The gig economy has got us talking about the labour market, but the decline in trade union membership matters more.
Sometimes change comes suddenly and without warning, in big bold type on the front pages. But, often, the changes that really matter never make it to the headlines. Take the large falls in global poverty over the past few decades, or the slow ageing of the UK population – I’d hazard a guess that neither of these trends has ever topped the 10 o’clock news.
There are five million fewer trade union members today than there were in 1979.
One place where this story – of exciting changes overshadowing long-run trends – is true today is in the current debates around the state of the UK’s labour market. ‘New’ forms of work are the star of the show, with column inches and reports being churned out by the week on the rise of the gig economy. But, stepping back, although it may have sparked a lot of debate, it’s clear that this type of work is still a very small proportion of the total, and it is not fundamentally reshaping work in the UK.
Instead, there are bigger evolutions that have taken place in our labour market which are of relevance to many more people. One such change is the slow decline in union membership rates over the past 40 years. Trade union membership has fallen by almost half since the late 1970s while the number of people in work has risen by a quarter. There are five million fewer trade union members today than there were in 1979; in 2015 just 22% of those in employment were signed-up.
Membership is also increasingly concentrated among older workers in mid-to-high paying jobs in the public sector. Less than 1 in 10 of those in the lowest paid roles in the private sector is a trade union member. Unions are at their weakest where they are needed most.
The decline of trade unions
Why has this happened? Well, the reasons are many and complex. Large scale industrial change has played a significant part; the decline of jobs in the union-heavy manufacturing sector and the rise of service sector employment has been crucial. There are other relevant factors too, including the rise of smaller employers, increasingly fissured workplaces (due to contracting out and sub-contracting), aggressively anti-union legislation, and deep cuts to spending on public services.
Changes in social attitudes also matter: according to research from Ipsos MORI, the millennials – those born between 1980 and 2000 – are far less supportive of collective welfare institutions than previous generations. It may well be that this perspective has rubbed off on their views of unions; those in younger generations have shown themselves to be less likely to join trade unions than those in generations that have gone before.
We are on course for the worst decade for wage growth in the last 210 years, yet the pay squeeze hasn’t led to big questions about how declining union power has influenced our labour market.
Whatever the cause of the decline in union strength, we shouldn’t think that it doesn’t matter just because it’s not front page news. That UK unemployment is at a near 40-year low, and yet real wages are set to start falling again in the coming months, is something that surely must be linked to the weakness of organised labour in the UK. As must the fact that pay growth has been so weak for so long in the UK. This weakness is tied to our unenviably poor productivity performance since 2008, but the link between pay and productivity isn’t just a one way street. Low productivity growth leads to low wage growth – but if other trends (such as weaker unions) are keeping a lid on wage rises then this will impact productivity too.
We are on course for the worst decade for wage growth in the last 210 years, yet the pay squeeze hasn’t led to big questions about how declining union power has influenced our labour market. Thankfully, though, something else has: the gig economy. It may be still be in its infancy, but it has provided a prism through which new debates about the quality of work in the UK – and the power that workers have to improve it – are taking place.
Questions like ‘is flexible work possible without insecurity?’, ‘what routes are there for workers to organise for better pay or conditions?’, and ‘how is technology used by management to control workers?’ aren’t new – but they have taken on a new relevance of late.
Policy makers will hopefully begin to provide new answers to these questions later this year after the independent review of employment practices in the modern economy (the Taylor Review) has reported its findings. But, direct policy change on its own won’t be enough. Unions, tech innovators, and others with an interest in finding ways to secure a better deal for workers can take action too.
Technology: part problem, part solution
One area that we have been focusing on at the Resolution Trust is the use of technology in work. The trend is towards businesses deploying technology to reduce their workforce obligations, increase control, or transfer risk. But it doesn’t have to be like this. If technology can be used to pull workers apart, surely it can also be used to bring them back together again?
If technology can be used to pull workers apart, surely it can also be used to bring them back together again?
By no means are we arguing that innovative use of technology is going to be the solution to all the union movement’s problems. But we do think that this is an area on which progress can be made today. In other areas, for example the impact of anti-trade union legislation on the ability of unions to organise, the prospects for change in the near future are limited.
In contrast, there already are promising signs – which we have outlined in more detail in a recent publication – that technology can be used in a pro-labour fashion. One example of this is coworker.org, a labour advocacy and petitioning website that enables and supports campaigns on any workplace-related issue. In the past year alone the site has been an important part of a number of victories for US workers, from increased provision of paid parental leave at Netflix to relaxations of the dress code policy at a US fast food chain. It’s built up a significant reach too – 1 in 10 of all Starbucks employees have registered with the website – and it is now finding new ways to build campaign teams and connect workers with unions.
But in the UK today there is still distinct lack of a place for these sorts of ideas to get off the ground. Innovative pro-labour ideas often struggle to get heard, never mind to get funded or adopted. The links between groups thinking about how tech is transforming work, those interested in advocating for workers, and sources of social investment for new civic organisations are few and far between. All of which means there is no recognised home of incubation, no shared space to develop pro-labour ideas and few sources of funding. For a country that is generally rich in social innovation the lack of any infrastructure aimed at encouraging new ways of improving working life is striking and needs to be rectified.
At the Resolution Trust we are starting to play our part in turning this around. We have recently launched the WorkerTech programme in partnership with Bethnal Green Ventures. The programme seeks to find and back start-ups with great ideas about how technology can be used for good in the world of work. We’ve backed one start-up in our first cohort, a platform to facilitate campaigns for improved parental leave policies, and applications for the second cohort will open within the next month.
This programme isn’t going to change the world by itself, but it’s a start and we hope that more initiatives in the same space will follow. And that workers, trade unionists, tech innovators and policy makers alike will start to take more seriously the challenge of how workers throughout the economy can be supported in the twenty-first century. Efforts to reverse declines in worker power might never make the headlines, but they matters a great deal.