Decline of Trade Union Membership in Australia: An Economic Analysis

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ESSAY ON DECLINE OF TRADE UNION
MEMBERSHIP IN AUSTRALIA

Introduction
According to the Australian Bureau of Statistics, there has been a huge decline in the
membership and density of the Trade Union in Australia. In 1976, the number of Union
members recorded according to the Australian Bureau of Statistics was 2.5 million which
gradually fall to 1.5 million in 2016. In the survey conducted in 2018, it is reported that 15% of
the total employees are members of the Trade Union in their fixed jobs. Chief Economist at the
ABS said that members who are a part of trade unions are likely to be over 40 years of age,
women or full-time workers (Gilfillan & McGann, 2018). The maximum numbers of workers
who are a part of trade unions come from Education and training centers along with other
public sector firms like Public Administrative and Safety, Electricity and Gas and so on. There
are many white-collar workers as part of Union more than blue-collar workers. There also have
been seen a steady decline in the Union density (share of union member of the total
employment) from 51% to a mere 14%. As it is apparent that there is a fall in the membership
of trade unions, it becomes significantly important to analyze the cause behind it. To combat
this issue, it is very necessary to understand what unions are for and why do workers join
unions and what are the major causes in Australia that led to this steady decline in the density
and membership of trade unions (Gilfillan & McGann, 2018).
Australian Unions were formed in the early nineteenth century because of the economic
growth and constricted labor market. The main objective of the union was to preserve the
interest of their members from the atrocities of employers and it was well-known from the time
that to counter the economic power of the employers, it is necessary for the workers to join
hands and the leaders of the union bargain on the behalf of the workers for their rights. The
primary function of the union is to fight for the maximization of wages and salaries of union
members. The major reason for the employees to join the union is discontent with the salaries
and other economic facets of the work, a wish to influence or face those facets of the job with
the assistance of union and also a belief and faith that benefits received by joining the union
are greater than the cost incurred.

With the benefits of trade union evident, what might be reasons for its decline, although there
are many reasons behind the fall of trade unions, some of the major reasons are discussed in
the essay?
Changing the composition of employment: Decline in the employment rate in heavy industries
like large scale car manufacturing, textile industry, footwear industry and also printing industry
has led to the reduction in the trade union membership. This can be simply said as the
reduction in the blue-collar jobs that once were a significant part of trade unions resulted in the
decline of trade union membership. Although the trade unions have tried to include white-
collar personnel and according to the recent survey by ABS, the professionals form a major part
of trade unions, but still the gap that was created by the reclusion of blue-collar personnel from
the unions (McAlpine & Roberts, 2017). This shouldn’t come as a surprise as service and
professional sectors have seen more employment than the labor sector in the past few years
because of economic restructuring as well as increased use of advanced technology and
robotics that has reduced blue-collar jobs. But the change in the workforce has resulted
adversely for the trade unions as only large government sector employees are a major part of
the union whereas part-time workers, private employees and members of the industry other
than educational sector and electricity and gas sector are not a part of trade unions (Hodder &
Kretsos, 2015). It can be said that the fall in the membership of union can be related to the
change in the structure of the workforce. There has been a major decline in the employment
level in the manufacturing and public sector industries that formed a significant part of
unionism and an increase in the employment rate in the private sector where union density was
lower than the public and manufacturing sector. With that been said, unions failed to attract
the private sector and other temporary job employees towards joining unions. In modern
Australia, many youths are engaged in part-time jobs because of their needs and other
requirements. So it can be said that workforce restructuring is one of the major causes of the
decline in the membership and density of trade unions (Hodder & Kretsos, 2015).

