Trade unions — adapt to the modern world or die

Union leaders could have been forgiven for hoping that the future looks ever so slightly brighter for their movement. Public concerns about low pay and insecurity have soared in post-crisis Britain, there is a resurgent debate about the quality of work and political parties are competing on their proposals to regulate the jobs market.

Yet the stark reality is that the British labour movement is shrinking fast. Statistics published by the government on Wednesday show union membership fell by more than a quarter of a million, the largest fall in more than two decades, bringing the total to 6.2m — under half its level in the 1970s. This is like a country not much bigger than Scotland losing the population of Aberdeen in the space of a year.

The long-term reasons for union decline are familiar: sweeping industrial change, anti-union legislation, shifts in social attitudes and the rise of outsourcing and offshoring. Prolonged austerity is also squeezing the public sector workforce — indeed, much of this year’s drop can be accounted for by a fall in heavily unionised parts of the public sector, such as education.

The result is that union membership now stands at just 23.5 per cent of employees (or 21 per cent of all those in work, including the self-employed). Private sector membership is 13 per cent and just 10 per cent in London. Even these figures cloak the extent to which memberships are skewed towards older, better off and public sector workers. If you are over 50 and in a high-paid role in the public sector, you are about 20 times as likely to be a member as someone under 30 and on low pay in the private sector.

The big challenge union leaders should most fear over the next decade is not tech or trade but the impending demographic crunch. A generation of baby boomers, who first joined their union when the labour movement was in its pomp, are nearing retirement. As millennials fail to replace them in anything like equal numbers, as night follows day, membership will drop. Unless something changes we should expect membership to fall to 17 per cent of those in work by 2030.

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https://www.ft.com/content/f65a8510-4626-11e7-8d27-59b4dd6296b8This year’s decline will sting union leaders all the more as it comes at a time when they thought they were gaining traction. Whether it is the impressive campaign on school cuts, or the hounding of failing employers such as Sports Direct, unions have made waves. It is a salutary reminder that winning an argument doesn’t necessarily secure new members.

Complacency is a barrier to the type of thought and action required — and it comes in different forms. One version can be found among some, though by no means all, union leaderships. It hopes that salvation will eventually come through the political realm in the form of legislation that decisively tilts bargaining power back to workers. In the meantime the priority is inter-union turf wars and mergers rather than the enervating task of attracting new recruits in hard-to-reach sectors.

Complacency of a very different sort is exhibited by those politicians and commentators who view union decline as the inevitable and unlamented passing of a bygone era. Sure, a modicum of concern about workplace standards is warranted. But an active state can bring this about, so what’s the worry?

Now, it’s true that the state plays a vital role. But there is a limit to its agility and a risk of legislative over-reach. Insecure workers also need living, breathing institutions capable of making collective deals, supporting careers and insuring against risks.

That’s as true today as it ever was because power in the labour market still matters. In flexible market economies employers will always find new ways of shifting risk on to the workforce, often on to those least able to bear it. Unions are a rare countervailing force. They have led the way in confronting gig economy companies flouting employment law or care-providers dodging the minimum wage. In a union-free world, such abuses would go largely unchecked.

The future of workforce representation matters for another reason: generational equity. Organised labour, by and large, is ageing labour. Today’s young workers risk being denied yet another of the social supports that their forebears took for granted.

Some of our traditional unions are capable of winning some battles while failing to recruit the next generation on which their survival depends. If they don’t adapt to our fragmented jobs market, new organisations will emerge to challenge them.

No one really knows exactly what an enterprising 21st-century unionism could look like. But it is a safe bet that it would need to be low cost and as digitally savvy as the other services on which young workers rely in other parts of their lives. Above all, it will command support through the practical services it offers, and the workplace problems it solves, rather than resting on appeals to wider causes. If, say, insecure workers are being fleeced by employment agencies extracting a large slice of their meagre earnings for little in return then — rather than start a campaign — unions should seek out and back new entrants prepared to cut better deals.

Amid the uncertainty about the future of the labour movement one sure bet is that more of the same will fail. The default setting is that as boomers fade from the workforce, so will the unions that they joined. That is not something we should be relaxed about. Today’s unions must innovate today or shrink tomorrow.

The writer is chief executive of the Resolution Trust Copyright The Financial Times Limited 2017.

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