Why the unions should leave Labor

Unions should leave the ALP and reconnect with their base. Instead at last week's ACTU Congress, we saw the union movement vowing to set up a multi-million dollar campaign fund to fight the federal Coalition and business groups and introduce a Buffett-style millionaires' tax. Unions want to recapture the momentum they had from the 2007 election campaign. They're wasting their time and resources.

Union membership is now at a record low, industrial action is routinely condemned in the media and by business as illegitimate and blue collar workers have become increasingly "aspirational”, working as contractors, investing in the share market and buying rental property. The HSU debacle, where low-paid and loyal members were fleeced by union leaders, has raised questions about union governance.

The real problem is that the unions are still joined at the hip to the Gillard government. And the foreshadowed multi-million dollar campaign is unlikely to deliver results because the relationship has changed.

How so? Think about it – the relationship was based on an exchange: unions would fund the ALP and provide campaign resources and in return, the Labor government would protect jobs, working conditions and union power. That exchange has weakened considerably, some might say it no longer exists. There was a certain irony at the ACTU Congress when former Prime Minister Bob Hawke did the karaoke and led unionists into a chorus of Solidarity Forever. He was the one who smashed the Australian Federation of Air Pilots during the 1989 pilots' dispute, famously declaring pilots to be "glorified bus drivers". So much for Labor solidarity. Unions will probably struggle to raise funds from members who could feel they're getting nothing in return. More to the point, the political campaign won't attract more union members.

The union movement needs to reconsider those links and break away to revitalise.

At the same time, the union movement's once familiar battle ground has been taken over by the Occupy movement, which is now managing the battle against big business. Unions have failed to capture the anti-capitalist sentiment of the Occupy movement which, unlike the union movement, crosses political lines and has deeper community connections. There is a limit to how much union leaders will fight 'the one per cent' because they depend on the one per cent for work, membership and the industry superannuation cash cow. Instead of contributing hundreds of millions to the Labor Party, unions could learn from the Occupy movement.

The idea that the union movement could revisit its 2007 battleground is ill-conceived. Unions are in a weaker position now, thanks to the Fair Work Act which has actually put them on the back foot. The legislation is perverse because it's about process, not outcomes. It encourages unions and employers to slug it out, there's little scope for arbitration and when it does happen, they only look at a restricted number of areas.

Sure, that might trigger more strikes but the Labor government, once the party of the workers, has now created militant employers. The Qantas lockout, protected industrial action under the Fair Work Act as a response to union industrial action, was a sign of how far the ground has shifted. BHP's closure of the Norwich Park coal mine in Queensland is another example, especially with the CFMEU now claiming it has evidence that the multinational plans to reopen it with contracted workers in 2013 (something BHP Billiton has flatly denied). This is a far cry from the compulsory system of conciliation and arbitration developed by the authors of the Australian constitution, notably Alfred Deakin and Henry Higgins, which in effect guaranteed a place for unions. That's disappeared.

Certainly, the latest figures show the union movement is losing contact with the broader community. According to the Australian Bureau of Statistics, the proportion of Australian workers who are trade union members is just 18 per cent. In the private sector, it's 13 per cent. In the 1940s, union membership peaked at 64.9 per cent. It was around 34 per cent in the mid-90s.

Some on the left have argued that the decline of union membership came with Howard Government's WorkChoices but that's ridiculous. Howard's been gone for five years now, you'd think it would have bounced back. It hasn't.

The reality is that the decline in union membership has been a long time coming. It's been created by structural shifts in the economy. A recent study by University of Pennsylvania economist Jeremy Greenwood and the US Census Bureau found that the fastest dying jobs since the 1980s have been in the heavily unionised sectors like drilling and boring machine operators, brickmasons, shoe machine operators and pattern makers. The fastest growing jobs are in areas of specialised knowledge like health technologists, managers and computer system analysts and scientists. Fast expanding job categories required high levels of education and few had high union membership. The trend would be similar here, and it will continue. The more hostile attitude of employers towards unions hasn't helped.

Bradley Bowden, associate professor at Griffith Business School, says that the only areas where unions have strong membership are in those jobs that rely on skills which become a barrier to entry: police, fire fighters, teachers and nurses. He says the unions covering these jobs are much like the AMA, protecting their own and their labour market and standing up to government (most state governments are terrified of police unions and the nurse's union beat the Baillieu government).

But unions are weak in other areas like mining and construction dominated by contractors. In coal mining, union representation has gone from 85 per cent 12 years ago to 40 per cent. Miners are now bringing in contractors and clean skins. And let's not even talk about hospitality where cafes, restaurants and bars have hundreds of thousands of international students and backpackers to choose from. They wouldn't know what a union looks like.

This is not to say that unions are irrelevant or weak. They're not, that's why business wants to neuter them. They were instrumental in the 2007 campaign and helped put John Howard out of a job. When companies like Toyota are selectively sacking workers, and when Qantas coincidentally announces it is cutting 500 maintenance jobs at the same time that exiled Labor MP Craig Thomson is addressing the House of Reps in Canberra, there is definitely a place for unions. And the successful campaign by the Victorian nurses, which humiliated the Baillieu government, was the best I had ever seen in my years covering industrial relations. It was an innovative campaign that created connections with the community through its brilliant use of social media, something I looked at here (Social media's industrial strength, March 14). The union movement could learn from the nurses.

The unions can also draw some lessons from the Occupy movement. Unions are stuck in an old-fashioned collective bargaining system, filled with self-serving leaders and too closely aligned with an unpopular government. The Occupy movement, on the other hand, focused on inequality that has affected society and not just union members. And unlike the unions, it's sceptical about both sides of politics and it's committed to radical democracy where everyone participates, light years away from the HSU. Governments, councils and police have found them impossible to handle. Occupy found ways to address community concerns with the kind of creative activity and risk-taking you never see coming from unions.

The union movement needs to work out which side it's actually on so that it can find its place in the community again. The battle against big business and the coalition is just a side show when the movement is fighting for survival.

Leon Gettler is a contributing editor at LeadingComapny. You can follow him on Twitter @leongettler