How Unions Can Survive the Digital Age

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May 18, 2020

Trade unions have largely been portrayed as a negative influence in the digital age, especially, with the encroachment of AI-driven entities in the workplace that is leading to a diminishing need for conventional job performers.  This has also created headaches for regulators keeping pace with the evolving corporate landscape.  The burden is also being felt by politicians who are increasingly feeling trapped between placating the affected workforce and the ‘economic imperative’ to provide incentives for boosting business activities.  Additionally, careers in a digital economy are significantly changing the psychological contract as it shifts from being blindly based on faith to validated trust.

This article takes a peek into the historical reasons for the formation of trade unions in the nineteenth century and their persistence throughout the twentieth century within some of the key developed countries.

Unions in the U.S.

In the U.S., the seeds of unionism were sown after the strengthening of trade routes between north and south, which brought increased competition.  One of the impacts was the division of labor, e.g., a cordwainer no longer made the whole shoe.  This prompted the journeymen, in reaction to the threat to their long-standing independence, good living conditions, and status, to form the first trade unions as the economy moved from mercantile capitalism to industrialism.  These were originally organized in the 1790s, and the labor movement was born in 1827.  Therefore, it can be said that the labor movement in the U.S. was in rebellion to the rising industrialism. However, this was followed by the workmen rallying behind socio-economic freedom platforms, e.g., espousing the abolition of imprisonment for debt, universal free education, a mechanism lieu law (making wages the employer’s first obligation in case of bankruptcy), the abolition of child labor, land reforms, etc.

One of the major factors in the persistence of trade unions during the early part of the twentieth century in the U.S. was the support of the political government as President Franklin D. Roosevelt embarked upon The New Deal that promised recovery from The Great Depression.  Another factor was the strong union leadership that arose from the platform of the Congress for Industrial Organization (CIO) and the American Federation for Labor (AFL) and was able to secure concessions from major industrial concerns.  This was further supported by World War II, which boosted industrial growth and built a strong economy reflecting low unemployment rates with wages that sustained good living standards and promoted ideals of the American Dream.

One unfortunate factor that also contributed to the entrenchment of unions and became a major contributor to their negative image was the infiltration of the mobsters within their ranks during the earlier and middle part of the twentieth century, especially in the shipping and the construction industries.  Their strong-arm tactics were frequently displayed in the form of violent industrial actions and increased politicization of unions.  This diluted their ideal goal of being a true representative of the workers.

More recently, some unions have been able to stand their ground on the basis of patriotism, unity of their members, and the financial muscle to prolong a strike, e.g., United Auto Workers (UAW) reached a deal with General Motors (GM) after six weeks of stoppage.

Unions in the U.K.

In the U.K., trade unions formally emerged in the nineteenth century in response to oppressive conditions that dominated the industrial environment, with almost no legal protection for the workers. This was generally characterized by the master-slave relationship and immortalized in books like ‘Oliver Twist’ by Charles Dickens.

The pioneers of the trade union movement were not the trade clubs of the town artisans, but the extensive combinations of the West of England woolen-workers and the midland framework knitters.  These attempts to voice grievances at a collective level were met with fierce resistance by apprehensive employers and an unsympathetic government that saw trade unionists as rebels and revolutionists.

However, things began to change in the latter half of the nineteenth century as leaders like Robert Applegarth rose to prominence in their endeavors to win a recognized social and political status for the trade unions.  Another interesting factor that led to the geographical spread of Trade Unions was the growth of the Railways throughout the first half of the nineteenth century, culminating in the formation of the Amalgamated Society of Engineers (ASE) in 1851.

The cause of Trade Unions in Britain was further bolstered by sympathetic legislation such as The Trade Union Act (1913).  Trade Unions also benefited in the middle of the twentieth century from Harold Wilson’s Labor government, e.g., through the Redundancy Payment Act (1965) and the Equal Pay Act (1970).  However, the respective trend was reversed in the 1980s with claims of greater productivity based upon enhanced power of management through the combination of anti-union legislation, greater product-market competition, and higher unemployment.  Consequently, the membership declined sharply throughout the 1980s and 1990s.

Recently, the Conservative government passed a new Trade Union Act, which proposes stricter ballot thresholds for industrial action, further restraints on picketing, and a requirement that union members’ contributions to political funds would only be via an opt-in.

