Do modern day unions that grew out of the Industrial Revolution make sense for our post-industrial, global economy? With falling membership numbers around the world, some label unions as economically irrelevant today. Yet unions have achieved many advancements for workers throughout the last few hundred years, and their services may be even more important in today's global economy where job insecurity and meager benefits are becoming the norm.

Globalization poses many challenges to organized labor. Union reaction to change has been historically conservative, but it now appears that organized labor recognizes that globalization is here to stay. There is no option but to work with it. The survival of unions around the world depends on their ability to adapt to the global market place. Going forward, unions will need to look for innovative ways to attract and protect workers in today's precarious global workplace.

History of Organized Labor

Modern trade unions were born out of workers' resistance to changes associated with the Industrial Revolution of the late 18th and early 19th century. During this period there was a major shift in technological, socioeconomic and cultural conditions that began in Britain and spread throughout the world. An economy based on manual labor was replaced by one dominated by industry and manufacturing, with the introduction of machinery in factories and mills. The effects spread throughout Western Europe and North America during the 19th century, affecting most of the world by the mid-20th century.

The survival of unions around the world depends on their ability to adapt to the global market place.

The impact of industrialization on societies was great and many resisted the change, as it was viewed as threatening to their jobs and livelihoods. The most notorious labor revolts were led by a group of English textile workers known as Luddites. The Luddites protested against industrialization, sometimes sabotaging factory machines. Even today, the term Luddite is used to refer to someone opposed to technological progress or change.

Conditions for the working class had been historically poor and industrialization created new problems for workers. The pace was set by machines and working hours were long. On the other hand, ordinary working people found increased opportunities for employment in the new mills and factories, and the concentration of people in one place facilitated trade union organization. This, in turn, helped advance the interests of workers, ultimately leading to better working conditions.

A union could demand better terms by threatening to withdraw all labor, causing a cessation of production. Employers had to decide between giving in to union demands and suffering the cost of lost production. Unions were considered a menace for both employers and governments and were outlawed in many newly industrialized countries. Despite adversity and harsh punishments, union activities continued - often underground - with the organization of peaceful gatherings as well as disruptive strikes.

Labor history varies from country to country, but generally unions' perseverance led to government concessions in newly industrialized nations. First in Britain and then in the United States, for example, labor laws were created making organizing efforts legal and codifying the relationship between employers and employees. Continental European unions gained similar legal protections and quickly consolidated their power through strong affiliations with like-minded political parties. In developing countries, membership numbers were historically lower but unions acquired disproportional political strength in the mid-20th century owing to their support of independence movements and other successful social revolutions. Over the course of a few hundred years, unions have been institutionalized in most countries and have helped establish more humane working hours and conditions for people around the world.

Globalization and Labor

Flash forward. We've entered a global, post-industrial, technology-driven era. Information technology reigns, communication is instantaneous and international travel and transport of goods are made easy and accessible. The global economy is characterized by the liberalization of trade, deregulation and a rapid and continuous flow of new technology. Moreover, the free movement of investment capital has resulted in increasingly intense global competition.

Over the course of a few hundred years, unions have been institutionalized in most countries and have helped establish more humane working hours and conditions for people around the world.

Thomas Friedman, the acclaimed New York Times columnist, contends that these changes are flattening our world (See the review of his book The World is Flat ). Speaking at the Stanford Institute for Economic Policy Research in 2005, Friedman argued that we have entered "Globalization 3.0" which started in year 2000 and continues to the present. He believes that there is a fundamental shift in the global economy that is shrinking our world from small to tiny and leveling the playing the field at the same time. Interestingly, Friedman claims that the dynamic element of this era is not countries or companies; rather, individuals of all races from all parts of the globe.

Seen positively, globalization creates prosperity and employment. In particular, it has opened up new possibilities for economic growth in previously underdeveloped countries. By generating wealth, economic liberalization can be the driving force behind social progress. This viewpoint is supported by organizations like the Organization for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF). The idea is that trade, foreign investment and new technology contribute to economic expansion, which is the key to employment. Unemployment, according to these organizations, is mainly due to governments' failure to adopt sound macroeconomic and labor market policies.

