EUROPE

Autumn 2006

by John Monks

Europe’s trades unions have lost 40% of their members since the early 1980s and fast changing business conditions hold little promise of a respite. John Monks, General Secretary of the European Trade Union Confederation (ETUC), assesses the challenges to the EU’s “Social Europe” and proposes his own rescue strategy

When three years ago I moved to Brussels from Britain to run the European Trade Union Confederation (ETUC), one of the courtesy visits I paid was to a senior European Commission official I had come to know well when I was at the Trades Union Congress in the UK. “You are 10 years too late”, he told me. “Delors is long gone and Social Europe hasn’t just stopped but is being reversed. All our attention is on promoting economic growth. You certainly won’t achieve anything new, and in fact you’ll be doing well if you manage to keep the things your predecessors achieved. Why didn’t you stay in London?”.

It was hard and brutal advice, but it also turned out to be an honest and often accurate picture of my own experience since then – not just at European level but, also nationally, where the pressures are for less Social Europe, less Social France, less Social Germany and so on.

The fact is that the political and business elites of Europe now broadly share the opinion that Europe can only compete with the United States and with emerging economies like China and India by cheapening its welfare spending, reducing public services and breaking the power of trade unions to either slow the pace of change or make the price of reform unattractively expensive.

This European consensus spans centre-left politicians like Tony Blair, many officials in the European Commission, and German employers who hope that Chancellor Angela Merkel is set to become a Frau Thatcher. And not a few French political leaders nowadays look enviously, if erroneously, to the anglo-saxon model.

So, in this context, what can unions do? Continue to man the defensive barricades, or try to shape the direction of change? The changes needed are difficult and profound. They involve a strong sense that jobs are migrating east and south to the cheapest locations, and also that people are emigrating from those locations who are prepared to work more cheaply and under inferior conditions.

The changes include the emergence of a new financial climate, a more ferocious style of capitalism which, under the doctrine of shareholder value, powered by hedge funds and others, makes it more and more difficult for companies to take a long-term view on investment in technology and people. They also include a concentration of union membership in manufacturing with a shrinking and ageing workforce, and also in the public sector, which is itself subject to market driven pressures through privatisation and contracting out.

Despite their undoubted victories on the Bolkestein directive at EU level and in France over the Contrat de Première Embauche (CPE), Europe’s trades unions have lost members, lots of them – around 40% on average in the past 25 years. There are exceptions in the Nordic countries and Belgium, but the overall trend has been downward and at a rapid rate.

We know that the conditions that in times past saw the rise of trades unions in the mines, the mills and the big factories are not the same in the modern services sector, which now employs around 70% of the total workforce. Workplaces employing several thousand workers doing the same kind of work have become a rarity in the West.

But we also know that other conditions which led workers to form and join unions in the past are still present in the services sector today. In the retail, hospitality, call centre and tourism sectors especially, these conditions include low wages and long hours. Exploitation can be as much a feature of the modern services workplace as in any traditional textile mill. Rising levels of inequality are also a feature of today’s world, with the emergence of a large class of the super-rich at the head of big corporations and financial institutions – their luxurious lifestyles are in stark contrast to those of many in their workforces.

There is no shortage of modern issues to be championed; the steady disappearance of decent pensions, the pressures of work-life balance, the growing requirement to work to older ages, shortages of learning and re-training opportunities, and so on. Supermarkets and large hotels may be the mills and mines of the future, and in real terms their pay levels are already lower.

There is therefore no reason to regard the decline of trades unions as inevitable just because our manufacturing heartlands have shrunk. The challenge is to make ourselves as relevant to the shop and hotel worker as we have been and still are to the factory worker.

Unions are employing a range of strategies to adapt to the changing world. In the UK, Germany and elsewhere, much faith has been placed in mergers. I believe that mergers can be useful where there is wasteful, overlapping competition. But just as in the corporate world, union mergers can be expensive, take time to carry through and can divert management attention to internal issues at the expense of external impact.

Persuading two or more democratic organisations to merge is not as brutal as many corporate mergers, because otherwise the Unions’ members would block it. I myself am far from clear that a merger strategy per se is a step towards trades union membership growth, or whether it is more a way of managing decline. Much depends on the mission clarity of the merger and the skill and speed with which it is put together.

