There is was much crowing about Australia’s declining trade union membership rate yesterday after the ABS released new membership statistics:
Typical of the response was Liberal Party stalwart Kate Carnell at The Australian:
Australian Chamber of Commerce and Industry chief executive Kate Carnell toldThe Australian that declining union membership was a “huge issue” for the Labor Party.
She said unions wielded disproportionate influence in the national debate over issues like the China free trade agreement and warned that workers increasingly thought that union membership did not represent good value for money.“The Labor Party in their rhetoric indicates that business is really important for the future of Australia, particularly the SME sector. But at the same time, they are increasingly controlled by the union movement that opposes a whole range of changes in policy that the small to medium business community needs for growth, particularly changes in the workplace relations space,” she told The Australian.
I won’t dispute that the trade union movement often gets in the way of good policy, that they are sometimes corrupt and do not always engineer good workplace outcomes. But, if we are to be fair, we must also imagine for ourselves a world without trade unions. That would no doubt thrill Ms Carnell with her political leanings but I put it to readers that such an outcome would be bad for Australians.
Observe the chart:
The US is leading the developed world in the decline of unionism and what has also transpired hand-in-hand with that process has been the hollowing out of the US middle classes and the enormous rise in income inequality that is now holding back the entire US economy owing to a lack of demand. The de-industrialisation of the US has had a similar and related effect on unions as heavy industry requiring material labour input has migrated to the emerging market world.
Responsible for this was the libertarianism that arose in the post-1980s period (often associated with Randian acolyte Alan Greenspan). It was the doctrine of unfettered free movements of capital that mobilised emerging market labour while financialising economies at home. That is not to say that free trade is bad, it is not to the extent that it builds productivity in the global economy, but equally, over-specialisation has led to severe imbalances between and within nations that are also unsustainable.
Australia has done better than some nations in resisting these forces. Through the good fortune of the mining boom, and via some good egalitarian policy, income distribution has been kept more balanced. Regrettably some of this has been achieved by a succession of housing bubbles for which we will pay in the years ahead. And the same simplistic libertarian doctrine that has gutted the American heartland has more recently coloured the Australian Liberal Party. “The loon pond” as it has become known subscribes to a rather extreme view of ‘capital good’ versus ‘labour bad’, even if it also has a bad habit of protecting specific capital rather capital markets. Kate Carnell is a classic example.
Thankfully those forces have been marginalised with the rise of Malcolm Turnbull. I say thankfully because as Australia moves through its post-mining boom adjustment, which implicitly involves deflating wages to help repair competitiveness, if the process is handled badly then it will result in a sudden tilting of the income ledger away from households and towards some fortunate elite.
Australian trade unions have a role to play in this adjustment and in ensuring that Australia does not follow the US lead into a destroyed middle class. We should be thankful that labour still has a loud voice to defend wage income, notwithstanding the large flaws within specific unions. The Coalition should learn to appreciate it too lest it really does sell out the Aussie punter. A mature liberalism is big enough for it.