Prosperity is not, however, being felt universally. The dramatic changes wrought by globalization may provide opportunity, but also pose great challenges to many sectors of society - especially labor. Globalization has been blamed for mass unemployment in developed countries and for exacerbating poverty in developing ones. According to the International Labor Organization (ILO), the poorest 47 countries in the world receive no more than 0.7 per cent of total investment by multinational companies. While deregulation and privatization have engendered a major increase in cross-border investment, new investment is concentrated in middle-income Asian and Latin American countries.

The ILO explains that the loss of jobs and subsequent unemployment in developed countries is quite commonly associated with globalization. The main arguments are as follows:

• Multinationals have moved jobs from developed countries to developing ones to take advantage of low-cost labor and more lenient production standards.
• Governments have encouraged the replacement of domestically produced goods with imports from abroad through trade liberalization.
• Technology reduces the use of and dependence on labor.

Not surprisingly, trade unions distrust globalization and have at times resisted its tide. In the late 1990s, organized labor in North America openly supported anti-globalization protests, most notably at the 1999 WTO Ministerial Conference in Seattle. Unions also wreaked havoc at the Summit of the Americas regarding the proposed Free Trade Area of the Americas (FTAA) in Quebec in April 2001. September 11th, however, created a political division between the unions and other anti-globalization activists as organized labor decided to support the war in Afghanistan. Since then, organized labor has taken a more conciliatory stance toward globalization.

Unions in Decline

In the globalization era, there is a decline in union membership and consequently diminishing union influence in most parts of the world. Unions are losing their traditional members due to downsizing and increased unemployment. Retaining and recruiting new members has been made especially difficult as subcontracting, outsourcing, flexible work arrangements, increased informal work activities and stronger union avoidance tactics on the part of employers have become more prevalent.

In the 1950s, more than one-third of U.S. workers were unionized. Today less than one-eighth are unionized.

The numbers speak for themselves. In the 1950s, more than one-third of U.S. workers were unionized. Today less than one-eighth are unionized. Union membership in Canada, historically more robust than in the U.S., has dropped below 30% of the Canadian workforce. According to a January 2006 article in the Monthly Labor Review , out of 24 countries studied, the current union membership rates are lower than in 1970 in all but four small European economies (Finland, Sweden, Denmark, and Belgium). According to the author, "These four happen to be the only ones in which unions are involved in the administration and execution of unemployment insurance". Union membership in Asia has also declined in some countries. Chinese unions in particular have been hard hit by the dismantling of state enterprises where they were previously entrenched.

Survival Leads to Innovation

Member loss and weakening political influence are prompting predictions of union demise. Academics writing on behalf of the Heritage Foundation, a conservative, Washington D.C.-based think-tank, recently claimed that unions in the U.S. are quickly becoming economically irrelevant and are facing extinction. Organized labor, however, doesn't seem to be giving up easily. American unions have proven capable of adapting to economic shifts that shake their membership base. For example, in the last few decades, they were able to expand their representation from blue-collared workers on the factory floor to white-collared professionals in the growing service industries. Just last year, the American union labor movement splintered in order to pursue different strategies to attract and meet the needs of their service sector constituents.

There are also innovative efforts in developing countries to organize workers in the growing informal sector and within foreign-owned companies. According to the Global Labour Institute, an excellent example of the former is the Self Employed Women's Association (SEWA) in India. SEWA started twenty-five years ago with a few hundred members and now numbers over 200,000 in four Indian federal states. The union organizes domestic workers, street vendors, paper pickers, refuse collectors and others. Recently, Chinese unions surprised the world when they quickly organized 20 Wal-Mart supercenters across China, a company that has managed to remain union free in most other countries, including the U.S.

Let's suppose Friedman is right that individuals dominate this era of globalization. Then organized labor's return to grass roots organizing and its embrace of more types of workers is perhaps the requisite adaptive behavior. It remains to be seen if unions can continue to provide social protection to workers in an era when it is especially necessary.




Contributed by Janie Hulse Najenson, a writer for Global Envision based in Buenos Aires, Argentina. Ms. Hulse has an undergraduate degree in industrial and labor relations from Cornell University and a Masters degree in Latin American development from the London School of Economics. She has worked for both the public and private sectors in the areas of corporate communication and academic research.

To read another Global Envision article about unions around the globe, see Made in China: Wal-Mart Unions.



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