Does Union Membership Benefit Immigrant Workers in Hard Times? Evidence from Ireland
Tom Turner, Christine Cross and Michelle O’Sullivan
Introduction
Understanding labour force dynamics in the context of increasing immigration levels is an issue that is of concern to organisations, trade unions and policy makers. This is particularly true in Europe where despite the current global economic recession countries will increasingly depend on immigrant labour in the 21st century to fill vacant positions. Driving this need is a combination of demographic changes, the highly segmented labour market and differentiated economies (OECD, 2003; Hix and Noury, 2007; Finch et al. 2009). Within Europe, Ireland is an interesting case in relation to inward migration of labour. Since the late 1990s Ireland experienced rapid economic growth and a corresponding expansion in employment. These developments changed Ireland from a country of emigration to one of net immigration. Most of the inward flows can be attributed to the Irish government’s decision not to restrict entry of the 10 EU accession States in 2004. Non-Irish nationals now comprise a substantial portion of the population. While they accounted for just 2 per cent of the employed labour force in 1994, this figure reached 16 per cent by 2006, only declining to 12 per cent in 2010 during the course of the current economic recession (CSO, 2006, 2011).
A growth in immigrant workers raises important issues for trade unions. Immigrant workers tend to be more likely than national employees to work in precarious employments, characterised by lower pay, job insecurity, poor job quality and a lack of control of work tasks (McKay et al., 2011; Cranford et al., 2003; Turner and O’Sullivan, forthcoming). Such jobs can be difficult to unionise as Immigrant workers can be fearful of voicing concerns over their pay and conditions particularly where the work is insecure and there is employer hostility (Dundon et al., 2007). The possibility that immigrants will work for lower pay may be a concern to trade unions which fear that this will lead to unemployment for their members and a ‘race to the bottom’ in terms of wages (Dundon et al., 2007; Krings, 2009). These problems facing both immigrants and national workers can arguably be alleviated by immigrants joining unions and benefiting from better wages and working conditions. Immigrant workers present a potential pool of new members for trade unions that could partly stem the significant declines in membership and density. Union density has been declining across the European Union, from 27.8% in the EU27 in 2000, to 23.4% in 2008 (European Commission 2011). The fall in union membership and density has occurred in most countries but has tended to be smaller in those countries with strong social democratic parties (Schmitt and Mitukiewicz 2011). While the number of workers joining unions increased in the boom period of ‘the Celtic Tiger’ in the late 1990s nevertheless there was a steady decline in union density. Clearly the proportion of workers joining unions failed to keep pace with the expansion in the numbers employed in the labour market. Much of this decline occurred in the private sector of the economy. Union density in the private sector declined from over 40 per cent in 1990 to 22 per cent by 2008 (D’Art et al, 2013). In response to membership decline trade unions particularly in liberal market economies like Ireland have placed a greater emphasis on organising activities that target the unorganised including immigrants (Turner et al, 2011). In order to attract immigrant workers trade unions need to provide convincing evidence that membership delivers real material benefits.
This paper examines whether union membership conveys such material benefits to immigrants working in the private sector of the economy. Using the 2008 National Employment Survey, a matched survey of firms and employees, this paper examines the unionisation rates of immigrant workers and identifies whether trade union membership and collective bargaining coverage benefits immigrant workers when compared to Irish nationals (both union and non-union) in terms of wages and benefits. The paper begins with a review of the role of trade unions in the workplace followed by a discussion of the relationship between trade unions and migrant workers.
The Benefits of Union Membership
The classic definition of the function or role of trade unions is provided by the Webbs[1] as ‘a continuous association of wage-earners for the purpose of maintaining and improving the conditions of their working lives’. Workers embraced trade unions as an instrument with which to exert some influence on wage determination and check the exercise of absolute and arbitrary employer power. Collective bargaining evens up the asymmetrical power imbalance inherent in the employment relationship by increasing the market power of workers to negotiate wage raises while non-union individual workers rely on individual sources of power such as skill and expertise. Research indicates that the majority of workers join unions to improve their pay and working conditions. Union membership is attractive to the extent that it is instrumental in achieving these goals (Crouch, 1982; Waddington and Whitson, 1997). Conversely dissatisfaction with wages and conditions of employment is likely to increase the propensity of workers to regard unions more favourably (Hartley, 1992: 169-170). This instrumental role of trade unions or in Flanders (1970) terms acting in their ‘vested interest’ can be gauged with regard to the level of members’ wages and conditions relative to non-union workers. A major reason for being in a union is the extra pay or premium that accrues to members particularly in Anglo-Saxon countries[2]. In the US for example the union wage premium averaged around at least 17 per cent between 1973 and 2002 (Hirsch, 2004; Hirsch and Schumacher (2004) Blanchflower and Bryson, 2003). Data for the UK indicates a lower union wage premium that is declining over time from the mid-1990s reaching at best 10 per cent or lower by 2002 (Blanchflower and Bryson, 2004). Estimates for the wage gap in Canada for 1999 were 14.4 per cent but this falls to 7.7 per cent when the gap is adjusted for employee and workplace characteristics (Fang and Verma, 2002: 20). In the Irish case Callan and Reilly (1993) estimated a union membership mark-up of over 20 per cent for a sample of male non-agricultural workers (1167) in all sectors based on a 1987 survey of income, distribution and poverty. A comparative study of nine countries that included Ireland reported a similar wage gap (Freeman, 1994).
