Crossroad for unions: domestic or international?

A noticeable change in recent labor union history is a gradual departure from their original international ideas by increasingly narrowing them down to local or domestic matters. The old idea of international proletarianism, and the aspiration to defend workers’ interests worldwide, or at least beyond domestic boundaries, are giving way to union policies heavily conditioned by more immediate interests, often clashing with those defended by labor union organizations in other countries. From the grand labor union statements preaching the fight for workers’ rights in a context of international solidarity, and the organizational activities on the European and world stage, in an attempt to be present in the major global debates, we have moved towards framing the protection of interests preferably within the territory where each labor organization operates.

What lies behind this change? Obviously confusion, perplexity, and a failure to analyze and understand the new economic and social context associated with globalization and with the new labor relations. But that is not all: the way in which labor relations are evolving in an increasingly open and globalized world has turned the labor unions into increasingly more domestic organizations, whereas companies are tending to broaden their horizons. Companies are more international, the interplay of economic forces is increasingly more global, whereas the unions are finding it harder to push forward proposals and approaches that go beyond domestic boundaries.

In the current economic dynamics, in a great many company disputes the unions are finding it increasingly difficult to adopt the role of international player, and are being compelled to be restricted to defending local interests, which often come into conflict with the interests of workers and labor union organizations in other countries. In processes for industrial restructuring and shifting production, the only union weapon able to be used to exert any pressure is cross-border industrial action creating a coordinated pressure and negotiation front internationally. Only the concerted pressure of the various business units would make it possible to have representatives with a real ability to influence companies’ decisions. But this comes up against an impossible obstacle: the interests of the workers and of their unions, in the various countries are for the most part not the same. The shifting of production has an adverse effect on the country it leaves, but benefits the workers in the recipient country. The problem becomes more acute in a single market, where it is not even correct to talk about “shifting” to refer to the transfer of production to another country in the single market.

There have been recent examples of all this. Cases involving closures of business units, by multinational companies, with facilities in various European Union countries, in which the labor unions’ first goal was to seek the solidarity of the unions in those other countries, by asking them to take action to exert pressure for a reconsideration of its intentions by the company. And the response could not have been more disappointing: closure of the factory was going increase production and strengthen other factories, so their workers were not going to join any action that could adversely affect their interests.

And this situation is reproduced, with bolder hues, within the confines of groups of companies. A good example is the automotive industry, where a firm’s announcement of the manufacture of a new model or of the launch of a new product pits the factories in the various countries against each other on a race to see who will win the contract. Naturally this race is influenced, and heavily so, by the working conditions offered by the labor unions to secure production, and on many occasions, by the very survival of the plant. In these circumstances, it is unrealistic to propose common labor union positions and each labor union is compelled to strictly defend the interests of its own workers, in stark contrast to those of other countries’ workers. The union is therefore forced to “think” in domestic or regional terms whereas the company approaches and develops its strategies globally. This is what I mean when I say that the labor unions are increasingly more domestic and companies becoming are becoming more international. More global in other words.

This course of events in turn has considerably changed the dynamics of labor relations and the relationship of forces among their main players. From one angle, due to the characteristics of the new production system, the unions’ ability to exert pressure in a local context and in the short term has risen. Many companies cannot withstand a stoppage, not even a short one, in production. This is particularly the case at companies supplying others, which must operate on a just-in-time basis, and face fierce competition. In all these cases, the battles are usually won by the unions and that explains the demise of collective bargaining, and the appearance of collective labor agreements with a rising number of concessions. The terms of collective labor agreements often make us wonder how they were ever granted by companies. And the reply is simply this inability to withstand a stoppage in production. But whereas the battles are won by the unions, the wars are won by the companies. A labor union’s advantage in the short term becomes the company’s overriding power in the medium to long term. If the labor unions cannot properly administer their ability to exert pressure in the short term, they run the risk of triggering a scenario where the company, which is a global, rather than a local, player, must reorganize production and use processes for shifting production, or assign the workload to other business units. In Spain we have seen examples of union action which have gone, to paraphrase Groucho Marx, from victory to victory until the final defeat. We have seen how a brilliant string of victories in negotiations can lead to closure of the factory and to production being shifted to other countries.

The unions ought to seek a way to turn that tide and try to find a new role on the global  stage where the most important decisions are taken. Burying themselves in local causes is the surest route to insignificance and would condemn the unions to a strictly corporate role, confined to protecting the professional interests of certain core-groups of workers, at times no longer against employers but against other core-groups of workers, and a long way from the intermediary roles at the levels that really matter for decision-making and from having even the  slightest amount of influence on the organization of corporate relations (that political role, beyond strictly corporate matters, that the unions have already sought).

