Trade unions should embrace the economic reality and focus more on sustainability

Once upon a time, in a 13th century village in England, there was a peasant who bred a hen that laid golden eggs. Everyday, the hen laid one golden egg. After years, relying on the wealth from the golden eggs, the peasant was able to afford a small establishment of his own.

One day, the peasant woke up with a dream. In this dream, a hollow voice asked him: “why does my hen produce only one golden egg per day?” The whole village being illiterate, he had nothing but his own knowledge and intelligence to rely on. At the end of the day, the only explanation he reached was that there must be a large chunk of gold inside the hen’s stomach; and the gold must chip off a little bit every time the hen lays an egg.

Another more sinister thought promptly followed: “wouldn’t it be much more convenient to just kill the hen and take the gold out; instead of having to wait for the gold to come out every day?” He first rejected the idea, but eventually gave in. What kind of moron would say no to a large chunk of gold?

Right before sunset, he went into the chicken shed with his knife in his right hand, and closed the door behind him. After seeing the peasant with the knife, it was obvious to the hen that this was her final moment. With the hen’s body still bleeding, the peasant wasted no time to start his search for the treasure. He carefully inspected every organ of the hen again and again with no result. With the hen dead, there was no more golden egg, and without the revenue from the golden eggs, he soon lost everything and lived a miserable life.

Months later, the news of the first crusade reached the village. He signed up for the journey. And like many others who could neither afford armor or a horse, he died in misery and bitterness somewhere on the way to Jerusalem.

It seems clear to the author of this article that the same story is repeated in the current Australian industrial relation system. The Australian Manufacturing Workers Union (AMWU) constantly demanded better wages and conditions, even when (as in the cases of Toyota and GM Holden) the employers have been making substantial losses every year. The union’s relentless push for better conditions, analogous to the peasant’s unsatisfied appetite for more golden eggs, was a main factor causing the planned departure of Toyota and GM Holden. In the case of Toyota, the AMWU managed not only to bargain a 7.75% wage increase from September 2011 to April 2013 [page 56, Toyota’s Enterprise Agreement]; but also various entitlements including “height allowance”; “confined space allowance”; “dirt money”; “first-aid allowance”; “income protection insurance” and the like [page 58-63, Toyota’s Enterprise Agreement].

This author could no longer tolerate “rogue” unions (as former Labor MP Martin Ferguson correctly pointed out) refusing to wake up, embrace the reality, and work co-operatively with the employers to keep the business alive. It is the honest workers who are the biggest losers at the end. The closure of plants means substantial losses for multinationals like Toyota and General Motors (which could soon be recovered elsewhere); it means less union density and therefore less power for the AMWU in the region (something which matters little). For the workers, their lives were totally ruined by the closure. Not only have their delusional chunks of gold promised by the unions evaporated, they find themselves – having solely specialized in automobile assembly for their entire life – too old to compete in another industry. Even worse, some of them may even default on their mortgages and have nowhere to live.

How could Toyota possibly agree to a pay rise when the company has been in such financial difficulty? The answer is rather obvious. The only alternative Toyota had was an enduring strike which halted its production and lead to huge losses. The AMWU is a tough opponent. And its toughness is reflected not just by its intimidating tactics towards the employers, but also (rather shockingly) by its intimidation of its own members. For example, during the strike of Toyota workers in September 2011, an open letter directed to workers who attended work on the strike day (400 out of 3300) emerged in public. The letter conveyed, among other things, the following rather disturbing message: “You are classed as a FUCKING SCAB. You are the lowest of the low. We know who you are; we know what car you drive; we know where you live…SCABS DO NOT GO AGAINST THE MAJORITY.” Such language of intimidation suggests that this was a union, similar to the peasant in the fairy tale, with nobody else but itself in mind. It neither cared about sustainability nor for the business reality. It didn’t even care about the interests of its own members. Indeed, facing such a fierce opponent, Toyota’s Australian manufacturing operation’s fate was sealed even before the battle started.

The peasant in the fairy tale had valid excuses for his stupidity. He lived in the Dark Ages when there was no opportunity for him to be educated and/or rational. Where are the excuses for the unions’ blind push for better pay, which eventually caused its members to lose everything? The unions, unlike the peasant in the fairy tale, could easily expose themselves to warnings and advice. And many experts in the field have warned that wages in some sectors were not sustainable. However, what’s the use of all this, when the unions refused to listen? Indeed, the unions have been living in their daydream for far too long, and now it is time for them to wake up, look at the reality, and work co-operatively with the employers to reach an agreement which is sustainable. Paul Howes, the Australian Workers Union’s National Secretary made a speech in early February this year, which urged unions to face the economic reality, to make concessions and to focus on sustainability, which was a step in the right direction. However, to avoid the gloomy prospect like that in the fairy tale, a structural reform of our industrial relation system is urgently needed.