The state of the union(s): how a perfect storm weakened the workers' voices

With the Senate again rejecting the government’s bill to restore the Australian Building and Construction Commission, Prime Minister Malcolm Turnbull has the triggers he needs for a double-dissolution election on July 2. Unions will be a key issue in the campaign. In a series starting today, we take a close look at the history of trade unions in Australia, their political links, why their membership bases eroded and where they need to go from here in order to be a relevant and constructive force in Australian working life.

The governance, conduct and purpose of trade unions in Australia have been the focus of much recent political debate, not to mention public expenditure. Given the level of interest, you could be forgiven for assuming Australia’s union movement is at the height of its power and, as such, a key political and economic issue.

But Australia’s union movement is facing a perfect storm. Union membership is at its lowest point since before federation. Only 15% of employees are union members in their main job. That number drops to 11% in the private sector.

This is a far cry from the peak of 64.6% in 1948 and the consistent minimum of close to 40% the union movement enjoyed continuously from 1913 to 1992.

Union membership has fluctuated over the last century. But, it has plummeted since the early 1990s. What caused this? And what are some of the solutions being raised to stem the decline?

Falling membership base

A list of suggested triggers and exacerbating factors has emerged. Many reflect the international trend of union decline in advanced economies – but with an Australian twist.

The Australian system of conciliation and arbitration was born as a “historic compromise” between capital and labour. It was brokered just after federation in an attempt to circumvent industrial unrest, particularly in the maritime and agriculture sectors.

It enshrined a system in which representation of worker and employer interests was formally institutionalised. This led to growth in the number of unions, as well as unions’ significant engagement with – if not reliance on – the arbitration system.

The demise of the “blue-collar working class” and structural change that reduced the Australian manufacturing sector, beginning in the mid-1970s, struck at the heart of male-dominated union membership. The move towards a service-based economy further aggravated the situation. Unions lagged in attempts to organise low-paid female-dominated sectors.

It has been suggested that this factor was the king-hit for Australian unionism. But political and regulatory change arguably amplified its impact.

The election of the Hawke Labor government and the inception of the Accord between it and unions (via the ACTU) in 1983 could be seen as a high point of union political power. Though theoretically a tripartite agreement including employers, under the Accord unions essentially negotiated with the government to determine wage claims in exchange for improvements to the social wage through Medicare, superannuation and changes to tertiary education.

The Accord era undoubtedly placed Australian unions close to the heart of national policymaking. But that influence had currency only while Labor was in power. And it was not consistent even across the life of the Hawke/Keating governments.

Some argue that the Accord accelerated the decline in union membership (by more than 15% during the Accord years of 1983 to 1996) and reinforced union dependency on the state at the expense of rank-and-file activism. Also, the amalgamation process that began in the late 1980s – which was intended to provide economies of scale in “super-unions” – weakened many unions’ occupational identity.

What’s happened recently?

Regulatory change (beginning in the Accord years and ongoing), which decentralised bargaining and gradually dismantled the arbitration system, has relegated unions to the political and economic periphery.

A situation has emerged where unions cannot effectively challenge the proliferation of “non-standard” work arrangements – such as increased casualisation and independent contracting. As a result, unions are institutionally marginalised. Paradoxically, their capacity to effect change on the ground through membership power is limited by the difficulties in organising “non-standard” workers.

Australian unions have faced an increasingly hostile political environment which has fuelled regulatory change. This began with the Howard government’s notorious WorkChoices framework, which privileged individual bargaining, limited union access to workplaces and imposed greater barriers to industrial action.

Unions have not been passive recipients of these changes. They have tried – through amalgamations, the adoption of new organising techniques, and political campaigning – to reverse their fortunes.

But they have faced an almost perfect storm that is set to continue with the disruption of traditional industries and jobs, the intensification of competitive pressures on labour through the implementation of multilateral trade agreements and the political focus on industrial relations reforms.

Regardless of how unions survive this tempest, they will need to innovate and adapt to a continually evolving climate. If not, a key element of Australian social democracy will shrivel.