The future of work. Changes in the world of employment

The changes we are experiencing in the world of employment are fast and continual. If we look at what work will be like, and how employment relationships will be structured in the future, the only certain thing we will find is that they will change continually and we must forget any attempt to find a stable place for accommodating new scenarios. In the words of Yuval Noah Harari, author of “Sapiens”, “any attempt to define the characteristics of modern society is akin to defining the color of a chameleon. The only characteristic of which we can be certain is the incessant change”. And the problem is that often we try to understand the changing employment scenario using conceptual structures of the past. That explains the disconcerted reaction to the changes and the improvised and well-intended nature of many of the changes proposed to bring order to the new scenario.

Above all, the world of work is experiencing the impact of automated and robotic processes. Which is having an effect on both the numbers and characteristics of the jobs required. The number of jobs is affected because the processes of automation, the use of increasingly sophisticated robots, is reducing labor needs, more drastically in some industries than in others. The destruction of jobs is vast, though it must be said that the same process that is destroying jobs is also creating new employment opportunities. This is a two-sided problem: from one angle, as we have seen in every change process in the production system that we have experienced in the past, there is an inevitable time delay between the destruction of jobs and the appearance of new jobs on the market. This puts pressure on unemployment, in the short term, and means that some generations of workers suffer the consequences of change more than others.

From another, and here we link up with the other impact of automation, on the characteristics of employment, the new jobs have very different training requirements and may not fall within the traditional formats in the world of employment. The jobs that are arising are different from the previous ones, with very different training requirements (making it hard for them to be performed by the workers displaced by automation) and with forms of performing work that may differ to a large extent from those traditionally in place.

It also has to be considered that the consequences of automation are felt very differently among the various sectors of the labor force. More qualified (and highly paid) employees in skilled jobs with a high cognitive element are for the time being little affected by the use of robots. Their work has a low manual component and is not repetitive, so not easy to automate (for the time being, I must stress, until we have robots with cognitive skills, able to take decisions independently). Similarly, people in lower qualified (and lower paid) jobs who are increasingly joining the ranks of personal services are also withstanding the devastation caused by automation, because their tasks are manual but not repetitive. Automation has had the greatest impact on medium to highly qualified jobs, with average to high pay, which are manual and repetitive and therefore easy to replace with a robot. The full effect of this is felt in the manufacturing industry, by the more traditional and unionized components of the working population.

That explains various changes that are taking place in the world of employment. Among other things, it is the root cause, along with other factors, naturally, of the widening salary gap, a greater difference between the higher and lower paid employees (due precisely to the impact on employees in the middle qualification and pay range). And it also explains, or helps explain, some of the changes that causing the most confusion among the analysts that are staying within the conceptual frameworks of the past. The rebirth of self-employed work, for example. Leaving aside the clearly fraudulent mechanisms, seeking only to evade employment legislation, such as those of false self-employed workers, a great many new jobs in advanced technology sectors, which make intensive use of information technologies, arise or are entered into as self-employed work, falling outside the traditional types of self-employed work. We are increasingly seeing the appearance of new opportunities for self-employed work, which is dependent to a greater or lesser extent (and, therefore, with a greater or lesser need for protection) but in all cases clearly distinct from the traditional types of self-employed work.

Elsewhere, the new jobs arising in the more advanced sectors of the economy are linked to specific projects and are therefore temporary. We still think of temporary jobs as precarious contracts, which are often used simply to avoid the economic and legal costs associated with an indefinite contract, but many of the new jobs created by changes in the production system are temporary jobs, meaning they require a temporary rather than an indefinite employment contract. The recent introduction in France, by the Macron reform, of project-based contracts is a good exponent of these new scenarios.

If we try to continue seeing temporary employment exclusively as a bad thing, or at least as an exceptional measure, in employment contracts, we will never be able to give an appropriate response to the new scenarios in the world of employment. Similarly, both the employment and social protection legislation must take into account the new central role that self-employment is gaining, and will increasingly have in the future.

Lastly, a no less important change in connection with labor relations is that arising from the trend, an unavoidable consequence of the factors described above, towards more individual employment relationships. Individual rules on working conditions will gradually become more important and the employment contract will re-gain room for determining working conditions. This creates a considerable amount of friction with the traditional collective bargaining system and with the unions’ goal to retain their monopoly over the rules on working conditions.

All of this makes for a changed and changing world of employment. It will be no use trying to ignore the changes or stamp them out by introducing prohibitions in the law. We must search for new legislative answers to the new circumstances we are facing, instead of trying to ignore the changes and redirect them to the structures of the past.