A second core function of trade unions is to act as a ‘sword of justice’ to ensure fairness and due process in the workplace and often in the wider society. In this role unions’ move beyond the notion that the employment relationship is a purely economic transaction where market based outcomes are viewed as fair, simply because they are produced by market exchange (Budd, 2005). Unions attempt to operate within a moral arena that calls for judgements of fairness and justice in market outcomes such as ‘a fair days pay for a fair days work’. Essentially unions negotiate the space between moral dispositions and norms and the apparent economic imperatives of a market society (Sayer, 2000). In this regard trade unions traditionally affect the shape of the pay structure by ensuring lower levels of income dispersion among union members compared to non-members (Metcalf et al, 2001; Metcalf, 1982). Unions act to reduce levels of income inequality by raising the wages of workers at the bottom of the income hierarchy and/or lowering the wages paid to the top earners (through social and political pressures). One of the most significant ways in which this is achieved is through the collective bargaining process, where employers and trade unions negotiate on pay and terms and conditions of employment for specified groups of employees (Freeman and Medoff, 1984; Hirsch, 2004; Turner, 2012). Overall, workers covered by collective bargaining arrangements tend to have higher wages, lower levels of wage inequality, better non-wage benefits, better seniority protection and better grievance systems and lower quit rates (Freeman and Medoff, 1984).
Immigrants and the Irish labour force
Immigration has been a relatively new feature in the Irish labour force. Inward flows occurred in a period of unprecedented growth in the Irish labour market. Between 1996 and 2006 the overall labour force increased by almost 50 per cent from 1.3 to 1.9 million (CSO, 2006) during the time period referred to as the ‘Celtic Tiger’. Initially this growth in jobs was filled by increased participation of women in the labour market, but latterly immigrant workers became an increasingly important source in the expansion of the labour market. Indeed, positive net migration accounts for 60 percent of the significant increase in the population between 2002 and 2006 (CSO, 2007). Figures for the allocation of PPS numbers (personal public service numbers, which are required to work in Ireland) to immigrants between 2002 and 2007 indicate that over 390,000 were from Poland alone, making the Polish group the largest group of immigrants (apart from UK immigrants) (CSO, 2008).
As noted by Dundon et al. (2007:502) two contrasting images of foreign workers in Ireland exist; the first image is that of highly skilled foreign workers who are central to Ireland’s economy and work in the information technology and computer software industries, and the second is of non-Irish national workers who are viewed as ‘a source of cheap labour, easily disposable and found in the tertiary labour market’. Paradoxically, overall, immigrants have higher mean levels of education compared to native workers (Cross and Turner, 2007). Over 26 per cent of natives report reaching only either primary or lower second level, compared to 12 per cent of immigrants, while 28 per cent of immigrants have third level qualifications compared to 20 per cent of natives (Turner, 2010). Nevertheless, immigrants particularly from the accession states tend to be predominantly employed in relatively low skill occupations in the private sector and when compared to native Irish workers are under-represented in the high skill occupations such as managers, professionals and associate professionals and over-represented in craft, personal services, plant operatives and labouring jobs (Fitzgerald, 2006: 19). Immigrant workers are twice as likely to be covered by a Joint Labour Committee (JLCs) accounting for 25 per cent of all workers covered (Turner and O’Sullivan, forthcoming). JLCs are tripartite statutory bodies with employer and union representatives that set minimum legally binding wage rates and conditions for workers where collective bargaining is poorly developed and pay relatively low such as in hotels, catering, security, contract cleaning and retail sectors.
What unions can do for immigrant workers
There is an explicit premise in much of the literature that unions are good for immigrants and can deliver significant benefits (see Milkman, 2007; Tillie, 2004; Fitzgerald and Hardy, 2010). Evidence from the US indicates that union representation substantially improves the pay and benefits received by immigrants (Schmitt, 2010). More significantly perhaps unionisation has the biggest impact on the wages and benefits of immigrant workers in the 15 lowest-wage occupations, raising wages by almost 20 per cent and more than doubling health and retirement plan coverage rates (Schmitt, 2010). Beyond the immediate instrumental and material benefits of union membership it can be argued that unions provide wider social advantages to immigrant workers. Being a member of a trade union can strengthen the role of the workplace as a mechanism for the social integration of immigrants into the host country.
When immigrants secure employment and start to participate in the work life of the host society then social integration and community involvement are likely to follow (Borjas, 1995; Putnam, 2000). Immigrants can establish social relationships with indigenous locals at the workplace facilitating cultural and economic integration (Valenta, 2008). Thus the workplace is crucial to the overall integration process of immigrants and exclusion from work is a source of more general exclusion from society. Union membership appears to increase immigrant social networks and individual social capital and is associated with higher levels of political participation (Tillie, 2004). However in this paper the focus is primarily on the instrumental benefits of union membership and representation.
Why are immigrant workers reluctant union joiners?
Despite the instrumental advantages of union representation and collective bargaining immigrant workers appear reluctant to join trade unions. A national level survey in 2005 indicated that Irish workers are almost three times more likely to be union members than their immigrant counterparts (Turner et al, 2008). At 14 per cent, union density among immigrants compares poorly with 37 per cent of Irish workers. A survey of Polish immigrant (the largest single non-Irish national group in Ireland) indicated that only 8 per cent of respondents reported being a member of a trade union (Turner et al, 2008). A number of factors suggest possible differences in union availability and union joining for immigrant workers. Union availability is extensive in the public sector where unions are accorded a high level of legitimacy and opposition is negligible; more extensive in industry than services and in large firms than small firms. Immigrant workers have less opportunity to acquire union jobs due to their limited access to highly unionised public sector jobs (Defreitas, 1993:299). Immigrants are more likely to work in low skilled jobs in the services sector and in smaller firms in the retail and construction sectors, contributing to lower unionisation levels in these sectors (Grünell and van het Kaar, 2003). Consequently, immigrant workers are less likely than Irish nationals to work in organisations with a union presence. Hence union availability is likely to be lower for immigrant workers than Irish nationals.