Unions in Australia

It has been said that the history of the Australian people was a struggle between the organized rich and the organized poor.  Trade unions in Australia surfaced as early as the 1850s; however, their continuance was challenged by the gold discoveries, which greatly disturbed the industrial conditions.

The mid-nineteenth century period witnessed unions rallying around the principal object of eight hour day.  Their cause was greatly helped by favorable economic conditions that saw a combination of falling prices and rising wages.  This was complemented by the realization of the benefits that could be derived from combined action, which led to the formation of the South Australian Typographical Association and the Shipwrights.

Another interesting phenomenon that gave rise to unions in Australia was the perceived threat of Chinese workers dominating the labor market that ultimately led to regressive legislation against such influx and more protection for the local workforce.

The cause of trade unionism was further boosted by the Compulsory Arbitration Act (1901), which was the first legislation that encouraged trade unionism and collective bargaining by providing that only organized bodies of employers or employees could approach the court.

Another key factor was the farsightedness of prominent statesmen and judiciary members like Mr. Justice Higgins, famous for the ‘Harvester Judgment,’ who gave several landmark rulings in favor of conciliation with arbitration as the preferred option to resolve differences between the employers and the trade unions.

The birth of the Australian Council of Trade Unions (ACTU), formed by revolutionaries and laborites in 1927, was also a key factor in providing a joint forum for addressing concerns from multiple industries.  However, their initiatives were frequently diluted by internal fragmentation and fierce resistance from the employer associations who successfully lobbied the government to protect their interests on several occasions.  This was often countered by aggressive industrial actions and the use of militant tactics by the left faction within ACTU.  Things began to change in the seventies with the arrival of the New Right, who were more willing to experiment with trade union policy and organization, including the development of worker-participation policies.

Additionally, the accord between the ACTU and the ALP, and the election of a Federal Labor Government in 1983 facilitated significant legislative changes, e.g., maternity leave, occupational superannuation, etc.  Subsequent governments have tried to create a balance between the rights accorded to employers and the protections provided to trade union members.  This has resulted in Work Choices in 2005, the Fair Work Act in 2009, and Modern Awards in 2010.  In 2014, new anti-bullying provisions gave extended powers for the Fair Work Commission to deal with bullying.  However, both sides continue to have issues with the way legislation is formulated, applied, and adjudicated.

Moving forward

The resilience of unions to survive turbulent times is clearly evident from the aforementioned country-specific examples.  They will always have a justification for their existence as long as there are oppressed and exploited workforces yearning for a common forum to voice their legitimate rights.  Following are some of the questions that can be explored to realize the viability of trade unions in the digital age:

  1. Is collective bargaining more prudent and feasible for skilled labor than individual negotiations?
  2. Can trade union leaders be one of the key drivers of organizational imperatives for staying competitive and relevant?
  3. Can trade unions be an effective conduit for optimally partnering AI-driven technology with suitably skilled humans?
  4. Do trade unions have a credible voice in developing/improving products and services?
  5. Do the labor laws/regulations provide balanced relief for the rights of key stakeholders?
  6. Can unions be leveraged to institutionalize effective Diversity & Inclusion (D&I) initiatives?
  7. Are trade union leaders open to teaming up with senior management in trying to minimize rightsizing/obsolescence through appropriate measures, e.g., re-skilling, adjusting work schedules, revising/delaying financial/non-financial benefits/incentives, facilitating business development measures, boosting agile transformation initiatives, utilizing professional networks to secure alternative employment opportunities for excess workers, accommodating judicious severance packages, etc.?
  8. Can multiple trade unions within an organization co-exist synergistically under a robust and binding operational framework?

Successful strategies for projecting their relevance include the ability to anticipate significant changes in the workplace, articulating and formulating viable alternatives to resolving imbalances in employment relationships, meaningful participation in the improvement of work, embodying flexibility to buffer against market uncertainties, etc.  Such attributes will prevent actions by distraught unions and workers within organizations racing to embrace the benefits of Artificial Intelligence (AI) or hybrid lifeforms.  It will take profound foresight, empathetic accommodation, and astute measures on both sides to enable coexistence in the digital age.  Are you ready to engage accordingly?