Blog: The future of trade unions

Employee Relations

The future of trade unions

Traditional trade unions seem unable to play the vital and beneficent roles they once did. What brought about this decline and how can they be reinvented in a totally different form?
The future of trade unions

Until the early eighties, managers in general and personnel managers in particular periodically went through moments of tension and ignominy at the hands of their workmen and union leaders. By the end of the eighties, however, the frequency of violence started coming down and industry breathed a sigh of relief. Some Industrial Relations (IR) managers even claimed the major part of the credit for taming rampaging unions. They actually deserved as much credit as the crow landing on a palm tree as it falls.1

Of course, there continue to be sporadic incidents of violence and vandalism, especially when the precariat sees no other resort and I have analyzed these earlier.2 The spontaneity of the conflagrations, however, confirms the lack (rather than the resurgence) of trusted and strong union leaderships that can sit eyeball-to-eyeball with managements and resolve worker demands. It would, therefore, be a strange ‘‘shuturmurg’’ who cannot see the declining power and militancy of unions, not just in India, but around the world. 

The Twilight of the Titans 

In the Indian context, perhaps the longest-term trend cutting the ground out from under the feet of traditional unions is the growing proportion of the workforce with a distaste for unionization. The bulk of the workforce is expanding, sunrise industries like Information Technology and financial services considers it infra dig even to become union members, leave aside depending on collective bargaining for salary increases and benefits. Agitation in the traditional manner would be unthinkable (as well as unsafe) for them. Simultaneously, in traditional industries, not only are gains through productivity, work intensification3, automation, and progressively, Artificial Intelligence, reducing the number of people in categories most susceptible to being unionized but the profiles of the retained permanent positions demand higher qualifications. This pulls these remnants too into the middle-class, with the union antipathy that marks that territory. In sheer numbers, though, manufacturing sector unions have lost most membership in recent years due to the addiction to contractualization that’s swept through Indian industry.4 Several observers feel union leaderships made insufficient effort to prevent the loss of permanent jobs and even less to organize contract labor. The latter aloofness made short-term sense because it permitted these union leaders to deliver ever-higher gains, to far fewer remaining members, much more easily. Less charitable interpretations point to the personal interest some leaders had in the emergent contracts or to the better returns their talents could command in altogether different pursuits and enterprises. Thus demography, technology, contractualization, and paucity of organizing talent conspired to reduce the base of unionizable employees to the point that it could hardly prove a threat in any denial-of-work campaign.

This brings us to the decreasing ‘‘bite’’ of most unions. Of course, one still sees some country-wide stoppages (usually by public sector unions) but these are mainly symbolic. The days of back- (and balance sheet-) breaking stoppages seem to be in the past. Ironically, it was the gigantism of just this kind of showdowns, maximally exemplified by the Bombay Textile Strike of 1982-835, that led to disenchantment with reckless (as well as disunited) union leaders and the industry-destroying consequences of such tactics. The hundreds of thousands of workers whose lives were destroyed by the Textile Strike were tragic proof that such à l’outrance’’ conflicts extinguished worker existences first and the units they worked in next, with the industry itself a possible third. Owners usually got off lightly and many ended up better placed than before. Violent and bitter confrontations did continue for some years thereafter but in sheer scale (and, consequently, the sense of futility after failure) the Textile Strike touched a high-water mark. Coincidentally, at around the same time, on the opposite side of the globe as well, we were seeing "...a fundamental shift in the relationship between unions, employers, and the use of the strike. The strike has always been a gamble, but... during the 1980s the odds of success became much steeper... As a result, what was once labor’s most powerful and prominent weapon in wage and benefit negotiations has nearly vanished from the American economic landscape."

The loss of the strike as a credible threat was soon followed by another shattering blow to the united wall that unionized employees of a vertically integrated enterprise had been able to present. Prompted by the incessant demands of shareholders to raise returns and of customers to lower prices, organization after organization chose to target the total payout to the third leg of the primary stakeholder tripod – employees. In India, liberalization and the flood of imports that followed made any attempt to protect total employee costs appear life-threatening. Simultaneously, the unequivocal strategic advice from management gurus stressed core competencies, making integrated operations unfashionable if not untenable. And, finally, the strides taken by Information Technology made the housing of operations under one legal entity unnecessary for ensuring adequate quality and control. The inevitable outcome was the fissure of workplaces on an unprecedented scale. "Fissured employment fundamentally changes the boundaries of firms – whether through subcontracting, third-party management, or franchising. By shifting work from the lead company outward … the company transforms wage setting into a pricing problem. ...[T]his pushes wages down for workers in the businesses now providing services to the lead firm, while lowering the lead business’s direct costs. Fissuring results in redistribution away from workers and toward investors.’’7 More relevant to our ‘‘defanging’’ hypothesis, creating such a multiplicity of competing vending points made the damage caused by any one of them stopping (on account of industrial action or anything else) as inconsequential as a mosquito bite.

