Goodbye old Union Super Funds – Hello Glassdoor wealth building

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Workers are increasingly accessing digital platforms like Glassdoor to find information they once might have sought from a union

How the new digital economy is disrupting unions:

Workers are increasingly accessing digital platforms like Glassdoor to find information they once might have sought from a union

by Ewin Hannan  8 April 2016
Australian Financial Review

When Airtasker chief executive Tim Fung talks about the new world of work, he can see a potential paradigm shift where employees no longer expect full-time jobs or entitlements like holiday pay, sick leave or employer-funded superannuation.

“If you assume that somehow I will just have a full-time job with all these entitlements, you may have that view but I don’t necessarily think that should be the status quo,” says Fung, the serial entrepreneur whose odd-jobs digital platform has grown into a 485,000-strong army of users in just four years.

“That’s a pretty big call going into the future but temporary labour is growing 9 per cent, year-on-year, in the United States and we generally follow that principle in Australia. Businesses are going to find it hard to employ full-time people with all these entitlements and not get a payback on that. They need to be able to have that flexibility on their side.”

In their appeal to young, self-empowered workers, Fung, Airtasker and other digital start-ups are not only disrupting the local services economy, they are disrupting Australia’s union movement.

ACTU secretary Dave Oliver: "Employers are shifting a lot of the cost burden back on to the individual employees."

ACTU secretary Dave Oliver: “Employers are shifting a lot of the cost burden back on to the individual employees.” Chris Hopkins

As private sector union membership falls to a record low of 1.58 million, the number of Airtasker freelancers, dubbed “micro-entrepreneurs” by Fung, has ballooned. “There’s definitely a huge amount of people who are screaming out to make money in this way,” Fung says. “We are allowing people to flexibly increase their workload without necessarily having to switch jobs or get another-full-time job.”

DIGITAL HUNGRY MILE

Australian Council of Trade Unions secretary, Dave Oliver, says the threat from outfits like Airtasker should not be overstated as most people work in traditional businesses and 7.9 million people are employed full-time.

Unions argue that about 60 per cent of the workforce is there for them to organise, given that a quarter are casuals, 5 per cent are labour hire and independent contractors account for 9 per cent.Oliver acknowledges concern, however, at what he calls an emerging “digital hungry mile [in reference to the people who lined up for work in Sydney’s docks during the Depression] where people will be in some kind of reverse-style auction on an eBay platform bidding for parcels of work”.

“On the one hand, you have people saying fantastic, the idea of technology is going to liberate workers,” he says. “What it will do is liberate employers to shifting a lot of the cost burden back on to the individual employees so people can become freelancers. We hear about the flexibility of anywhere, anytime work, the concern is it can be everywhere, all the time.”

FACING DANGERS

Oliver says, in the past, a worker wanting information would look at the office or factory bulletin board, seek out a union, or contact a government department, but now they only need use their smartphone.

Workers are also increasingly accessing digital chat rooms and online forums to find information they once might have sought from a union. Using platforms such as Glassdoor, they can access detailed assessments by existing and former employees of companies, giving outsiders insights into remuneration, working conditions and how individual management teams operate inside a workplace. “The union movement in this country is not immune from being disrupted,” Oliver says.

He nominates The Awesome Boileys Facebook page, run by a boilermaker, where workers share information about their jobs, the latest technology, and industry trends. It has 31,000 members. “It’s a space we need to be in as well,” he says.

But the challenge posed by start-ups is just one of the many dangers facing unions. Union membership has fallen to a record low of 15 per cent of the workforce, with about only one in 10 private sector workers choosing to belong to unions.

As former ACTU assistant secretary Tim Lyons told The Australian Financial Review last year: “Worrying about the relative handful of people who work for outfits like Uber when you can’t organise millions in conventional employment relationships is like focusing on a dripping tap when there is a huge hole in your roof.”

Over recent months, union leaders have been publicly grappling with how they can arrest the historic collapse in membership. Unions have lost 140,000 members in just 12 months, with 70 per cent of those young workers. Among 15- to 19-year-olds, just 6 per cent are union members, while, on average, 8 per cent of employees younger than 25 are part of organised labour. According to Victorian Trades Hall Council secretary Luke Hilakari, the typical Australian unionist is a woman in a white-collar job in her 50s. “That reflects the changes in our economy,” he says.

Workplace academics believe this decline illustrates the union movement’s lack of penetration among workers employed in the so-called new economy. In service sectors such as information technology and financial services, union presence is almost negligible.

“Often younger workers are being sold this proposition that you can be an entrepreneur, you can be your own boss, you can have this freelance-type job,” says Anthony Forsyth, professor of workplace law at Melbourne’s RMIT University.

