Union membership in Australia hits a new low of 12.5% - but it can be turned around

Just before Christmas, the ABS released its latest data on trade union membership.

Not really festive reading for Australian union leaders: the data showed a further fall in union density over the last 2 years, from 14.3% in 2020 to a new low of 12.5% in 2022.

This takes in the pandemic years, refuting early speculation that unions were seeing a bump in membership in response to the harsh effects of COVID-19 in Australian workplaces.

In the last week I’ve talked to Angus Thompson at The Age / Sydney Morning Herald about what unions can do to reverse the downward slide in membership, and the related problem of tackling non-member ‘free-riding’ on union-negotiated collective agreements.

Edited versions of the comments I sent to Angus in response to his questions are set out below. This includes some rethinking I’ve been doing about the conclusions in my 2021 book on The Future of Unions and Worker Representation, in light of the bad news from the ABS and the growing gap between workers’ wages and rampant inflation. I also consider whether the Labor Government’s new laws supporting multi-employer bargaining can help unions recover.  

How does Australia’s union movement claw its density back from a record low of 12.5%? What factors will be most influential?

Let’s start by assessing the scale of the problem. The overall drop in membership density to 12.5% is a concern, but even more worrying for unions is that membership has dropped further among young workers (only 2% of 15-19 year olds are union members, and 5% of those who are 20-24). In my book on The Future of Unions, I argued that the union movement’s main prospect of recovery lies in attracting young people to join.

They should do this by completely revisiting what a union looks like (including through technology) to become more attractive to young workers. The United Workers Union tried this through its Hospo Voice project over 5 years until it was wrapped up last year. This was the concept of a digital union, which had some success in contesting wage theft and sexual harassment in hospitality workplaces, but couldn’t make the transition to becoming an ongoing union vehicle for improving workers’ wages and conditions through collective bargaining.

Beyond digital experiments, the make-up of a union’s staff should also be reconsidered with young workers in mind. Are there enough young, diverse, energetic officials and activists that potential recruits can relate to? Is there a range of options for becoming a member or forming a relationship with the union short of full membership, reflecting the high concentration of young people in temporary or insecure work? Union leaders have to ask themselves these questions because (as Moore and Walton put it) if young workers do not find ‘a responsive, innovative, socially aware organisation’ in a union, ‘ they will look elsewhere’ or start their own network.

I also argued in the book that technology is a necessary tool for unions to rebuild collective strength, but not an end in itself. It has to be combined with the hard work of traditional organising. The UWU is doing this more effectively in the casinos segment of the hospitality sector, and in the even tougher terrain of farms and the fresh food supply chain where they engaged in successful recruitment and bargaining campaigns in 2022. Others like the Transport Workers Union have dedicated significant resources to organising in road transport and logistics, winning good outcomes for workers at FedEx and even Amazon Flex.

It’s the pursuit – and securing – of real improvements in workers’ pay and other conditions that will convince workers of the benefits of union membership. The need to successfully deliver on this core union function through leadership that inspires workers to have the confidence to take risks (especially, industrial action) was probably under-emphasised in my book’s conclusions about how unions can recover.

Multi-employer bargaining has been designed to create greater opportunities for unions to interface with workers (and thereby help boost membership), but won’t the initial success of the reforms be impeded by the lack of resources that comes with low membership? 

I also tackle in the book the difficult question of the role of labour law in reversing union membership decline. The simple answer is: until the Labor Government’s amending legislation passed late last year, our labour laws have made it very difficult for unions to recruit, organise, bargain and strike – so the changes to those laws will make those tasks easier for unions, but (like technology) won’t fix all of the problems unions face.

The multi-employer bargaining reforms were necessary, especially to give low-paid care sector workers (mostly women) a fairer chance of obtaining real wage increases. The UWU covers a lot of those workers, along with the Health Services Union, Australian Nursing and Midwifery Federation, and Australian Services Union – they can all now bring applications to the Fair Work Commission to utilise the new Supported Bargaining stream, and get government funding bodies around the negotiating table to work out fair remuneration for aged care, disability care and child care workers.

