Sunday, January 07, 2018

There's Power in the Union Still

The decline of trade unions across the developed nations is nothing new. In the US the proportion of workers in unions fell from a high of 35% in 1954, mostly in the private sector, to 11% in 2016 with nearly half in the public sector. Union density in the UK fell from a high of 55% in 1979 to 25% in 2016.
Despite the recent revival of the left in both countries, the days when unions had the power to demand major concessions and win still seem far away. Partly thanks to tough labour laws and employer aggression, their role has become much more about consultation than negotiation.
In the US, the fall of labour began at the end of World War II as major manufacturers moved production facilities to the non-union South to reduce costs and escape big concentrations of unionised workers like those around Detroit, Gary, Los Angeles and Chicago. The unions had been primarily in corporations defined by a single major product line like cars or steel. Being part of a much bigger whole reduced workers’ potential to do damage through industrial action. This, in turn, made unions less attractive and further squeezed membership numbers. Many corporations took a page from their Japanese competitors’ playbook and introduced lean production: producing more with fewer workers; more outsourcing; and just-in-time delivery of parts, cutting inventories to a minimum.
Enormous logistical clusters of transport, warehouses, ICT networks and intermodal facilities have sprung up. They are mostly in or adjacent to large urban areas, the biggest including New York, Chicago, Rotterdam, Hamburg and London. The number of warehouses in the US by 2017  has grown one and a half times since 1998. While automation is often a feature, labour still accounts for 65% of average operating costs, while the number of warehouse workers has grown from 356,800 in June 1990 to 830,700 in June 2017. Total logistics employees in America are around 4m.
These are the people on whom today’s industrially focused corporations completely depend. Really big hubs need upwards of 100,000 workers to function. Take Chicago, with over 150,000 transportation and warehouse workers in the metropolitan area. Or FedEx’s newer Memphis cluster, which employs 15,000 workers directly and 220,000 in related transport and warehouse activities.
In the UK there are clusters around Liverpool-Manchester, the Midlands, Glasgow, and London. The London Gateway port and its 9m square foot logistics park opened in 2013 and will employ 27,000 workers when fully operative, extending an east London cluster that also includes Dagenham Dock, Tilbury Docks and London Thamesport.
In addition, major UK freight railways are upgrading to create a Strategic Freight Network similar to the huge rail corridors in the US. Altogether, the UK logistics sector employs 1.7m workers. Across Europe as a whole, logistics investment has grown at two and a half times GDP according to one estimate.
These clusters look highly vulnerable to worker disruption. A strike in a key warehouse or supplier could close production up and down a supply chain, potentially inflicting huge damage on a business’s reputation for reliability among its partners. This could put enormous pressure on employers to grant concessions or recognise a new union without the need for the sort of secondary or sympathy strike action that is illegal in many countries. We have not yet seen unions trying to take advantage of these situations, partly perhaps after decades on the backfoot and partly because the likes of warehouse workers tend not to be unionised.
 These hubs could become a major flashpoint.

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