Unions perform multiple economically valuable functions… Richard B. Freeman IN times of erosion of trust in our institutions parliament, the judiciary, army and the state it is challenging to talk about labour unions struggling on the fringes for decades and held in low esteem by our elite and in mass opinion. But it is worthwhile to reiterate that unions are an important component of labour market institutions tasked with functions essential for a just and sustainable economy.
The role of unions in reducing inequality is well documented: research indicates that countries with a high density of unionised labour have lower levels of inequality. Unions increase wages for the poorest 35 per cent while decreasing them for the top 20pc. A study in the US showed that the absence of unions lowered the wages of middle-wage earners but did not have much impact on high-wage earners, and thus increased wage inequality between the two groups. Another study revealed that unionisation among low-wage jobs in hospitality, healthcare and janitorial services led the workers` earnings to the level of living wages.
Wage negotiations is just one function: unions act as an intermediary between workers and management to improve work conditions, increase productivity, protect employment and facilitate the creation of new jobs. Evidence suggests that unions contribute to a higher level of job satisfaction, reduce absenteeism and improve workers` loyalty to the firm.
Sadly, in Pakistan, unions have been painted black and sidelined through various means and tactics. Unions` positive functions have seldom been highlighted or efforts made to address their internal weaknesses and the external challenges they face. Currently, union density is estimated to be less than 1pc. In the organised industrial sector, independent plant-level unions are generally found in MNCs. National industrial units and local enterprises discourage genuine representation and tend to bust unions, maintaining `pocket` unions to pretend compliance.
Union workers confront violence, arbitrary dismissals and false criminal cases registered against them by the management. No wonderPakistan is ranked as one of the worst countries in the world to work in by the Global Rights Index 2022, with a bottom rating of five (`No Guarantee of Rights`) on a scale of one to five.
In a recent research study, based on primary data undertaken by The Knowledge Forum, a local research initiative, and the FES, a nonprofit German foundation, trade unions in Pakistan linked the fall of unions to the creation of labour wings of political parties. According to the unions, political parties exploited trade unions and caused divisions among workers based on political party affiliations, eventually leading to linguistic and sectarian divides. `The ruling political party supports its union … which eventually becomes the CBA [Collective Bargaining Agent]. So, support for general labour has practically ended,` the report said.
The erosion of unions is attributed to a number of factors both external (for example, global transformation of production, structural changes in the economy, government policies, restrictive labour legislation and expansion of the informal sector) and internal (such as ethnic division, and weak, visionless and overaged leadership). Formal trade unions have lost membership and financial strength and have failed to respond to the changing needs of the country`s workforce young, informal, contractual, exposed to modern issues and perspectives, though still less equipped in education and skills. In the informal sector, few sectoral labour movements (including Lady Health Workers, power-loom workers, etc) have made an impact and are active.
Since the Covid-19 pandemic, a surge in union activities has been noticed across the globe. In Pakistan too, union federations connected with unionised and non-unionised workers, linked up the latter with relief programmes and helped them access entitlements and dues from employers. According to 2021 global research findings, unions` facilitating social dialogue between workers and employers led to a 26pc increase in their membership. The pandemic brought inequality and unjust work conditions into sharp focus in many sectors, leading to a rise in mobilisation of knowledge workers (that is, university teachers, doctors, IT personnel, etc) in devel-oped economies. In view of the increasing number of strikes in the US, Canada, the UK, France and elsewhere, employers are gearing up for a rethink on how can they build effective relations with unions to avoid disruptions at work caused by strikes.
For enhanced productivity, management gurus are advising employers to treat unions as key stakeholders in business, understand employees`interests and develop a working relationship with workers` representatives. In our milieu, the mindset of local industrialists is parochial and patronising. Factory owners and management (their offspring and relatives) generally look down upon workers as inferior beings who are lazy and out to cheat them. Workers need to be treated with dignity and as important (if not equal) partners in work/business process.
Unions need to overhaul their structure, devise innovative strategies to expand and extend membership to informal, contractual and young workers, and most importantly, ensure democratic internal governance (ie the setting of rules, holding elections). The education, training and skill development of workers is an area neglected by our unions. Besides organisational training and education in labour laws, unions need to link up with training providers for skill enhancement.
It is good news that recently, local labour federations and resource centres launched a project in Karachi, Faisalabad and Lahore, in collaboration with the international human rights law and development initiative, the Global Rights Compliance, to build capacity, and provide legal training and advocacy tools to workers` organisations seeking accountability for labour rights violations in Pakistan`s garment and textile sector.
The government must acknowledge the role of trade unions as an important labour market institution. It is time the state lifted curbs on the rights of association and collective bargaining, eased the process of registration of unions, treated workers` representation with respect, overhauled labour departments and gave due priority to labour. The wnter is a researcher in the development sector.