To what extent does global competition undermine the power of trade unions?
The development of free-market economics has, since the 18th century, resulted in the spread of a set of ideas, creeds and practices all over the developed and much of the developing world. Today, the globalisation of trade, capital, technology and innovation has accelerated competitive conditions for businesses all over the world. Globalisation may be defined as the opening of markets to the forces of neoliberalism and capitalism; it is characterised by the free movement of people, talent, skills, capital (intellectual, social and economic) across international borders. All kinds of barriers have either been swept away, diffused or made obsolete by the forces of globalisation: trade barriers, subsidies, geographical boundaries, linguistic and cultural differences. Technological advancements have pulled the world closer and, in the process, affected how labour relations and worker/employer relations operate and develop. The multinational corporation as well as the public sector alike are affected by global competition.
In its essence, neo-liberalism advocates free trade, private enterprise, the free flow of capital across borders and, importantly, restrictions on the power of trade unions. These restrictions are important to study and discuss because the world today is no longer regulated by the orthodox laws of economics where supply equals demand (more or less). Instead, we witness radical inequalities and volatility in market conditions. Unemployment remains frighteningly high in many parts of Europe while many workers in parts of Asia and Africa suffer exploitation and work punishingly long hours in extremely poor conditions for a pittance.
Under such conditions, the main point of differentiation for many workers who live under precarious conditions of employment is wages. Yet, the struggle for wages and decent working conditions is a very complex scenario, depending on geographical location, bargaining power, union membership and market demand for the goods and services produced by workers. Increasingly, though, competition has been brought about, either through the movement of production (including the off-shoring of services), or by the movement of people.
In their attempt to cut costs, increase efficiency and returns for shareholders, firms are faced with difficult choices on a number of strategic, operational, logistical and human resource issues. One of the most important with regards to human resources management and planning relates to the way(s) in which firms deal with trade unions. In this essay, a number of features of the globalised economy, increased competition and labour mobility and volatility will be discussed. The focus of the paper is to consider how these features erode the influence and power of trade unions. In the process, a brief critique of what the ‘power’ of trade unions consists in will be undertaken. Finally, the essay ends with...