Figure 1: RISE AND FALL OF TRADE UNION MEMBERSHIP
Source: (Gilfillan & McGann, 2018)
Institutional factors: Industrial factors are all those legislative policies and strategies and other
legal changes that harmed the membership and density of trade unions. Political economic
changes and the influence of trade relationships and policies of other developed countries also
played a role in the decline of unionism. The Workplace Relations Act 1996 brought in by the
newly won national conservative parties who vow to change the power of unionism (Sinha,
Sinha & Shekhar, 2017). The act brought in new changes by limiting the traditional arbitration,
reducing the awards that were asked by trade unions from the employers as well as placing
new limitations and penalties on the industrial actions. New contracts, Australian Workplace
Agreements enabled employers to cross unions. AWA provided different awards to the
employees and hence, eliminated the need for unions. This withdrawal by the government to
recognize unions’ contributions and constantly suppressing collectivism with new strategies and
de-collectivization of employees led to the fall of union membership. These radical legislative
changes led to the fall of the density and membership of trade unions (Sinha, Sinha & Shekhar,
2017).

New Employer Strategies: According to Peetz, change in the employers’ strategies towards
responding to Australian unions is another reason for the fall of density in the unions. In
comparison to American union density, Australian union density might be lower but the effect t
that Australian unions have on the employers was much effective and efficient than the
American employers. Australian employers influenced by other developed countries became
more ruthless in their actions and more aggressively opposed unionism and supported anti-
union movements and unions made logically poor decisions as a result that led to the decline of
unionism in Australia. Unions became more concerned about retaining their jobs instead of
raising wages and other benefits. According to the survey conducted by Labour Council, it can
be seen that people still sympathize with unions but they have lost that faith that unions are
benefitting them (Sinha, Sinha & Shekhar, 2017).
Amongst the pool of causes, one of those can be socio-economic changes as well as the change
in the perception and behavior of millennials about the collectivism and necessity to be in the
unions. Millennials, unlike their previous generations, do not engage in the unions as well as
many employers are strictly against these unions nowadays and formed strict strategies to
counter them. Most of the members that are a part of unions now a day are above the age of
45. This itself shows how disinterested today's generation is towards the unions (Peetz, Price &
Bailey, 2015). Another major factor that can be seen is the increase in the service sector in
place of the manufacturing sector and also change in the structure and working of the
traditional manufacturing industry. The admittance of advanced technology and machinery in
the manufacturing sector and loss of workers has led to a huge impact on the membership and
density of the Australian union (Meyer, 2017).
In conclusion, it can be said that various reasons have led to the constant decline of trade union
membership as well as a decrease in the density of trade unions in Australia. These factors
came in place with the industrial revolution and change in the socio-economic policies in the
late 20th Century. The change in the political scenario in Australia along with the poor strategic
choices made by the unions has led to the fall of membership in the unions. One of the major
reason according to current scenario can be said the disinterest of new generation and

millennial in joining the union and inability of the union to convince people to join the
collectivism and also the inability to show the benefits that can be possibly received by the
people, if they join the union (Abbott, Mackinnon & Fallon, 2016). Another major cause that
came in light is the institutional change and change in the structure of the workforce. With the
increase in white-collar workers and a reduction in the blue-collar workers that formed a major
part in the membership of the union (Kelly, 2015). Unions still cannot make up for the loss of
blue-collar employees and its inability to attract private sector employment, as well as part-
time employees, also led to the decrease in the density of the trade unions. Lastly, structural
changes, institutional policies, governmental and legal strategies and change in the socio-
cultural norms, everything contributed to a fair share of the decline of union membership in
Australia (Abbott, Mackinnon & Fallon, 2016).

REFERENCES
Abbott, K., Mackinnon, B. H., & Fallon, P. (2016). Understanding employment relations. OUP
Catalogue.
Gilfillan, G., & McGann, C. (2018). Trends in union membership in Australia. Parliamentary
Library, Research Paper Series, 19.
Hodder, A., & Kretsos, L. (Eds.). (2015). Young workers and trade unions: A global view.
Springer.
Kelly, J. (2015). Trade union membership and power from a comparative perspective. The
Economic and Labour Relations Review, 26(4), 526-544.
McAlpine, K., & Roberts, S. (2017). The future of trade unions in Australia. Chris White Online.
Meyer, B. (2017). Financialization, technological change, and trade union decline. Socio-
Economic Review.
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Sinha, P. R. N., Sinha, I. B., & Shekhar, S. P. (2017). Industrial Relations, Trade Unions and
Labour Legislation. Pearson Education India.
Taylor, A. (2018). The trade unions and the Labour Party. Routledge.