgrading for competitiveness, the labour mediated change strategy focuses on viewing labour as an asset rather than a liability. The latter strategy recognizes trade unions and their participation in bringing positive change in the work environment (Charlwood, 2004). Formidably though, most companies have opted for the market and technology oriented strategy which in effect has actually become an assault to trade unions. Trade unions have in such found themselves on the defensive side of the game. The drivers, forces and consequences of globalization have contributed to the decline of trade unions according to Hollinshead, Nichols and Tailby (2003). Rise of international production networks, increasing global capital mobility and economic competition, neo-liberal economic policies, privatization, rapid technological innovation, outsourcing, growth of the services sector, employer resistance to unionization, changes in processes of production, and the reduction of the manufacturing sector have exacerbated challenges faced by trade unions while also affecting their members’ commitments. Also, increasing job losses, downsizing and outsourcing, labour flexibilization, subcontracting, informalization and casualization of labour as well as job losses have robbed trade unions of their main constituencies; the regular worker. Without any doubt, increasing unemployment levels have resulted in the decline of unionization especially in cases where regular workers are displaced. Unfavourable Government Policies, Laws and Regulations The evident crisis that faced British trade unions is a clear indication of the declining density of trade unions. Trade unions earlier sought to restructure their economic institutions to match with the rest of the capitalist world. They were interested in advancing their collective bargaining power in the capital. In response, they received hostility from the state which was conscious about any looming conflict of interest between the trade unions and the state. British trade unions had earlier engaged applying their cumulative and political resources to tackle de-industrialization and economic assimilation. They had realized the undermining and devaluation of those resources by the state and sought to effect change. The state was however categorical in denying any political access to trade unions and was determined to restrict sternly the trade union’s industrial command (Blyton & Turnbull, 2004). Worse still, the employers valued preference to individual representation in spite of the collective and employees relation groupings. The perpetual pressure on the trade unions’ disintegration through undermining and devaluation of their political and collective resources by the state, resulted into gross withdrawal of membership. At least 40 percent of their members revoked their membership. As a result, the political, social and economic influence of the members declined considerably. During the conservative party governments of Margaret Thatcher and John Major, the hostile political climate to trade unions was directed to discourage strikes fuelled by unions (Blyton & Turnbull, 2004). During their rule, government policy was enacted to reduce the power of the unions in the labour market. Still, the policy was aimed at dividing the union members while at the same time make the labour market more segmented and flexible. The conservative government valued variation of payments which thwarted the justification of the trade unions. The highly skilled were paid highly on a market related perspective contrary to the trade union requirements. This widened the gap between the lowly paid and highly paid and as a result, the value between the unionizable and non-unionizable employees was significantly narrowed (Martin, 1992). As such, union membership became irrelevant to an extent of spurring its decline. Margaret Thatcher’s government in the 1980s introduced a number of laws that restricted union and closed shops. In fact, today, the British government has illegalized all agreements that require employees to become members of a union. The 1947 Taft Hatleyt Act of the United States, while permitting the union shop, has outlawed its counterpart – the closed shop. As a result, strike levels have lowered significantly since the World War II, following the fall of the trade unions. Additionally, self-employment, working on part time and shifting from male dominated labour force to a female dominated one, created a further weakness to the value of the trade unions. Anti-union Policies in Organizations As changes in legislation and industrial structures were enacted, trade unions were challenged with organizational requirements to suit the new state of events. It was common for the industrial managements to employ anti-union policies designed to limit the success of the trade unions. For instance, unions had a difficult time between choosing co-operation with employers and signing no-strike agreements without which they would not be recognized at all (Martin, 1992). Change in Employment Distribution and Neglecting of Labour Laws Changes in the distribution of employment back in the 1980s created recruitment challenges to trade unions. Further, decline of large-scale manufacturing industries replaced by the development of services from private sectors, created employment patterns which were hard to organize trade unions. In Britain alone, a 5.7 percent decline in employment from manufacturing sector was recorded between 1983 and 1988 (Martin, 1992). The changes of the dominant system of the industrial relations have contributed immensely towards the fall of the trade unions. The management of industrial concerns have been setting up terms and conditions of employment in independently. As a rule, the employees are required to consult with the management and settle for agreements while ignoring trade union requirements, national or industrial level conformity. Legislation governing or defending individual workers which were earlier entrenched in the collective bargaining requirements have also been neglected. Rise in Wage Inequality An additional factor behind the fall of the trade unions value is the rise in wage inequality. Trade unions reduce inequality through standardizing pay rates among workers within and across employment establishments. As many employers realize the threat of unionization, they have employed the scheme of raising payments and benefits well above the trade unions’ specifications. For countries such as United States and United Kingdom, the fall in real minimum wages resulted in rise in inequality. The actual value of minimum wage declined significantly across the period between 1970 and 1990 (Fishlow, 1999). In United States in particular, wage councils used to set sectoral pay rates for the young and the unskilled labour forces. The councils were abolished in 1980s and as a result, the minimum wages fell significantly creating a conducive environment for rise in inequality (Fishlow, 1999). This contributed immensely to the fall of trade unions. Organizational Reforms Following the election of the 1997 labour government, a turning point of industrial relations in the public sector was realized. Large portions of the public sector were privatized alongside restructuring of the remaining public service sectors into semi independent ventures. The conservative government valued fragmentation of the management in the public sector. It