On the positive side, businesses became more proficient in dealing with employees. In the last few decades, some of the worst dictatorial and humiliating practices on the shop-floors of large Indian corporates receded and supervisors in these workplaces became far more understanding and respectful of their teams. But this also meant fewer grievances to provide continuing grist to the union mill. In any case, for the bulk of the workforce, instead of supervisors and IR officers finding ways to motivate employees, it was the procurement officer who extracted work via the contractor. Even worse for unions, several managements kept their SDDB (Sama, Dama, Danda, and Bheda) powder dry for occasions when they found unions becoming troublesome.

Another set of variables that reduced union clout was the Government, the political parties who determine its actions, and the bureaucrats who implement them. The primacy accorded to economic growth, globalization, and attracting investment as well as the declining ability of unions to make a political impact (this too is true worldwide8) tilted these supposedly neutral protagonists to the side of business. What helped ease of doing business brought dis-ease to union power. 

So, what’s the problem? Shouldn’t we HR/IR professionals be celebrating the decline of those who were often our nemeses and gave us headaches, ulcers, and worse? 

What good are unions for companies and employees?

When I posed this question to some of my HR friends, their unanimous answer was that they gained greatly from unions and mature union leaders. They explained unions brought at least five benefits to their organizations:

1) Stopping unfair or underhand practices: Especially if the malpractice or Quixotism emanated from the CEO or promoter, short of quitting, even independent directors or the CHRO were helpless to counter it. A strong union had no such constraints.

2) Providing a sounding board: Experienced union leaders provided invaluable advice on the practicality and efficacy of the policies the company was contemplating as also suggesting new ideas of their own.

3) Two-way channels of communication: Messages conveyed through their own leaders had unequaled heft for workers. Similarly, grassroot leaders could point out true pain points that surveys were unable to pinpoint in a clamor-field of pinching shoes.

4) Taking up for the underdog: For the same reason that a defendant needs a lawyer, regardless of how impartial a judge maybe, a worker in trouble was helped by a strong union, leaving HR to take a principled, neutral stance.

5) Funneling diverse employee needs into coherent demands: Without a union, it would have been impossible to sift through the huge volume and disparity of what people wanted and bring it to a manageable convergence. More importantly, granting benefits that were not demanded by employees would have made the entire process much costlier as well as irremediably patriarchal and, therefore, likely to backfire ultimately.

Unions served a greater social purpose as well. Over the decades when they were a force to reckon with, unions played a key role in limiting the differentials between the highest and lowest paid employees9, which helped keep an uncontrolled GINI from tearing society apart. There is an eye-opening (and watering) interactive graph about India in the World Inequality Database that shows how, soon after the de-weaponization of unions began in the eighties, the share of national income captured by the top one percent started increasing sharply and that reaching the bottom 50 percent started its decline.10 Unions also share the credit for keeping progression paths open for people at the Bottom of the Pyramid. As their grip weakened, intermediate staging posts were thoughtlessly eliminated by consultants who flattened everything apart from their fees.

Directly driven e-collectives

Whether we are sad or glad about it, toothed and clawed fighting unions are receding. What we need to think of now is whether they can be recreated without the characteristics that made many of them obnoxious to managements and unattractive even to potential members. The new vehicle that operates between management and employees need not be a formal union but, whatever form it takes, should permit confident, adult dialogue that leads to collaboration for mutual benefit. It should catalyze a movement toward self-organization among employees while generating truly situational and spontaneous leaders.

I believe such succor is at hand and it can be delivered only by a thoughtful deployment of social media. This method of reinvention will become increasingly potent as the millennials become the majority in the workforce. But don’t employees communicate with each other through platforms like WhatsApp and Facebook? The integrated platform proposed here far outstrips the capabilities of popularly used social media11 – which is not to say the technologies for it don’t exist, just that they haven’t been harnessed in a Next-gen union combination. An effective SMAUG (Social Media Aided Union Group – resemblances to any dragon, fictional or futuristic, are purely coincidental) would integrate the following features:

1) Attracting associates: The platform should be able to host curated content, convenient utilities, educative/interactive blogs, exciting dialogues and advertise material benefits (see 9, below) to attract people to visit and sign up.

2) Adjustable anonymity: Unlike the real identity demanded by most social media platforms (and the surveillance and personal information monetization12 which makes it feasible), SMAUG would leave employees free to keep their identities anonymous until they enter more closely circumscribed working groups. This would also go a long way to assuaging worries about retaliation by management in case they insert snooping stool pigeons in the general membership.

3) Information sharing: These wiki-type compendia would contain information that is normally inaccessible e.g. 'how-tos' for circumventing tedious processes and countering toxic managers.

4) Limited Groups for Planning Strategy: The manner of identifying core groups will vary situationally but emergent leaders are likely to be those who put a premium on connectivity and participation13 rather than charisma and autocracy (incidentally thereby also giving women a greater opportunity to occupy these slots).14 Leaders and strategists will need secure, limited-participation, video interaction platforms where they can dialogue face-to-face and agree on plans and projects.

