Driving a hard bargain on pay

May 20, 2012

by Michael Inman

The GFC has halted a decline in union membership but more can be done through collective bargaining.

Nurses vote on industrial action during their EBA negotiations in Melbourne in 2011.

Nurses vote on industrial action during their EBA negotiations in Melbourne in 2011. Photo: Angela Wylie

The Craig Thomson and Health Services Union affair has done little to improve Australians’ belief in trade unions.

But there appears to be a ray of hope on the horizon for the once mighty workers organisations.

Recent statistics, from the Australian Bureau of Statistics, show membership numbers have bucked a 20-year decline and remained steady since 2010.

The result is a small piece of good news after union membership more than halved in the past two decades.


In 1992, 43 per cent of men and 35 per cent for women were members.

It now sits at 18 per cent, or about 1.8 million people nationwide.

ABS statistics show the number of union members grew by 46,900 in the year to August 2011, although they remained steady as a proportion of workers.

The ACT had the lowest proportion (14 per cent) of employees who were trade union members in their main job.

Even though government employees are 43 per cent unionised, only 13 per cent of private sector workers are members.

Oddly, the Global Financial Crisis appears to be the saviour of the movement, with figures showing a small rise in membership between 2008 and 2009.

Australian National University’s Dr Rick Kuhn says the result is hardly surprising.

Kuhn says that struggle is a key ingredient to a healthy union movement.

While countries such as Australia and the United Kingdom have displayed a decrease in membership in recent years, the nations of South America, Europe and the Middle East experienced high membership rates.

He says austerity measures in Europe have caused the spurt in growth in union membership.

Similarly, post-revolution Egypt is an example of the union movement in blossom.

”Serious struggle provides a healthy union movement [but] we haven’t seen that for a long time in Australia,” Kuhn says.

”But where there is struggle, the union movement in Australia is healthier.”

Kuhn used the Victorian nurses union as an example.

Victoria’s 30,000 nurses last month won a pay rise after months of industrial action, which included defying Fair Work Australia and industrial relations laws.

As a result, union density among nurses is high.

”When there are serious fights, lots of workers can see the point in joining unions,” Kuhn says.

”When unions back off, are afraid to take industrial action, when the relationship between the Labor Party and union officials is a brake on industrial activity – that’s when unions stagnate.”

Kuhn says the decline in Australia coincides with the Prices and Incomes Accord, an agreement struck between the unions and Hawke-Keating Labor governments from 1983.

The accord ran for more than a decade, with unions pledging to restrict wage demands if the government minimised inflation.

With no struggle, union membership began to wane.

The accord ended when a newly elected Prime Minister John Howard seized power in 1996, which marked legislative changes to undermine the power held by unions.

But James Cook University senior lecturer Dr Louise Floyd says Australians didn’t at first realise that Howard wanted to individualise the workforce.

Floyd says Howard wanted to put people on individual contracts, removing the incentive to be part of a union.

In the end, the union movement was heavily involved in turning public opinion against the then Prime Minister at the 2007 election.

While much of Howard’s reforms have been repealed, and replaced by the Fair Work Act, Floyd says it’s left a lasting legacy.

”The rights of business to function efficiently and prosperously are in the forefront of people’s minds.

”It’s just a matter of balancing that with the rights of workers to get a fair day’s pay for a fair day’s work.”

But Floyd says Howard’s influence doesn’t explain the entire decline in unions.

She says the post-industrial Australian economy, casualisation of the workforce, corruption within unions, and removal of legislative constraints are also responsible for dwindling numbers.

RMIT University collective bargaining expert Dr Iain Campbell says membership rates isn’t necessarily the best way to gauge union power.

”There’s an open question about how to assess the strength of the union movement,” Campbell says.

”In Australia we assess it by membership numbers, which have clearly been declining.

”But another indication is collective bargaining coverage, that’s the reach of the unions when they negotiate wages and conditions.

”Is it confined to membership or does it have a broader reach? Because there’s a broader influence on wages and conditions unions are able to procure.”

Campbell uses France as an example, where union membership is about nine per cent but collective bargaining coverage is up to 80 to 90 per cent of workers. Collective bargaining in Australia, in comparison, is about 35 to 40 per cent.

So are the days of collective bargaining in Australia at risk?

”Collective bargaining is under enormous pressure, partly as a result of the legislative system which both encourages and restricts collective bargaining to a single employer level.

”It impedes one of the most solid bases for collective bargaining and the most useful for the economy, which is bargaining on an industry level. Collective bargaining needs to be supplemented by legislative provision.

”The basic thrust of trade unions is to secure continuous improvements for wage earners but there needs to be a balance between seeking sympathetic governments to take some aspects of wages and conditions out of competition through legislation or collective bargaining.”

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