Future of Unions. Ross Wilson Public Lecture

The future of unions in the year 2000, by Ross Wilson, President N Z Council of Trade Unions - Public Lecture Massey University Albany, 23 August 2000.

I welcome the opportunity to speak to you on unions in the 21st century. If nothing else I hope I can dispel some of the myths about unions.

The media consistently presents a very negative image of unions. TVNZs Assignment programme a few months ago portraying union members as sinister looking automatons and unions as dinosaurs is a fairly standard example. The National Party website uses similar imagery. And the article in a recent issue of North & South magazine reflects the same refusal to look at the reality of unions today rather than the unions of 10 or 20 years ago. People can be forgiven for sometimes having a rather strange view of unions and unionists.

I am reminded of an occasion many years ago, in 1980 in fact, when I had invited the then President of the New Zealand Medical Association to speak at a union seminar on accident compensation in Hamilton at a time when were campaigning against National Government cuts to ACC...the Quigley Committee cuts. The unionists were all assembled in the seminar room at Waikato University and a head popped in the door, withdrew, and then reappeared again. It was the NZMA President. He looked a bit surprised and said " I was told I was to be speaking to trade unionists.......you look like a bunch of ordinary people to me".

So while I accept that some union spokespeople of the past have helped create our image, I do ask you to bear in mind that membership of unions spans doctors and university professors through to rail, port workers and cleaners. More than 50% are women, and there are increasing numbers of Pacific Island, Maori and young workers.

What am I trying to say to you? I suppose it is this:

-Unions are made up of ordinary New Zealanders. -Those ordinary New Zealanders reflect the increasing diversity of our national workforce. -Those ordinary New Zealanders come together in unions because we believe that by working collectively and co-operatively we can more effectively improve our conditions of work and social conditions for our families.

I realise that the CTU has a major challenge in our attempt to get people to look past the media stereotypes and actually see unions as organisations of real people who, together, are a reasonably comprehensive reflection of the New Zealand workforce in the 21st century.

Union members often ask me why their unions are subjected to such virulent political and media attack. The reality of course is that the role of unions has been an issue of public debate since the days of Adam Smith.

We have seen the political attack re-emerge with a vengeance during the election campaign and this has been picked up by the media during the passage of the ACC Bill and the Employment Relations Bill.

It is of course suggested that these measures will be the death knell for New Zealand business. Surveys of "business confidence" are suddenly seen as the only measure for Government policy. This issue is put nicely into perspective by the very experienced political and economic journalist Patrick Smellie in an article in "Grace" magazine who asks how good are the business critics at what they do.

Smellie points to research published this year by the ANZ Bank's head of corporate finance, Joseph Healy, which suggests that our largest companies (with the exception of Telecom) have consistently destroyed shareholder value during the '90's.... an economic added value (EVA) loss of $14 billion over 9 years, of a share market with a total value of $50 billion. He raises the question that perhaps that abysmal performance by our largest companies might be to blame for our apparently blighted prospects but he also quotes expert opinion that the mid-2000 business confidence crisis will be seen historically as a "politicised blip".

We also have to look at the restructuring of the past 15 years. The process of economic restructuring was predicated on an assumption that short-term pain would produce massive gain.

The reality was that the policy programme created neither stable conditions nor better growth rates. The restructuring period covered two business cycles. The reforms essentially "parked up" the New Zealand economy so we were outside the upward phase of the world business cycle in the late 1980s.

There was zero growth for about 6 years from 1986 to 1992. In terms of real gross domestic product per capita, New Zealand has fallen from being ranked 4th in the OECD in 1960 to 15th in 1993. GNP per capita from 1984-99 was 0.2% per annum on average compared with 0.6% over the 1969-84 period. In addition, in 1960 labour's share of GDP was around 60% whereas now it is closer to 50%. Real wages in 1997 were lower than in 1974.

If the New Zealand economy had grown at its previous trend rate, or matched Australia over the same period, output would be a third higher than it is now. The previous CTU Economist Peter Harris noted that:

"the amounts of personal and public income associated with this are staggering. At current tax rates the extra income would have generated an extra $11 billion of tax revenue per annum - enough to halve net government debt, or double spending on health and education".