Another strategy much canvassed at the moment is to focus the whole European trades union movement’s effort on organising new members. This approach has been adopted in the United States with startling success by the Services Employers International Union (SEIU), which has been growing rapidly against the general trend of decline and will soon have two million members. Arguments about the degree to which organising labour and recruiting new members should be central to a union’s mission have been at the heart of the split in the American unions’ umbrella organisation, the AFL-CIO. The SEIU has, regrettably, led a breakaway federation called “Change to Win”, alleging inter alia that the AFL-CIO has been insufficiently committed to the organising agenda, a charge hotly contested by the AFL-CIO.

Advocates of giving high priority to organising clearly have an important point. Unions generally channel their resources to service their existing members; few have been able to mount impressive recruitment campaigns in the new industries. Most senior trades union officers tend to come from manufacturing or public services and have little first hand experience of a service worker’s life. The traditional cultures of organising men in factories do not translate easily into organising predominantly female workforces, graduates, immigrants, and young people in hotels and shops. All these factors emphasise the need to focus more on organising.

The ETUC is working with its European member unions to build a new strategy. It is unlikely that we will go to the lengths of some of the Americans and see organising as practically the only union strategy for growth. But that will clearly be an important part of our broader strategy.

There are also other models to admire and use – the Nordic collective bargaining and flexicurity model; the Italian emphasis on the community with union officers in some ways acting rather like a local priest tending his parishioners; the Belgian and Austrian provision of excellent services to members, and in Britain the TUC’s Organising Academy – these are all ways of helping the union renaissance.

Politics are an important feature of the unions’ future. Democracy and a mass franchise is the best deal that working people ever won, and the power it gives them against ultra-liberal, pro-business measures was recently made clear in Europe when Jean-Claude Juncker, Luxembourg’s Prime Minister, famously said, “We all know what we should do. What we don’t know is how to win elections after we have done it”.

Whether it’s the unions’ recent victory over the government’s CPE youth scheme in France, the tempering of Chancellor Merkel’s original anti-union proposals for the German labour market, or the fundamental recasting of the European Commission’s Services Directive, the lessons are clear and powerful. Politics are crucial, and unions must play a big part in them.

I have been a member of the British Labour Party all my adult life, but it has been a breath of fresh air for me to escape from the atmosphere of an unhappy marriage that too often characterises relations between the unions in the UK and the Labour Party. I much prefer the scope I enjoy now of working right across the mainstream political spectrum, and not being labelled as an extension of the Socialist group. In fact, when the Bolkestein directive was killed, the centre-right EPP grouping in the European Parliament played a highly significant part, alongside the Socialists and the ETUC, in shaping the new compromise that emerged.

Our next campaign in the ETUC is to find allies who share our concern about major companies’ undue reliance on shareholder value. Corporate governance is too important to be left to hedge funds, pension funds and banks; our concern is to defend the multi-stakeholder continental European models of corporate governance against their Anglo-American counterpart. I want to progress from defence to offence on this subject. Another key and related feature of union strategy for the future is that partnership should be the trades union aim with employers – partnerships at national and European levels to influence member governments and EU policies on the labour market, on difficult problems like pensions, high unemployment and the work-life balance and partnerships to maximise productivity and the handling of change.

Yet short-term pressures on business are causing fewer employers than ever to share this commitment. They are turning away from worrying about “people” issues to concentrate more and more on their share value performance – to the detriment of their own and Europe’s long-term performance.

Similarly, too many people in government have a near-religious fixation on de-regulation and thus tend to rule out any new checks on enterprise. Yet sooner or later they will have to face the fact that members of the new executive class at the top of Big Business are becoming the new Bourbons – they learn nothing and forget nothing as the gap widens between the super-rich and the rest of us.

Unions, too, are losing some of their faith in partnerships, viewing them as “sleeping with the enemy”. I accept that partnership cannot be enforced on unwilling parties, but I believe fervently that people want to work for successful organisations, be proud of what they do and achieve and grow in their work. A class war agenda does not deliver on those objectives, or indeed on many others, although those super-rich new Bourbons are doing their best to provoke class conflict, and should not complain when it erupts.

In a sense, I want unions to recover a sense of evangelism – it’s not a word I like much, but I want the spirit of enthusiasm and campaigning to be reflected in all our work, to capture the spirit of Emile Zola in the new sweatshops of the world; not just in Europe’s services sector but in the emerging economies of Asia, South America and, hopefully, Africa.

Unions can play a big part in the future of the world, promoting a vision which, influenced by the successes of the Nordic countries, demonstrates that economically successful countries can also be fair, can have low unemployment, good welfare states and high levels of collective bargaining. Our aim must be to build states that are generous at home to their own “have-nots” and generous abroad to the developing world.