Are Labour Unions Obsolete in the New Global Economy?

By Wells, Don | Inroads: A Journal of Opinion, Summer-Fall 2003 | Go to article overview
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Are Labour Unions Obsolete in the New Global Economy?

Wells, Don, Inroads: A Journal of Opinion

AROUND THE WORLD UNIONS ARE IN DECLINE. FOR THE FIRST TIME since the 1960s the proportion of Canadians who belong to unions has fallen below 30 per cent. In the private sector, once the main bastion of organized labour, the proportion of union workers is down to 14 per cent. Those employees whose numbers are growing the fastest in Canada--the young, immigrants, private service sector workers--are the least unionized.

About union decline there is no doubt, and many theories have been advanced to explain it. One theory is that these trends reflect the irrelevance of unions in the new global economy Thanks to new technologies and management systems, workers in "post-hierarchical" organizations are now "empowered" on the job. Old antagonisms are said to be dissolving in a new spirit of cooperation. We're all bosses now. Academics talk about liberated, fulfilling work not as a radical goal but as capitalism's own project. From a pragmatic perspective, it is argued, this new cooperation reflects the realism of our times. In today's hypercompetitive economy, labour-management conflicts are luxuries we can't afford. Who needs unions?

However, despite all the talk about "post hierarchical" work, it is extraordinary how little evidence supports this view. When studies are done of workplaces where this kind of liberating work is supposed to exist, few find appreciable increases in workers' control. Typically, management control is stronger. Except for some categories of highly skilled workers (a minority) and some marginal accommodations to worker preferences, the old divide between those who design work and those who do it, between those who order and those who obey, has not changed much at all.

Perhaps this is why, outside human resource management textbooks, the language of workplace "empowerment" is heard less often these days. In its place, the more pragmatic language of "competitiveness" and "survival" has emerged as the dominant argument for union decline in the new global economy. "Free markets," a set of abstract forces out there, have their own in-built imperatives, we are warned. Non-unionism is at the top of the list.

This seems plausible on the surface. After all, the Canadian economy is highly dependent on international trade, especially with the United States. The United States has a far lower rate of unionization than Canada. Indeed, it has long had one of the lowest rates of unionization in the industrialized world. If low rates of unionization determine trade competitiveness, the United States should be close to the top. But it's not. While Canada has a healthy trade surplus, the United States has a huge trade deficit. Other highly unionized countries are also highly trade-competitive. For example, like Canada, Sweden is one of the most open economies in the world. Its rate of unionization is now more than 85 per cent of its labour force. And Sweden is highly competitive.

Contrary to popular perception, there is considerable evidence that unionized workplaces are often more competitive, more innovative and more productive. Unions also tend to produce other good effects. After controlling for the influence of education, experience and other factors, unionized workers in the United States enjoy an average 10 to 15 per cent higher level of wages than non-union workers. The union wage premium in Canada has been calculated to be even higher. Unions are also a major force for greater social equality. It's almost impossible to have decent health care, public pensions, public education and a host of other beneficial social policies without a strong labour movement. This is a key reason why the United States has consistently produced the highest level of economic inequality--including the highest poverty rate--among advanced industrial countries.

If union decline can't be explained on the grounds that work has been liberated or that unionized workplaces aren't competitive, let us look at another frequently heard explanation: people don't want to join unions.

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