“That’s being fed to a group of workers who already culturally are not inclined to join unions. This younger generation are more independently minded. They don’t have the history of the strength of the union movement. To them, I think, it probably looks like an archaic institution. So it’s a massive challenge that I don’t think the union movement across the board has met.”

CYNICAL ATTITUDES

ACTU president, Ged Kearney told a closed-door meeting of 200 union officials in February that unless decisive action was taken, unions “risk moving in a very short time from national standard bearer – the movement that brought workers Medicare and universal superannuation – to national non-entity”.

The meeting was notable for the release of research confirming workers were highly cynical when approached by unions about joining up. Employees did a cost-benefit analysis and concluded services offered by unions did not merit the fees being sought.

The research was commissioned for a report written by Erik Locke, a former Victorian ALP secretary, and Chris Walton, the chief executive of Professionals Australia, a union formerly known as APESMA which represents 23,000 professionals, including engineers, scientists, managers, veterinarians, pharmacists and information technology specialists. Walton was an ACTU assistant secretary and architect of the community component of the ACTU’s Your Rights At Work campaign, which is seen as contributing to the defeat of the Howard government at the 2007 election.

For the officials interviewing the workers, it was a dispiriting exercise. First, the workers heaped scorn on the union’s name, APESMA, saying it sounded like a respiratory disease. The employees were then offered a list of services and asked whether they would pay an annual fee of $680 to access them. They wouldn’t buy the pitch.

Potential members wanted to select the services they used. As the first generation of the digital age, they expected to find most of what they wanted online for free, including information, services and networking. “The research highlighted the difficulties in organising new areas,” Locke and Walton wrote.

“The challenge is not just hostile employers and bad laws, in many areas potential members didn’t want to buy what we offered at all and for many, what we offered cost too much.”

Union membership levels are “a symptom of us not adapting rapidly enough to a changed environment which, to be fair, has galloped ahead of us,” they wrote. “The membership-decline trend will only steepen given the transformative influences of digital disruption and societal change.”

Union leaders like Hilakari have been talking recently about the need to “disrupt the disrupters”. But while the worlds of Fung and the union movement threaten to collide, they largely remain parallel universes. Fung says he has next to nothing to do with unions, beyond running occasionally into an official at a conference. “What we see at Airtasker is a genuine open marketplace,” he says.

“Where unions play a role perhaps is in businesses where it’s more one party setting the prices, or what days of the week you work, or what uniform you wear.

“The difference with Airtasker is we are creating a general freelance economy through an open marketplace. We don’t determine the price on a job. It’s the job that goes up there and it’s the workers who say, ‘Hey, I can do this job for $50, or $100 or $500’.”

Fung says Airtasker workers are split broadly across three groups: university students, 28- to 45-year-old professionals and a grey army of workers over 60. An estimated 40 per cent of users are paid an hourly rate. The average pay per hour is about $28, with $130 paid for the average task. Beyond wages, all other entitlements are the responsibility of the worker.

PRICE SETTING

To prevent a race to the bottom, Fung says, users bidding for work can’t see rival bids. Some workers earn as much as $10,000 a month, a huge group earns $5000 monthly, while some earn $100 here or there. “They know what the market rates are,” Fung says. “It’s a really good self-adjusting market rate system. People are getting paid what they need to get paid.

“It’s quite different to something like Uber where prices are set by Uber and then the drivers decide whether to accept that or not. That’s the reason for a situation where people are paid less or more than what they think they are worth.”

Given Airtasker receives a 15 per cent commission for each job, Fung says it is in the start-up’s interests that workers are well paid: “If anything, we’re incentivised to push up costs up so we make more money.”

Airtasker customers quote a price for a job but then the worker will often up-sell depending on the quality of the work. Efficient workers will perform tasks quickly; in effect, earning a higher hourly rate.

“What a union does, or could do, is create hurdles that are so big for small businesses or for individuals to purchase services that they are not going to purchase them at all,” Fung says. “I think that’s what is really dangerous when we build up a system where we say, either you pay this guy $50 an hour, or you pay him nothing and you don’t do the job.

“That’s really a kind of binary system. I think a more appropriate system is where you say, would you be happy to work for $48 an hour? Yes, I would. Great, let’s do it.

“I appreciate there needs to be controls but I think these fixed hurdles are, in principle, not a very good way of connecting the supply and demand of labour.”

Fung says he is no expert in how unions work. “One thing I am really conscious of is not being one of these idealist tech guys who from an ivory tower says, ‘They shouldn’t do it this way, they should do it another way.’ I think there was definitely a purpose for the [union movement] being created at some point in time.

“Prices will go down if fewer workers are required and more people want to work, and prices will go up if you are a great worker who can do a high-quality job who is willing to work on a Sunday.

“The only thing I would say,” Fung adds, “is that perhaps unions don’t embrace that open, flexible, incremental-type discussion.”

Original article here

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