How can unions create the conditions to deliver?
David Arnold, Senior Fellow Innovation and Change / 17 January 2018
Trade unions have a role to play across all of the labour market, but its in low paid parts of the private sector, including retail, wholesale, hospitality and parts of the gig economy, where they could potentially make the most difference - and in doing so demonstrate their enduring value as effective institutions at stamping out exploitation and inefficiency in our economy. Unfortunately this part of the labour market is where unions today, with their legacy membership and organisation concentrated in the public sector, transport and utilities, are weakest.
In the past some have suggested that union reform should concentrate instead on the free loaders in workplaces and sectors in which unions already have some presence and collective bargaining coverage and build outwards from there. But the pace of change in the labour market and the continued rate of decline in membership mean that this approach cannot be the only answer. So, could a focus on the low paid/sparsely organised be an alternative start point for recovery? Indeed it could. Whilst championing the low paid does represent some real challenges, these are not insurmountable. Indeed, if unions can see such an approach as an investment, commit to pooling some resources and be prepared to create conditions for innovation, including learning from examples such as the Workers Lab in the US, they could make a real difference in a relatively short space of time.
Challenges facing today’s low paid workers
The NLW is clearly providing a major boost to the low paid. Since its introduction in 2016 the NLW has resulted in the biggest decrease in low pay since 1970s. By 2020 3.7m will be beneficiaries, many of them women and part time workers.
However significant problems remain. Nearly a quarter (23 per cent) of all employees are stuck below the needs based Real Living Wage and 4.3 million people will still be earning less than two thirds of the median when the NLW is fully rolled out in 2020.
Added to this there are growing problems around pay differentials, with an increasing number who previously earned just above the NMW/NLW finding themselves on the wage floor with few opportunities for progression. In wholesale and retail it is estimated that one in four will be on the wage floor in 2020, whereas in hospitality it will be two in five.
What’s more insecurity and workplace pressures felt by employees right across the labour market are likely to impact just as much, if not more, on the low paid. These pressures include unreasonable workloads, too few or too many hours, lack of control, insecurity, the ‘one-way flexibility’ associated with ‘gig’ working, being subject to disrespectful behaviour, unfair criticism, being expected to do work below one’s level of competence and being ignored.
Not only are the challenges outlined here fertile ground on which trade unions should be able to construct convincing propositions to prospective members that answer the ‘what can you do for me’ question. They also point to the limits of policy interventions, which by their nature, tend to be one size fits all that risk creating new challenges in their wake. As such, effective trade union organisation in low paid workplaces should be seen as the missing link in the chain, increasing, for example, the chances that the NLW can be the first rung on the ladder, part of a fairly negotiated job and pay structure – rather than a generator of wage compression and frustrated aspiration at the lower end of the labour market.
Investing in the future
To make progress we should think of organising the low paid as a long-term investment in the future of the movement, as well as seeing it on its merits as a moral cause. A key factor that should help to make the case for such an approach is that the sectors with the largest number of low paid workers are also the sectors that are growing in terms of their overall share of employment and the areas in which unions are currently strongest are becoming less significant in terms of employment share. As such, if unions want to grow and bolster their credentials as organisations that speak for all workers, it makes sense to move more decisively into parts of the economy that are largest and expanding.
Retail and wholesale and accommodation and food service activities combined now account for more than one in four of all workers. But in retail and wholesale only one in ten is a union member. In accommodation and food services only just over one in fifty is a union member. And whereas more than one in three people working in transport and utilities is a union member, less than one in ten work in these sectors combined.
Organising for cross sector solidarity
In this context, a space is urgently needed in which to think through organisational models that will enable the movement to both direct organisational resources to low pay sectors and create an income stream to promote innovation in the more difficult parts of the labour market. Its crucial that the TUC lead this work and that every effort is put into engaging all unions.
A practical starting point should involve unions from different sectors exploring pilot partnerships in order to focus resources where they are needed. A further step would be to create an innovation fund, specifically aimed at supporting new initiatives, start-ups and micro unions in the gig economy, including organisations such as the IWGB. This could be modelled on the Workers Lab in the US, which has been established to experiment with and promote different models and organising strategies that can boost power and pay in those parts of the labour market that are difficult for the established unions to operate in.
At the current time the TUC’s development fund has an income of £3m. Many of the projects that this fund supports are extremely valuable, including their reaching out to younger workers initiative. This could be augmented with a similar sized innovation fund, specifically aimed at supporting new organising ideas in those parts of the economy where our current unions struggle. This could be administered by the TUC, and paid for initially from a levy on businesses.
David Arnold has written for A New Collectivism, an edited collection published today by the Changing Work Centre: a joint initative from the Fabian Society and Community union