It is perhaps worth noting that research at Harvard University by Professors Freeman and Medoff has concluded that unions make a positive contribution to efficiency, income distribution, and social organization.

In New Zealand one economist has calculated that labour productivity has been a third higher in the most unionised sectors of the economy under the Employment Contracts Act and in the 'Grace article reference is made to research by Professor Gilson of Waikato University which found that companies with collective employment contracts were more profitable than those with individual contracts (without identifying any causative link).

Which brings me back to the Employment Relations Bill. The basic principles which underpin the ERB are the same principles which are binding on the 170 countries which belong to the ILO. The international law, in the form of conventions, binds those countries to:

-Guarantee the right of workers to organise together in collectives or unions for their common advancement -Guarantee the right of those workers, as unions, to bargain collectlvely with their employers over wages and conditions of employment.

The reasons for those rights being enshrined in international law as basic human rights are quite interesting and essentially explained in the Declaration of Philadelphia which was drafted (in part by our own Walter Nash) by the Western nations at the end of WW2. In reflecting on the appalling devastation of the war, and its origins in the economic, social and political instability of the inter-war years, they concluded that:

-No peace without social and political stability -No social and political stability without fairer wealth distribution -No fairer wealth distribution unless address inequality in employer employee relationship

Hence ILO Conventions and E R Bill approach

The Object of the Act:

-To build productive employment relationships through the promotion of mutual trust and confidence in all aspects of the employment environment and of the employment relationship- -By recognising that employment relationships must be built on good faith behaviour and -By acknowledging and addressing the inherent inequality of bargaining power in employment relationships and -By promoting collective bargaining and -By protecting the integrity of individual choice and -By promoting mediation as the primary problem-solving mechanism and -By reducing the need for judicial intervention and -By promoting observance in New Zealand of the principles underlyng the international labour conventions

So what is the challenge to the New Zealand union movement at the beginning of this new era?

The euphoria of the election victory has not changed the scale of the environment we face as a union movement:

-Both workers and unions have taken a battering, politically, industrially, and economically for more than a decade. -Social and economic inequality has increased, particularly between Maori and non-Maori. Maori unemployment is 18.2% compared with the general level of 6.4% -New right ideology has taken its toll and notions of community and collective responsibility have been corroded by individualism and indifference. -Dramatic changes have taken place in the labour market. -Union density is down to 20% from 52% in 1991.

Despite these grim realities our aim is to rebuild the New Zealand union movement and there is a growing confidence that we can do it.

It is not just a hope. There is a rational basis for the confidence.

We have survived when we were meant to have been eliminated.

And we still have a strong core around which we can rebuild.

I think it is also true that there is a new appreciation among working people of the role that unions can play, not only at workplace level, but at a political level as well.

More than 50 years of compulsory union membership prior to the ECA meant that many unions were not well organised and member driven. Many workers resented, or were at least indifferent to, the unions they were required to belong to.

What an increasing number of workers now understand is that there has been a direct correlation between the impact of the Employment Contracts Act on unions and the deterioration in their conditions of employment and political influence.

There is a greater appreciation that unions have an important role to play not only at workplace level but as a voice for working people.

The legitimacy of unions as a democratic counterweight to the power of the corporates, which have dominated the political agenda for the past decade, is increasingly recognised.

Most importantly, unions are signalling that they are ready to grow again. Many of them, particularly in the private sector, are adopting innovative organising strategies and are looking outward again.

We may have survived the ECA but surviving is not enough. Organising for growth is the most important challenge facing the New Zealand union movement today.

The new NZCTU leadership is therefore taking urgent steps to develop new strategies for growth. It will be clear to those of you who have been familiar with our legislation that the new ER Act will be far from a return to the pre ECA law. In particular there will be:

-No demarcation of the workforce or exclusive rights for particular unions to represent categories of workers. -No compulsory unionism -No compulsory arbitration.

