Utopia, you are standing in it!

At a Parliamentary select committee this morning, a Labour and a Green MP were convinced that the labour’s falling share of GDP was evidence of rising profits to capital because of a loss of union bargaining power.

Instead, in the USA, where the data is best analysed, this decline in the gross labour share is a statistical illusion bought on by a greater part of GDP going to depreciation of ICT equipment which depreciates faster than in the past. The decline in the gross labour share does not mean the capitalists are sharing more of the total left. As Benjamin Bridgman said

US labor share has been falling since the 1970s. I show that it has not fallen as much once items that do not add to capital, depreciation and production taxes, are netted out. Recent net labor share is within its historical range, whereas gross share is at its lowest level. This effect holds for other high-income economies. The overall picture is no longer one of unprecedented, globally declining labor share. Using gross share as a proxy for net share can give misleading results. US gross share and inequality are correlated, whereas net share, the correct measure, is not.

From https://www.vox.com/2015/1/8/7511281/labor-share-income

https://www.washingtonpost.com/posteverything/wp/2016/02/17/yes-the-robots-will-steal-our-jobs-and-thats-fine/?utm_term=.b095f95cb97b

The only reason I joined a union at the Department of Labour was pay rises under the collective agreement were conditional upon union membership. They even ran a membership drive every time they negotiated a rise. Indeed, I might have joined up after the first of those membership drives.

I wish the Employment Relations Amendment Bill was in effect back then because it would have saved me a couple of hundred dollars a year. I would have started on the union wage at least and had no obligation to join the union to benefit from all the conditions they negotiated in the past. The amending bill inserts a new clause that says with regard to individual employment agreements that

No term or condition of employment may be expressed to alter automatically after the 30-day period in a way that makes it inconsistent with the collective agreement.

This new amendment requires all employees to start on the collective agreement terms for the first 30 days of their employment. You always start on the union rates. In the past, people could opt in to the union agreement. Now they can opt out but can keep all the benefits of that union agreement while not having to pay a union membership fee.

There is no incentive to join the union because nothing they offer you in terms of pay is conditional on continuing union membership. No employer offers less than the union pay and may wish to offer more to particularly appealing recruits without passing that pay rise on to the rest of the workforce.

I would join the union in the future if they delivered a pay rise that was not available to those on individual employment agreements. But I have no incentive to join the union prior to that time. I can keep my money.

Cartels usually want the cartel price to extend to all in the industry. Unions are different because they must collect fees from employees to pay their rent and meet their payroll. They need to have members to survive because unions are funded by membership fees. For them, compulsory union membership is all about the cash.

The unions seem to want to head in the same direction as France where about 10% of the French workforce are members are unions despite 90% of workers being covered by collective agreements. I do not know how French unions pay their bills because no one has an incentive to join a union if the union pay and conditions apply anyway.

If I was an employer, I would point out to an employee that they have no need to join the union because they already get all the union conditions and should save their money until the union delivers something more than they have now.

Unions want this amendment as a way of winning members. It backfires because the union conditions of employment are not conditional on union membership so no one has any reason to join the union unless they deliver more in the future. Save your union fee until you get something concrete in return for it in the future.

Unions can collect bargaining fees provided a workplace agrees to it in a secret ballot under the current law. I would certainly vote against a bargaining fee in that secret ballot.

The 2017 Labour Party manifesto does go on about the need for union won wage rises to be passed on to everyone in the industry. I am all for that if I was in that industry especially if I do not have to pay any union fees to get the pay rise.

Why join a union if none of its current benefits are conditional on union membership? Wait until they offer you something specific in the future before you part with your union fee. What have you done for me lately is the decision rule.

If unions want to unionise a new workplace, just wait and see whether they deliver a pay rise before joining them. Freeride for as long as you can. There is no incentive for new employees to join that union until they win another pay rise.

Maybe I should have delayed posting this until after the Bill was passed so that there is no time for last-minute amendments. But then again, the unions have blocked me on Twitter so maybe they will never find out.