Focus: Power from the people: why trade union decline should concern us all

Abstract

INTERNATIONAL union rights Page 6 Volume 22 Issue 2 2015 The dismantling of trade union power and influence has been a plannedfor outcome of sustained implementation of neo-liberal policy agendas since 1979 The latest collection of essays4 from the Resolution Foundation focuses on this very issue, albeit with attention to the plight of young workers (and their relative absence from trade union membership) a large proportion of whom increasingly find themselves locked out of the UK economy on the ‘low road’ of poorly paid insecure work and lack of career progression. Power The dismantling of trade union power and influence has been a planned-for outcome of sustained implementation of neo-liberal policy agendas from the first Thatcher government of 1979, through the New Labour era, under the Coalition government, and these policies will be continued under the newly elected Tory government. This loss of influence has though had wider implications other than in the arena of pay and reward. As the IMF report suggests, the resulting economic inequality ‘could also hurt society by allowing top earners to manipulate the economic and political system’. This arguable manipulation is seen, for example, in the joint report of the House of Commons Scottish Affairs and Business, Innovation and Skills committees, into the collapse of logistics firm Parcel Link on Christmas Day 20145 . The firm maintained trading during the run-up to Christmas knowing of impending liquidation and that it was unlikely to be able to afford the minimum period of consultation prior to redundancy let alone notice of contract termination . Due to the complicated way in which City Link was purchased by private equity firm Better Capital it is the taxpayer left with the redundancy bill, and thousands of self-employed drivers are unlikely to see outstanding fees paid. Complicit in this manipulation, and using the mantra of ‘the fight against red tape’, was the Coalition government who in 2013 introduced fees to pursue a claim through the Employment Tribunal Service (ETA) for a case like that arising from City Link. To compound the situation of workers like those at City Link, in the year prior to the introduction of fees the Coalition reduced the period during which employers had to consult with unions over mass redundancies. It should be a profound concern that a firm like Better Capital can behave with such arrogant disregard to the welfare of its employed and selfemployed staff and face no judicial or governmental penalty as a result. Dependency The Conservative Party and parts of the UK media would have us believe that Britain suffers from a ‘dependency culture’ particularly in the W ho benefits from trade union decline, and what lessons can we draw from this analysis about the state of the political economy in the United Kingdom (UK)? Power from the people1 by established International Monetary Fund (IMF) economists, Florence Jaumotte and Carolina Osorio Buitron, provides an intelligent, robust analysis of the correlation between the reducing size and influence of trade unions as an institution of labour markets in advanced economies, the increasing wealth of the top 10 percent in these economies, and the shrinking value of wages for low and middleincome earners. Much of this analysis can be garnered elsewhere . For example the UK’s Office for National Statistics (ONS) has charted the steep, persistent decline of the value of wages in marked contrast to increasing productivity and overall profitability of private sector business2 . What is of allied concern though, is what structural factors are at play that catalyse trade union decline, precipitate the increasing precarity of UK workers and have resulted in a profound imbalance in the status of the average UK worker relative to that of corporate power and influence. Pay Some economists argue that strong trade unions disrupt ‘market clearing’ influences which normalise and stabilise wages in free market economies. Jaumotte and Buitron unravel this well-worn trope, dismantling also the free market assumption that trade unions are a causal factor of high unemployment. ‘The empirical support for this hypothesis is not very strong, at least within the range of institutional arrangements observed in advanced economies .For instance, in an Organisation for Economic Co-operation and Development (OECD) review...