The other avenue made available by the reforms is the Single Interest Bargaining stream. This will mostly be about bargaining in the private sector, where the new provisions offer some ability for unions to bargain across multiple employers including in franchised business structures, contracting chains and some situations where work has been outsourced. But this where the point of your question is spot on: the effectiveness of this stream will depend a lot on how effectively unions incorporate the new bargaining options into their organising and bargaining campaigns. They will need to identify the business contexts where the provisions have most chance of gaining FWC approval to utilise them, and dedicate resources to countering the inevitable legal challenges that employers will bring to counter these new options.

The connection between the more favourable bargaining laws that unions now have available, and increasing membership, will take some years to have effect. Whether it occurs at all will depend on whether unions are able to demonstrate to workers that they’ve utilised the new laws to obtain appreciable gains in wages and conditions.

Will low membership inform the policies and trajectory of the union movement in 2023? 

It definitely has to be at the core of union strategies in 2023 and in the years ahead. The worst thing Australian union leaders can do is deny there is an existential crisis right in front of them, or think that the legislative changes will do the job for them. I often see reports (mainly in the USA, from public opinion polling) that popular support for unions “has never been so high”. This is a deluded approach to the problem of membership decline – the figures that really matter are whether workers actually join unions, not whether they think unions are tolerable or generally a good thing.

I also argue in my book for a more combative form of unionism than we have seen in the last 20-30 years. In the UK at present, there have been weeks of widespread industrial action impacting public services (including health care and public transport) aimed at winning wage increases to keep pace with inflation. The time is right in Australia for unions to push the boundaries of the public’s tolerance for strikes. This is portrayed by right-wing politicians and much of the media as unionists acting ‘selfishly’ or ‘against the national interest’. No, it is workers engaging in the right to exercise collective power, a human right guaranteed by international law. Unions that have the courage to challenge the neoliberal narrative that dominates our public discourse have the best shot at attracting workers to join them.

What about recent calls from union leaders for non-members to have to pay a fee of some kind where they are benefiting from a union-negotiated enterprise agreement? How important is that issue in the context of falling union membership levels?

It’s certainly unhelpful for union efforts to attract new members that so many employees can access one of the main benefits of union membership – higher wages and better working conditions – without having to join the union.

This is what I wrote on the issue in The Future of Unions:

A final matter, which can only be considered briefly here, is the ‘free-rider’ problem. In each of the four countries, collective agreements negotiated by unions apply to all workers in the relevant bargaining unit. This includes non-members, who thereby obtain the benefits of union organisation at the workplace for free. Further, the laws of each nation limit or prohibit unions imposing ‘ agency’, ‘fair share’ or ‘bargaining services’ fees on non-unionists to overcome free-riding. In Italy, such an arrangement would likely fall foul of Article 15 of the Workers’ Statute, which protects workers’ rights to freedom of and from association.

Australian law bans unions from making a claim for a ‘bargaining services fee’ (and precludes a provision for the imposition of such a fee from being included in an enterprise agreement). UK law does not include such an explicit prohibition, but does protect a non-union worker against detriment from an employer to enforce a requirement that the worker make some form of payment (such as a deduction from remuneration). In the US, agreements between unions and employers for the imposition of fair share or agency fees on non-unionists are prohibited in the 27 states that have enacted ‘right to work’ laws and in the public sector nationally.

Overturning these various restrictions and prohibitions would recognise that the benefits won by unions through collective bargaining ‘have the character of public goods’. Unions should be able to prevent non-members from obtaining those benefits without paying for them. Offering workers a choice between union membership and paying an agency or fair share fee would ensure unions meet the transaction costs of collective bargaining and build collective strength in workplaces (as workers would have less incentive to opt out of union membership).

The provisions in the Fair Work Act prohibiting bargaining or agency fees in agreements were introduced by the Howard Coalition Government, and kept by the last Labor Government (Rudd/Gillard). There is no sound reason for preventing unions and workers from being able to seek to have such clauses included in enterprise agreements. The so-called freedom of association arguments against it don’t stack up – no employee would be forced to join a union if there was such a clause in their enterprise agreement, they could choose either to join or pay the fee for services they obtain from having a union-negotiated agreement.

So my answer is: free-riding is definitely a problem that needs to be addressed by the Albanese Government through legislative change this year. Removing the prohibition on bargaining services fees would mean that, if a union could negotiate the inclusion of such a clause in an EA (which is by no means certain and will vary from one workplace to the next), it will be able to recover some of the resources expended on bargaining campaigns.

But that is just one side of the (membership) coin: the fundamental challenge of making union membership more attractive to more people will remain.