5) Project Planning and Monitoring: Plans must lead to action which, both for reasons of geographic dispersion and anonymity, need to be delivered through virtual teams and project management software. SMAUG should, therefore, permit virtual team management and a Transactive Memory System.15

6) Integrating Demands & Common Grievances: In politics, where direct democracy is making a modest comeback, parties use "software that allows citizens to propose laws directly."16 Clearly the prospect is even more alluring with the smaller numbers in business organizations. SMAUG needs to be equipped with an algorithmic process to iteratively identify the most troublesome problems or the most desirable demands that need to be further refined or pushed with the management.  

7) Interaction With Management: One can also anticipate a situation where no individual wants to be identified as the one making demands to the management. SMAUG, therefore, needs to be able to provide an impersonal communication interface of the direct democracy convergences (mentioned in 6, above). The same interface, in the reverse direction, would be useful for sounding out employees, confidentially, on change initiatives or other proposals.

8) Fees and Finances: A payment gateway would be needed for any payments the collective wishes to get from associates. It should be accompanied by a transparent, real-time display of receipts, expenses, and investments.

9) Welfare: Managements are rapidly vacating the welfare terrain. Much goodwill can be picked up by the collective if it occupies the ceded ground under a 'self-help' banner. Choices are virtually limitless and could include credit societies, favorable deals for goods and services, cooperatives for family members to interact and earn as well as for children to showcase their talents and get recognized.

10) Retaliation: What possible use can a dragon be without teeth? I am not suggesting a return to the bad old days of industrial action which, in any case, would be unpalatable to the middle-class mentality of today’s employees. All the same, the collective needs to deliver (or threaten) counterpunches when there is no other recourse. Just the knowledge that the collective’s inside information can be leaked to the public/regulators, that quality and productivity are in the hands of employees who also have the competence to create cyber picket lines, can be a huge deterrent to SDDB attacks.

SMAUG can be a win-win-win development for corporates, their employees, and unions. Does this mean the day of the large national unions is over? Assuredly not. But they need to reinvent themselves for the people-empowered and tech-driven 21st century. There is no reason a platform of the kind described cannot be commissioned by the larger unions as part of their USP. Apart from saving individual employee collectives from having to incur development costs, it would also save the latter from criminal or civil prosecution, should some short-sighted managements choose to victimize associates. These unions could also deploy the strategic, legal, and other capabilities (say, in the running of cooperatives) that they have developed over the years instead of allowing these to atrophy as they are in danger of doing. If the consequent occupation of the back seat causes anguish at losing the steering wheel, they need to remind themselves that, without such a re-cast, they risk being pushed out of the vehicle altogether. 

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Notes:

  1. Maurice Bloomfield, The Fable of the Crow and the Palm-Tree: A Psychic Motif in Hindu Fiction, The American Journal of Philology , 1919, Vol. 40, No. 1.
  2. Visty Banaji, Employee Relations: The Hamartia of Human Resource Professionals in India, NHRD Network Journal, ‘Volume 4, Issue1, January 2011.
  3. Kim Moody, On New Terrain: How Capital is Reshaping the Battleground of Class War, Haymarket Books, 2017.
  4. Visty Banaji, Udta Udyog – Industry’s addiction to contract workers, 15 September 2016.
  5. Rajni Bakshi, The Long Haul: The Bombay Textile Workers Strike of 1982-83, BUILD Documentation Collective, 1986.
  6. Jake Rosenfeld, What Unions No Longer Do, Harvard University Press, 2014.
  7. David Weil, The Fissured Workplace – Why Work Became So Bad for So Many and What Can Be Done to Improve It, Harvard University Press, 2017.
  8. Roland Erne and Markus Blaser, Direct democracy and trade union action, Transfer: European Review of Labor and Research, April 2018.
  9. Visty Banaji, But who will guard the guardians?, 14 March 2018.
  10. World Inequality Database
  11. Andreas M. Kaplan and Michael Haenlein, Users of the world, unite! The challenges and opportunities of Social Media, Business Horizons, 53, 59-68, 2010.
  12. Lina Dencik and Oliver Leistert (Editors), Critical Perspectives on Social Media and Protest: Between Control and Emancipation, Rowman & Littlefield International, 2015.
  13. Thomas Poell and José van Dijck, Social Media and new protest movements, in 'The SAGE Handbook of Social Media', Sage, 2018.
  14. Jean Lipman-Blumen, Connective Leadership: What Business Needs to Learn from Academe, Change The Magazine of Higher Learning, 30(1):49-53. January 1998. 
  15. Hritik Gupta, Social media usage and its effect on virtual team dynamics: a Transactive Memory System approach, A thesis submitted to the University of Canterbury in fulfilment of the requirements for the degree of Doctor of Philosophy, 2015.
  16. Nathan Gardels, It’s time to rethink democracy, Washington Post, 23 March 2018.
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Topics: Employee Relations, Strategic HR

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