A Pointless Strike: How Unions Are Cutting The Branch They Are Sitting On 

The one-day All India strike by some major national trade unions today (barring the Sangh-affiliated Bharatiya Mazdoor Sangh) is an exercise in futility, despite its success in some parts of the country. The problem is not that workers do not have legitimate grievances, but to waste a day’s output and productivity to air esoteric grievances like the government’s “pro-business, anti-worker” policies is laughable. The unions are also railing against businesses which have defaulted on loans and getting away scot-free. They are also against privitisation.

It is interesting that the central trade unions, while modernising themselves in terms of using social media and other communication devices to gather support for the strike, seem unable to see the essential contradiction in what they are doing: this very technology is what affects their future and not what the government may or may not be doing to protect their interests. Those opposed to privatisation should ask themselves a simple question: if they had a choice, would they rather be working for an MTNL that has no future or a gung-ho future-facing enterprise like Reliance Jio?

It is high time unions educated themselves in Economics 1.0 and the disruptions ahead from technology.

First, it is corruption and crony capitalism that made jobs fairly stable for large segments of the working class— the privileged few who have steady incomes as opposed to the millions employed by the “unorganised” sector, which creates most of the new jobs. Whether it is the public sector or the large business groups, which is where most unions are strongest, their profits were (and often are) the result of monopoly and friendly tweaking of policies to keep inefficient businesses afloat. Workers were side beneficiaries of this crony relationship between big business and corrupt politicians since it prevented companies from closing down when they became unviable. The equation is simple: the taxpayer and the consumer funded unviable businesses, and this is what enabled unionised workers to keep their jobs when they actually had none.

Second, union refusal to accept productivity-linked incomes and flexible hiring practices has ensured that all new investments are capital-intensive rather than labour-intensive. Every increase in GDP today needs less and less labour as opposed to the situation even 10-15 years ago. The manufacturing sector no longer creates jobs, especially in sectors where unions are prevalent and governments are no longer interested in creating more public sector units for the same reason. White elephants like Air India and ‎BSNL are a drain on the exchequer and so are many of the private sector defaulters like Kingfisher Airlines and failed steel companies.

It is one thing to say the defaulters and crony capitalists must be brought to book; it is quite another to presume that workers have no responsibility in clearing up the mess. Workers and unions had, and have, a large role to play in the failure of Air India and BSNL. The reason why many public sector banks will be on life support is not only corporate robbery but overmanning in the age of ‎automation and technology.

Three, the only thing that can protect jobs is a focus on the ultimate customer. As the late management guru Peter Drucker has said, the only thing inside companies is costs; profits lie outside, with the customer, not regulators or governments or promoters. The minute employees think the customer is their employers’ problem and not theirs, their job cannot be guaranteed. When customers flee to rivals, which business can be safe enough to pay workers?‎ Who can save Air India when customers flee to Indigo?

The real threats to jobs and incomes are not business-friendly policies or anti-labour laws but globalisation, rapid automation and technology changes that disrupt existing business models. But all these are also opportunities. Which means that unions which care for the future of jobs and employment opportunities should be having a different set of demands. They can protect workers’ interests better by demanding the following:

#1: The right to skilling and constant upgradation of job knowledge at a low cost or paid for by the employer.

#2: Where job loss is inevitable, a sensible severance package that will be enough to pay for a year’s upkeep of life and limb for ‎self and family.

#3: A deal with employers where, when they are laid off, they can become sub-contractors to the same company, to the extent possible.

#4: Regular updates and information from a joint portal maintained by companies and government on where jobs will diminish and where they will expand, with information on where to acquire the skills in demand. In the age of technology, how difficult is it to tell workers by SMS that people with their skills are in demand for higher wages, or that jobs may be growing in Pune, not Mumbai or Kolkata? Labour mobility is a key element in job availability.

Just as no business is permanent in an age of technological disruption, no job is permanent too. The sooner the unions acknowledge this reality, the better they will be able to help their members.

By going on strike for things that make no commercial sense, the unions are essentially destroying jobs. They are cutting the branch on which they are sitting on.