campaigned for organizational reforms which replaced the unified civil service. Such initiatives challenged the existence of the trade unions. The landscape of the public sector continued to change more primarily as a result of the conservative government. As the need for decentralized payment bargaining power arose, a more compelling management practice involving independent human resource practice ensued. However, it was undermined by occasional politicization alongside resistance for formally organized professional groupings (Edwards, 2003). Today, companies have greatly changed their human resource strategies (Rose, 2001). Apart from carrying out traditional human resource (HR) functions they have developed strategic HR plans. Further, companies have continued to embrace strategic human resource management and high performance work systems (HPWS) that are geared towards ensuring the wellbeing of workers. In other words, many companies no longer view their workers as liabilities but rather as assets. With some companies taking the initiative to provide good working environments, trade unions have in some way been left out of the bracket as they have been deemed unnecessary by their one time and potential membership. Economic Down Turn The economic down turn can as well have led to the decline in trade unions. As the organizations faced hard economic times, massive job cuts and few employment opportunities, flexible working patterns have been employed to address the problem of credit squeeze (Birgit, 2009). In as much as the trade unions fight for the rights of their members by persuading the employers to adopt policies which can weather the hard economic times, it is inevitable that the effects of the crisis are far reaching. The need for organizational sustainability and thus existence surpasses trade unions’ voice on job retention. This is evident as more job cuts continue to be recorded both in the public and private sectors of the economy despite the trade unions influence. Since value of the trade unions was primarily deterministic on job retention, its membership has fallen drastically as a result. Emergence of New Players One recognizable perspective according to some experts is the fact that new players have emerged to replace trade unions in the conscienizing and labour organizing arena. New players in this respect include NGOs (Non-Governmental Organizations), the church, the academic sector, POs (People’s Organizations) and a number of other players. The evolving environment has provided conducive environments for these new players to confront the plight of vulnerable and distressed workers (Butler, 2005). Trade unions as a result have opted to cooperate with such players and, from new a new perspective, have continued to address employees’ concerns and issues. The Future of Trade Unions The future of trade unions is challenged by not only decline of mass production organizations which supported their involvement, but also the dynamic new world which values individual relationships and autonomy (Blyton & Turnbull, 2004). Yet, series of restrictions and regulations have been enacted to prevent the success of the re-emergence of the trade unions. Due to the decline of large work places which had earlier served as the backbone of employment such as the steel works and the mines, male dominance in such industries has declined accordingly. As history would have it, the wave and thus growth of trade unionism was as a result of male manual labourers .This lend to the emergence of the new philosophy of unionism which comprises of organized and less skilled labour force. Consequently, as the earlier employment pattern is drastically changing towards more female to male ratio, the management teams are seeking more loyalty from employees. With that, formation and continuity of more trade unions is a compromise between the employer and the employees. Yet, following the privatization and contracting of most of the public utilities and running down of public services followed by job losses, a characteristic system of job insecurity has ensued. The objectives of trade unions on collective bargaining have been replaced by a conventional individualistic approach to employment requirement. As such, the value of trade unions continues to decline amid the challenging employment situation (Blyton & Turnbull, 2004). However, the rise of oppressiveness and dictatorial leadership styles in most of the countries do not justify the exclusion of the trade unions. Vicious attacks on the trade unions by authoritarian governments common in various countries currently, may spur the emergence of activism towards the upholding of trade unions. For a country upholding freedom of expression and democracy, it should allow checks and balances which may come from such unions. With the global outcry for democracy among nations, formal organizations such as trade unions will be a vital tool in championing for oppressive free administration. Thus, as the world becomes aware of the need for democracy, trade unions may be the empowered to fight for change. As such, the future of trade unions is subject to change positively towards increase in population density. The future of the trade unions is promising to take a positive trend and more members are likely to be enlisted. As a result, a rise in population density increase will replace the significant decline. Conclusion Trade unions have played a great role in the industrial society. However, several changes have occurred in the economic and political environments that have led to the decline of trade unions, their influence and position. In general, changing economic, political, legal, technological and social factors have led to the dramatic change in trade unions and their membership over time. The unions have had to adapt to these changing environments and thereby have changed their ways of operations in some cases. In other cases, the unions have ceased to exist. Works Cited Binghay V. 2000 Reinventing the Present State of Philippine Trade Unionism, viewed 15th November, 2009 http://www.upd.edu.ph/~solair/images/binghay_paper1.pdf. Birgit K. 2009 Decline in trade union membership lowest in recent years, viewed 15th November, 2009 http://www.eurofound.europa.eu/eiro/2009/04/articles/de0904029i.htm Blandon J., Machin S. & Van J. 2006 ‘Have Unions Turned the Corner?’ British Journal of Industrial Relations 44(2) Rose E. 2001 Employment relations financial times, Prentice Blyton P. & Turnbull P. 2004 The dynamics of employee relations Macmillan Publishers, UK. Butler, P. 2005 ‘Non-union employee representation: exploring the efficacy of the voice process’ Employee Relations: 27(3) Charlwood A. 2002 ‘Why Do Non-union Employees Want to Unionize? Evidence from Britain’, British Journal of Industrial Relations: 40(3). Charlwood A. 2004 ‘Influences on Trade Union Organizing Effectiveness in Britain’, British Journal of Industrial Relations: 42(1). Charlwood, A 2004b ‘The New Generation of Trade Union Leaders and the Prospects for Union Revitalization’ British Journal of Industrial Relations 42(2). Edwards, K. 2003 Industrial relations: theory and practice (2nd ed.), Willey-Blackel. Hollinshead G., Nichols P. & Tailby S. 2003 Employee Relations (2nd ed.), Pearson Education Ltd. Martin, R. 1992 Bargaining power. Oxford University Press, UK. Ross, G and Martin, A. 1999 The brave new world of European labour, Bergham Publishers. Read More