Central trade unions signed their own death warrants by calling for all-India strike

The one-day strike called by 10 central unions today (2 September) should be seen as the last gasp of an irrelevant left-wing ideology. The unions backing the strike are clearly driven by political considerations rather than workers’ interests. One of the largest unions, the Bharatiya Mazdoor Sangh (BMS), is not a part of it. Despite its Sangh association, the BMS is no government lackey rushing to do its bidding. So its opt-out sends its own message on the strike’s irrelevance.

Before the strike the BMS was trying to drive a hard bargain with the government, and, according to Labour Minister Bandaru Dattatreya, nine of the 12 main demands of the unions had either been conceded in principle or were close to agreement. So the strike is actually a pure Congress-Left affair that can only prove their ultimate impotence to influence policy.

The problem with unionism in India is that it has not kept up with the changes in the economy. The old world of the shopfloor is shrinking, as most economies depend on knowledge and skills to derive competitive advantage. Growth is driven by services, not agriculture and manufacturing. Today, not only companies, but countries also compete.

It is not possible for countries to protect workers as they have to be flexible enough to attract investment. Barriers to trade and competition are falling, and competitive advantage can be temporary and fleeting. In this scenario, workers cannot demand eternal protection and certainties on incomes and career growth. But unions are stuck in the old paradigm. They are old generals fighting the previous war.

Does the new economy make unions redundant? Absolutely not. We still need workers interests to be protected as individual workers cannot counterbalance the power of business. But unions have to fight for different things today from what they were fighting for before.

For example, in an economy where yesterday’s monopoly can be reduced to a loss-making carcass, should workers be demanding security of lifetime jobs or regular investments in upskilling? Should the unions be demanding more fish or the ability to catch more fish?

Secondly, should unions be opposing privatisation or seeking a safety cushion against arbitrary downsizing in companies to be privatised - including the right to be retrained and offered alternative job placements within a reasonable span of time? Can public sector unionism help Air India survive without endless taxpayer handouts? Can a Bharat Sanchar Nigam Limited be profitable with its bloated workforce? Can a loss-making public sector electricity sector ever ensure low-cost power that is the key to more growth and jobs? Overmanning temporarily bloats union power while ensuring that all future jobs are created outside the organised sector.

Thirdly, should unions be campaigning for an end to contract labour or better compensation and benefits for them? Today, contract workers hold the keys to the survival of many manufacturing units, and making all workers permanent is the surest way to ensure more automation in manufacturing in future. Which means less semi-skilled jobs.

Fourth, today union power is concentrated in the public sector - but the public sector has never been more irrelevant to the country’s or customer’s needs. If the unions want to retain their clout, they need to make public sector units financially strong, not weaker. Take the example of the bank unions which are supporting today’s strike. I don’t need the State Bank of India to get my banking jobs done any more. I can get my work done faster, if not better, with any private sector bank. If I want a mobile phone, the chances are I will not go to a BSNL or MTNL for a connection. I seldom use Air India for air travel, and, but for the public sector electricity discom monopoly, I would probably use a private power supplier for my needs. At the very least it would send me bills in a language I understand.

The unions should ask themselves: who really, really needs the public sector anymore? And if they want the public sector to survive, they should ask themselves another simple question: are workers’ jobs best protected in a public sector that is productive and profitable, or when it becomes a bleeding ulcer like Air India?

The unions, if they have the stomach for it, should ask themselves another question: should they be batting for self-serving causes or also be fighting on the same side as consumers? They should remember that India has 1.25 billion consumers but only a few million employees in the organised sector. Should they be seeking the support of 100 percent of the population or the two percent of Indians who happen to have a cushy organised sector job with all benefits.

The consumer versus unions argument was best illustrated in another strike yesterday (1 September) in Mumbai - by the kaali-peeli taximen’s union which took taxis off the road to protest against competition from app-based taxi aggregators like Uber and Ola. Kaali-peelis went off the road, but no taxi user was amused. While the aggregators did good business, citizens were reminded yet again why kaali-peelis were not consumer-friendly or dependable. The app-based taxi companies have one simple consumer-friendly USP - cabbies cannot refuse a ride if a cab is free at any point of time.

The kaali-peelis have already lost the war. They should in fact shift allegiance to app-based aggregators and benefit from the increased incomes. By listening to the politically-affiliated unions, they have written their own death warrant.

India’s unions have a choice; they can choose to really help the working classes they claim to represent by helping them to adjust to the new realities or play undertakers to the idea of unionism in general. The working class will move on to improve its lot - as the drivers running app-based taxi services have done - leaving unions in the dust.