The change in the structure of employment has led to a remarkable transformation in the relative importance of trade unions and "non-employees" within the workforce. "Non-employees" include owner-managers, contractors, own account workers and so on. They now considerably outnumber unionists within the workforce. Nor are these people underpaid. In general their income levels are above those of those of unionists.
Thirty years ago most employees belonged to unions and even in 1986 the figure was 46%. On the latest data, unions can claim 24% of employed workers. However, once contractors or worker-employers and other similar workers are included the unionised share of the workforce drops to about a fifth.
The Cole Royal Commission into the building industry is showing how unions use their muscle to rope-in reluctant workers. Some labour hire firms have to pay their employee's union subscriptions as a condition of being able to operate. Even so union membership as a share of the working population is in precipitous decline.
This is all the more so for private sector employees, who are far less unionised than their public sector counterparts. 48% of public sector employees but only 16% of private sector workers are in a union.
A traditionalist might argue that public servants continue to flock to the union banners because, in contrast to the private sector, the government sector ruthlessly exploits its human fodder! More probably, unions continue to occupy the heights in the public sector because many government workers are ideologically disposed towards them. Also, in some cases, the unions offer a valued service, for example in providing insurance to teachers.
But outsourcing, especially in the public sector, means a steady erosion in union coverage of the workforce. Outsourcing of tasks previously undertaken by employees is in part a budgetary response to the excessive costs and inflexibilities brought by union conditions of employment. It augments other trends that are reducing the importance of the traditional employer-employee model, trends which include an increased preference for part-time work, and a greater need for specialised services.
By contrast, to the mauling that union membership is receiving at the hands of workers with choice, the "non-employee" element of the workforce appears to be growing strongly. Non-employee workers account for an estimated 23% of the total workforce and 28% of the private sector workforce. By contrast union membership is down to 21% of total workers and only 16% of private sector workers. And the union membership is artificially boosted because it includes reluctant contractors who are forced to join up. This is certainly the case with those contractors working on building sites who have Troubleshooters as their agent.
The power of unions in some workplaces stems from the radical nature of their leadership and its determination to exercise control. By contrast, most workers just want to get on with their lives. For most workers work is only one of a great many important things in their lives; for many it is simply a means of gaining income to do other things. So the prominence a union might gain from militancy in a particular work environment tends to undermine its attraction in more general situations.
Union leadership czars increasingly resemble dinosaurs on the cusp of extinction. Internecine disputes and the imperial way that union bosses without consultation move the membership to whom they are supposed to be responsible between ALP factions and sometimes to different political parties must surely be further detracting from their appeal.
The declining importance of unions goes to the heart of the reforms to the Australian Labor Party that Simon Crean is trying to bring about. Unions are losing their relevance to the Australian workforce, yet continue to command 60% of the votes within the ALP. Other centre left parties have managed to break the now damaging stranglehold that their union-creators had on their policies. The ALP will join the unions at the margin of relevance unless they follow suit.
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