Background to the jobs free future and trade unions

Recently I wrote about the jobs free future, where the traditional model of a job for life is dead and industries that were familiar employers during the twentieth century are significantly reducing their need for labour. The jobs free future represents a major structural change to the global economy.

Venture capitalist, Steve Schlafman noted in a recent post that we are seeing the Uberification of the US Service Economy, and the same is likely to occur in Australia. Australian industry is being hollowed out now, with new job losses announced regularly. In recent times we’ve seen the car industry in Australia close down, Qantas reduce local jobs further, BP close their Brisbane refinery, and CSIRO announce job cuts.

And, while Ross Gittins assures that all of these job losses do not mean that we’re all doomed, it does demonstrate the future trajectory of traditional work in this country. The future of low skilled and manual work is not promising, and the new jobs will likely be in services, skilled, and digital work. Callam Pickering reported, in relation to Reserve Bank Governor Glenn Stevens’ speech on Economic Conditions and Prospects, that:

“Our economy will lose some manufacturing jobs but we will gain jobs in mining and services, in health and professional services, and in industries that we do not currently understand or haven’t been invented yet.”

Source: Callam Pickering, Why she’ll be right in the long run

What is not made clear here is that the jobs of the future are not likely to be stable full time jobs. They are more likely to be portmanteau jobs, where lots of little jobs are undertaken. And life in the world of a task based worker is not an easy one, as recounted by Brad Stone in My Life as a Task Rabbit.

Nor can every worker from old industries be retrained and redeployed into the emerging industries, as Michael Bloomberg commented:

“You’re not going to teach a coal miner to code. Mark Zuckerberg says you teach them [people] to code and everything will be great. I don’t know how to break it to you . . . but no.”

Trade unions as businesses

In this context it is interesting to consider unions as a business. And, like most other businesses, unions face challenges from the jobs free future.

Trade unions have served their members (a.k.a. customers) well to date by providing collective bargaining in relation to workplace terms and conditions . During the past century or so Australian unions have lobbied to achieve key employment and workplace reforms, from which most Australians benefit today, including:

The benefits of these reforms to workers are undeniable. However, they are predicated upon a world in which work is regular, predictable, and at least semi-permanent. The future of work is not like that; it is more likely to be disjointed, irregular, and impermanent for many workers. Further this model was predicated upon large employers of mass labour within an industry with which to bargain, and it was also reliant upon the notion that threats of labour withdrawal could force change. This is increasingly untrue, and employers have many options with which to respond to threats to withdraw labour.

The question is how unions will shift their business model to support customers who are not part of the regular routine world of work. What kind of collective model can support workers who move away from permanent or semi-permanent work within a single industry to task based and piece work across industry boundaries? And, what will this kind of shift mean for union funding models?

Further, how will unions manage in a world where the government is actively seeking to reduce union access to workplaces, remove the right to boycott, reduce or remove penalty rates and other conditions?

Core business

Historically, the funds held by unions are derived from a broad based union membership among the working population. However, the Australian unions have already experienced a substantial drop in membership over the past few decades, as noted by the Australian Bureau of Statistics (ABS) late in 2013:

“The proportion of employees who were trade union members in their main job has been steady at 18 per cent for the last three years, according to the Australian Bureau of Statistics (ABS). There were 1.8 million people in August 2012 who were trade union members in their main job.”

It is worth bearing in mind that the number of employed persons in Australia as at

February 2014 was approximately 11 million. The following ABS chart from 2011 shows the problematic position of unions even before one considers the digital revolution and the jobs free future.

Further, the Brotherhood of St Laurence reports that youth unemployment is reaching a crisis point, with Tony Nicholson noting:

“What it means for all these young people is that they’re at risk of never being able to get a foothold in the world of work,” he said. “And in our modern economy that means that they’re really being sentenced to a lifetime of poverty.”

With a declining membership, and consequent reduction in funding, the unions were already facing an uncertain future. Now we can add to their woes the disappearance of traditional industries and jobs. This also means that unions face increased funding constraints for future business growth strategies. The real question for unions is can they survive as the jobs they seek to protect disappear in increasing numbers?

Governance and management

In addition to the decline in membership, trade unions face other challenges. For example, the recent and ongoing scandals of the Health Services Union (HSU) with Craig Thomson and Michael Williamson; and the Construction, Forestry, Mining and Energy Union (CFMEU) bribes scandal that is now widening to other building unions.

The Abbott government recently announced a  Royal Commission into trade union governance and corruption and this is likely to further destabilise public faith in the union movement and it close associate the ALP. The stories emerging to date have indicated substantial organisational, management, governance, and cultural issues within the union movement.

Some trade unionists are starting to ponder the future of their business, such as Dustin Halse in 2012: Is there a place for trade unions?

The Australian Council of Trade Unions (ACTU) has released a number of papers exploring the future of unions in Australia, for example,  Urgency & Opportunity: union membership trends and observations 2012.

The chief response seems to be an ACTU campaign called Secure Jobs, Better Future, which fails to address the structural causes of job ‘insecurity’.

“Secure Jobs. Better Future is a national campaign to improve the rights and working lives of the 40% of the Australian workforce employed in insecure work.”

Source: Secure jobs, Better Future campaign – ACTU

However, there appear to be few concrete proposals for halting the decline in union membership. Nor does their appear to be any notion of how to approach the looming structural shift due to the jobs free future.

The future

Considering unions as businesses, the issues they face include a declining customer base, declining revenue, lack of customer focus, and problematic external conditions. The lack of customer focus is especially problematic. It is always fatal for a business to lose sight of the customer. Rarely can a business recover easily from a loss of customer focus – just look at Qantas and its current junk bond status. Further, the governance and management issues that have already come to light in some unions are likely to be reinforced by additional information from the Royal Commission.

Some unions are already seeking to address the skills gap in their management teams by accessing the National Workforce Development Fund to provide management training to their staff, for example Certificate IV in Frontline Management.  However, unions were only required to educate their personnel on union governance practices commencing in 2013:

“Changes to the Fair Work (Registered Organisations) Amendment Act 2012 on Financial Governance required all union officers with financial decision-making responsibilities (including elected officials, finance staff and members of management committee) to do FWC Approved training within six months of June 29th, 2013. In some circumstances, Unions now have until mid-2014 to comply. “

This means that the unions are now working to professionalise their management and governance practice in a hostile environment. They are doing so while fighting a rearguard action with the Abbott government about working conditions (for example attempts to roll back penalty rates and conditions), and while a Royal Commission is investigating the union movement.

If ever there was a time that workers needed organisations to represent their interests, that time is now. As Halse notes:

“In a political economy governed increasingly by the market-oriented doctrine of neo-liberalism, trade unions should not so easily be dismissed.”

However, it is hard to see how unions will survive the combined onslaught of poor management and governance, declining membership, and the decline of key industries that they have relied upon for the past century.

If the unions are not up to the challenge, then how will we protect rights and working conditions from deteriorating? How will we ensure that people participating in new forms of work are not exploited?

These are very real challenges that the union movement must ponder. They must step away from their internecine struggles within the unions and the ALP factions to focus on their real business and their real customers. Otherwise the union movement will continue to dwindle into irrelevance, and workers will lose their hard won collective bargaining capability.

Perhaps Alex White is right to think that the real future of unions is crowdfunded and crowdsourced:

“…decentralised, leaderless, temporary movements, empowered by online organising platforms like MoveOn, Change.org, Avaaz, Twitter and Facebook.”