Decline of Trade Union Membership in Australia: Antecedents and Consequences

This essay explores the decline of trade union membership in Australia since the 1980s, its antecedents, and consequences. It discusses factors that contributed to the growth and decline of unionism, including changes in laws, increased competition, structural changes, and rising inequality. The essay also examines the impact of declining union membership on the labor market and the future of work in Australia.

Running head: EMPLOYMENT RELATIONS
Employment Relations
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Introduction
The essay aims at providing an insight into the significant decline of the trade union
membership since the year 1980s, discusses their increasing irrelevance and the consequences
and antecedents of the decline of the trade union in the context of the Australian economy. While
exploring factors that contributed to the growth and the decline of unionism of industrial labor
in the Australian economy, it is found that the unionism emerged because of the support from the
working class and represented an unusual history of the economy. The implementation of the
systems related to compulsory arbitration during the twentieth century mediated the industrial
conflict and led to the reinforcement for unionism. The support for the unionism was at peak
during 1948 that faced a gradual decline with the disintegration of the working class due to the
structural changes in the economy. The dismantling of the arbitration after the year 1986
worsened the established pattern of this decline along with the growth of uncertainty in
employment and implementation of the various anti-union strategies. However, the twentieth
century saw the unions as an integral part of work life of most of the employees. Between the
years 1914 to 1990, there were two workers in every five workers who were the members of the
union and it acted as a dominant force in the industrial scene of Australia.
Discussion:
Antecedents of Trade Union Membership Decline

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Twenty years ago, close to 50 percent of the workers were the members of union. This
percentage has declined to about 23 percent in the present times (Randolph and Tice 2014). The
public sector also has lower representation of union members and strength. The era of
feminization, deunionisation, computerization and casualization represented the most significant
change brought about in the labor market. The decline of the union power has not only led to the
reduction of the strikes but also led to the prevention of the industrial disputes to the level of one
quarter in Australia. Decline of Trade Union membership became a popular pattern across the
developed world leaving aside Denmark, Sweden and Norway although the pattern has been
quite rapid in the Australian continent (Junankar 2014).
According to Leigh (2013), there exist two common explanations for the decline trade
union membership. The first reason for the decline was the skeptical nature of the workers
against them. The attitude of the workers represented as the mirror image of the union strength
that resulted in the swelling of the union membership during the 1970s. Moreover, the belief of
the Australian in thinking union membership possessing too much of power also declined
steadily. The second reason for the decline of trade union membership has been the decline of
the real wages. In this context, Peetz et al. (2015) pointed out that the decline in trade union
membership has been more since the 1980s with the biggest fall occurring during the 1990s.
As per Cregan (2013), it can be asserted that the decline in the trade union membership
boiled down to the four factors that included changes in the laws governing the unions, increased
competition in the product market, structural change and rising inequality of the labor market.
However, the significant factor in the decline of the trade union membership has been the
changes in the legal regimes that governed the unions. According to Bailey and Peetz (2014),
between the year 1990 and the 1995, the conservative governments in the five out of the six

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states implemented a legislation aimed to prohibit the compulsory unionism thereby encouraging
the norm for individual bargaining and ensuring easier transition towards the non-award
coverage. During the late 1980 s, over half of all the union members represented as union
member based on terms of employment. However, during the 1990s, they freed themselves from
such requirement of belonging that encouraged them in opting out (Kelly 2015). The unionism
that relied on the compulsory laws of the unionism hit the hardest. Further, the newly appointed
Howard government in Australia led to the compulsory abolition of the nationwide decline in the
membership of trade union.
According to Yates and Fairbrother (2013), the rising competition also represented a vital
driver in the decline of the trade union membership. The Australian economy spurred by the
tariff cuts, microeconomic reforms and the revitalization of the Australian competition and the
consumer commission have made the markets for buying the products and services increasingly
competitive in comparison to the markets of 1970s. Fairbrother and Griffin (2013) put forward
an insight that the inequality in earnings also led to the fall of the union density. For
understanding its effectiveness of its working, it is necessary for recognizing that the unions do
not only aim for the higher wages but also for the greater compression of the pay. This happens
via the pay schedules that are standardized and requests the same hike for all the workers. The
dispersion of lower wages within a company acts as easier means for organization of the unions
since in such cases the workers are more prone to get together for a common cause with the ones
who earn similar wages.
The final factor that results in the decline of the trade union membership represents the
structural change of the labor market (Hassel 2014). Across the developed countries, the unions
undertook the responsibility of recruitment in the public and the manufacturing sector. However,