In short new law will be no magic bullet. It will not do the job of organising workers into unions and collective bargaining units.

The new CTU leadership was elected on a platform for change; essentially to lead the re-building of a new union movement around an organising and campaigning strategy directed at achieving greater influence for workers at both a workplace and a political level. In doing so we are drawing on not just our own, but international union experience which has identified several key building blocks:

-That educating and developing more delegates and activists in the workplace is essential to union growth and strength -That more resources?ideally at least 20% of union budgets - should be invested in growth; in organising and recruiting. -That unions must use new technology to improve communication, develop cost effective services, modern management methods and democratic structures. -That the union movement must speak loudly for workers through modern campaign and media methods, by building alliances with community organisations, and by developing international unionism.

We need to develop new methods and techniques of organising and, by working together, assist unions to do the job better. We shall, within the next few weeks, be establishing a CTU organising centre in Auckland to start that work.

The new CTU leadership has developed close links with the ACTU and the centre will be working very closely with the ACTU Organising Works Centre in Melbourne.

Our aim is to develop a centre of excellence for union organising and campaigning. We have developed valuable knowledge and skills from our experience of the last 10 years. We hope to pool our ideas, draw on international union experience, and build the techniques and strategies that will rebuild the N Z union movement into the 21st century.

We will have to be innovative and flexible in approaching the new era. Young workers are starting to re-organise and have formed their own organising groups?YUM?the Youth Union Movement; we will not always agree with their strategies and ideas but we must encourage them not stifle them. Our young members are the key to recruiting the thousands of young workers out there who have been denied the opportunity to join unions by the ECA.

Within the CTU we are working actively to encourage different interest groups to organise around issues of particular concern for them. So the Women's Council has grown in strength over the past six months. PI union reps are organising together in their Kometi Pasefika. Maori workers are rejuvenating their Runanga. We need their help to reach out to PI and Maori communities and develop working alliances.

In many regional areas unions are working and organising together. This renewed activity and co-operation between unions is an important key to rebuilding unionism.

We aim to bring all unions back into one union centre. On Monday I signed an Agreement between the CTU and the other small union centre, the Trade Union Federation, which includes a process for TUF unions to come into the CTU.

That is progress but the real challenge is managing ourselves, as unions, as we move to take advantage of the new era which is opening up for us from 2 October.

Given our history, it is a big challenge. As well as the traditional rivalries between existing unions there are going to be many new factors emerging.

For example: New unions. How to we approach them? Do we attack them or embrace them? New 'bargaining agent' type unions are emerging which will just come in to negotiate a Collective Agreement once a year or 2 years...for $1 a week. Insurance Companies are offering insurance policies to provide legal services for PGs for a $1 a week premium. Legal firms are forming 'shelf unions' for corporate clients. We need to be careful not to alienate potential union members by attacking their choice...however misguided... of a union. A better option might be to market our advantages as experienced independent unions and demonstrate in practice that we are better:

-That we create safer workplaces by organising and resourcing health and safety activity -That we are involved in crucial areas like skills development, apprenticeships, superannuation. -That we are involved in industry development and job creation. -That we provide better, more cost effective services. -That we organise and campaign at a political level for the benefit of workers and their families.

It is on this last point that I want to focus and conclude.

The right to organise is a human right guaranteed by international law.It is not just a workplace right. It is also important at a political level as a countervailing force to corporate power. The ECA era raised vital issues for NZ as a democracy.

The ECA was intended to destroy unionism in our country and if the National Party and the extreme right wing party ACT had been elected to Government last November they would have finished that task. In doing so they would have seriously weakened their political opposition and democracy in New Zealand.

Luckily the experience of the past 10 years has led New Zealanders to a greater understanding of the role of unions.

In a television phone-in survey late last year 96% of callers agreed that the decline in living standards for working people in NZ was related to the decline in union power.

So our political role is an important one and a selling point to workers. We are embarking on an active programme with the new Government.

We will need as many allies as we can to build a new unionism... a social movement unionism within which unions and other community organizations work together for common objectives.