Unions face extinction unless they evolve

2005

British trade unions face a painful journey to extinction if they fail to evolve, according to a provocative analysis from a leading business academic.

David Metcalf, Professor of Industrial Relations and Deputy Director of the Centre for Economic Performance at the London School of Economics argues that employers and Government are equally to blame for refusing to contemplate a real partnership approach despite the documented business benefits.

In a paper for The Work Foundation, "British Unions: Resurgence or Perdition", Metcalf points out that union membership in the UK peaked at 13 million in 1979, but haemorrhaged 5.5 million in the subsequent two decades.

Today, only one in three employees belong to a union – six out of 10 in the public sector but fewer one in five in the private sector. Indeed, Metcalf estimates that the real figure for private sector membership is nearer 12 per cent.

It is not surprising that union membership and influence crumbled away in the 1980s and 1990s, Metcalf says, since unions do not flourish in adversity.

The composition of jobs altered such that employment declined in unions' traditional heartlands of manufacturing and the public sector. The state also did what it could to undermine collectivism. In turn, employers were more likely to oppose unions, such that new recognition became difficult to achieve.

Simultaneously many workers lost their taste for membership and the number of 'never members' doubled to half the workforce. Unions' own structures and policies - male, pale and stale - compounded their problems.

The roots of union power - the closed shop and the strike threat - are now gone. Evidence suggests that the employer now has less incentive to oppose unions because their impact on productivity and profits is so modest. Equally, the worker has less cause to belong to a union because s/he gets a much reduced wage premium.

The challenge for the union movement is therefore to demonstrate that they can come through for workers without putting employers at a disadvantage and/or deliver for employers while simultaneously looking after worker interests.

Unions have seven million members, but 1.6 million of these are not covered by collective bargaining because, in many cases, the employer abandoned collective bargaining without formally derecognising the union.

Unions face a hard task convincing such members that it remains worthwhile to continue to belong to the union. Unions must also service their 5.4 million members who are covered by collective bargaining, the majority of whom are in the public sector.

Since New Labour came to power in 1997, the hostile forces of the 1980s and 1990s have largely evaporated. Public sector employment is rising, the state is at worst neutral in its dealings with unions and has also established, for example, recognition machinery, a national minimum wage and various family friendly initiatives.

Almost 3 million non-union workers say they would be likely to join if there was a union at their workplace. And the union movement generated a raft of initiatives aimed at their revitalization. Despite all this, membership is now the same as it was in 1997 and density has fallen two percentage points.

But in the longer run, Metcalf sees the new EU Directive on Information and Consultation as a potentially important influence on unions' futures.

It establishes, for the first time, permanent and general arrangements for information and consultation for all workers in the UK in organizations employing more than 50 employees and will cover three quarters of the British labour force by 2007.

The job for unions is to build on these schemes and to maintain and expand their role within them such that they are seen as the legitimate voice representing employees.

Although evidence from France and Germany suggests that a union presence complements these arrangements and makes them more effective union density remains low in those countries so perhaps, instead, this indirect voice institution crowds out a union voice.

David Coats, Associate Director at The Work Foundation said that the major challenge facing unions if they are to thrive in the future is to make an offer to potential members that is about 'getting on' at work as well as 'getting even'.

"And unions must appeal to employers too, showing that effective co-operation can deliver big improvements in organisational performance."