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the downsizing of the government, rise of service sector, and workforce casualization along with
a rise of the smaller firms proved to be disadvantageous to the trade unions and ultimately their
decline.
Consequences of Trade Union Membership Decline
Looking in retrospect over past century, one can see the substantial role of the trade
unions in bigger transformation of the labor market that included virtually eliminating the child
labor and the increased participation of the women (Lavelle 2016). The presence of trade union
membership led to the higher earnings of the workers. Trade unions also acted as a protection
against the rising inequalities. The presence of trade unions also ensured certain advantages to
the employers through the creation of an ambience where firms had a stronger incentive for
training the workers. Trade unions also helped in the creation of building the bonds of reciprocity
and trust in workplace and creation of the social capital. Yet there has been a decline in the trade
union membership with the springing of other structures in replacing them. However, the
percentage of the work places with consultative joint committees doubled during the period
between the 1990 and 1995 along with a substantial growth of the employer-to-employer ad hoc
committees in the workplace. The decline of the membership of the trade unions saw the
employee needs looked after by the newer organizations in Australia. According to Schnabel
(2013), unions relegated them to the role of the nineteenth century as the friendlier societies that
aided in providing services like adult learning, insurance and legal advice.
The decline of the trade union membership, have made the labor market of Australia
more competitive in comparison the situation that prevailed in the 1970s. Thus, between the year
1997 and 2007, the rates of trade union membership fell across almost all the industries. In

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Australia, the membership rates of trade union declined from 36 to 11 percent in the finance and
insurance sector, from 60 to 28 percent in the communication services, from 24 to 14 percent in
the cultural and recreational services and from 10 to 5 percent in the business and property sector
Booth 2014). However, the water and gas supply relatively maintained higher membership rates.
In Australia, it is observed that the membership rates of the trade unions are comparatively
higher in blue-collar occupation that includes tradespersons, intermediate production and the
transport workers. The rate of membership is comparatively lower in the white-collar jobs of
higher skills such as the administrators, managers and the service workers. In this sector, there
has been a higher rate of unionization of the female employees compared to the males.
Figure: Rates of Unionisation Based on Occupation
Source: (Freeman, Doucouliagos and Laroche 2017)
The rates of Unionisation also varied as per conditions of employment. The rates of
decline of the trade union membership were high for the full-time employees and were close

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to 21 percent in the year 2007 compared to only 14 percent for the part time employees. The
decine was also high close to about 23 percent for the people with entitlements of the paid leaves
compared to only 7 percent for those without the entitlements of the paid leave (Cross and Gauja
2014). It is however highly impossible that any such changes will have a reversal. The decline in
the trade union membership has however slowed down a little signaling at the rebirth of the
Australian unions.
The secretary of Australian Council of Trade Union (ACTU) showed that in Australia
the rate of decline in the trade union membership in the privates sector has been close to the 11
percent according to the records of the last year. There has been a marked decline in the union
member between the year 2013 and 2014 with only 15 percent of the workers representing
union members (Williams and Lansky 2013). The figures also provided a proof that the people
who were members of the trade union in their full time job also declined to 15 percent as per the
records of 2014. Thus, the year 2014 portrayed that there existed only 1.6 million representatives
of trade unions. With the decline of the trade union membership, it became necessary for them to
discuss the future of the work and ultimately represent the workers. The members of the trade
unions usually look for ways on a day-to-day basis for representing the Australian workers. With
the modernization of the workplace, there also lies a need for transforming the trade unions. In
doing this, it is important to note that though change and progress is great thing for the
workplace but not undertaken at the cost of the safety, wages and the rights of the workers.
According to the chief executive of the Australia Chamber of Industry and Commerce, Kate
Carnell, the decline in the trade union membership created a bigger issue for the labor party
(Kelly 2015). As per her views, trade unions helped in wielding inconsistent influence in national
debate over issues including the free trade agreement of China and warned the workers on their

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thoughts regarding the misrepresentation of good money value against the union membership. As
per her views, the labor party in their public speaking indicated that the future of Australia is
determined the business of the Small and Medium Sized Enterprise (SME) sector. This sector
mostly controlled movement of the union who demands for a range of changes in the policy
necessary for the growth of the medium and small sized businesses and in changing the
workplace relations. With the decline of the Trade Union membership, the union funding for the
labor and dominance over the preselected contests implied their impact on the capacity of the
party in developing the relevant policies for ensuring the growth of Australia.
Conclusion:
To conclude, it can be said that in spite of the ascending decline rates of the trade unions,
they possess important inheritance. Australia is country that has stability of political institutions,
advanced economic society, commitment towards the democracy and an egalitarian culture. The
workers of Australia has adopted the legacy and via the unions tried to pass them on to the rest of
the Australian society. The Australian trade union acted as an economic and social movement
and played a vital role in determining the equal pay amongst all the employees. The
implementation of the structural change along with the institutional factors and strategies for the
new employees has resulted in the decline of the trade union membership.

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