Labor power in Australia and Canada: A challenge for management

In the past two decades of the 20th century, trade union membership declined due to rising internationalization of the global economy.

November 30, 2014 23:25
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Contractor workers work at a construction site in southern Israel. (photo credit: REUTERS)

From colonial times through the mid-20th century, as Australia and Canada developed their respective economies, political movements and national personalities, the ruling British Protestant elite assumed key leadership positions in public administration, commerce and politics. However, the impact on local culture was not identical because the composition of the dominant populations differed.

Unlike Canada, the Australian working class was marked by a strong Irish Catholic presence.

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Hence, their influence grew as Australia’s working class rose to prominence through the establishment of the Australian Labor Party.

Since electoral success is a strong hint of popular support and common values, Labor’s triumphant penetration of the Australian political party system – not matched in Canada to the same degree – confirms Irish influence given the significant Irish Catholic population among the rank and file of Australian workers. Therefore, even more important than the values and attitudes of governing elites to the evolving shape of Australia’s national culture were those of the working class. The values, attitudes and prevailing cultural norms of labor exerted a profound effect on the general culture. For Canada, in contrast, the values of the elite were widely shared by key segments of the working class largely due to complementary ideological support from a broad ethnic cross-section of Canadian immigrants.

Class distinctions not only reveal particular Anglo-Celtic origins – strengthened by the culturally empowering and collectively binding force of religious identity – but also the impact of significant ideological strands of thought that appealed to these influential populations. Beyond a common thread of liberal individualism that flows through the Anglo cluster of nations, there are also reflections of collectivism derived largely from the evolving ideologies of conservatism and socialism.

Over the course of its history, Canada has proven to be a more strongly hierarchical society compared to the United States. The same appears true for Canada over Australia. While the acceptance of hierarchy is less overt in the early 21st century compared to the 1950s and 1960s when Canadian sociologist John Porter made his major analysis of Canadian social structure, it remains a strong feature of Canadian culture. Likewise, hierarchy has permeated Canadian society to a far greater extent than in Australia. Not only has it reflected obvious economic differences between wealthy and working class but has become salient during key moments in Canada’s history.

Examples include the historic political domination of English Canadians over French Canadians, of White British colonial administrators over Aboriginals, of central Canadian power concentrated in Ontario over the rest of the provinces, and of foreign powers like the United Kingdom and the United States over Canadian perceptions of national sovereignty. Similarly, the employer-employee relationship also evokes social hierarchy.

Given the rapid growth and development of trade unionism since the 19th century, similar patterns of union membership across the Western industrialized democracies might be expected. However, union densities in industrialized nations reveal widely varying levels of worker participation. Substantial differences in union density are evident when comparing, for example, Scandinavian countries to former British colonies over the second half of the 20th century. Such a comparison reveals far greater density in Sweden and Denmark than in Canada, Australia or the United States.

Contrary to Scandinavia where trade union membership has been extremely high, with figures well above 50 percent, union membership in Australia and Canada – both in excess of 35% – is in closer proximity to the general union membership trends in the United Kingdom and Ireland. Among Anglo cultures, however, the rate of union membership in the United States has been substantially lower, particularly in relation to Australia but also in comparison with neighboring Canada.

Similarly, among all English-speaking countries, collective-bargaining coverage – another measure of union strength besides union membership – has been low relative to Scandinavian, German-speaking, and southern European countries.

According to Dutch theorist Geert Hofstede, these countries each score lower on individualism compared to the Anglo group of cultures, emphasizing their greater collectivism.

But the notable exceptions among the English-speaking countries are Australia and Ireland, where rates have been significantly higher than in Canada, the United Kingdom and the United States. By the mid-1990s, Seymour Martin Lipset and Noah Meltz showed rates of collective bargaining coverage were 90% for Ireland and 65% for Australia compared to Canada’s 40%, the United Kingdom’s 47%, and the United States’ paltry 16.7%.

Studying the connection between union density and national culture, Gangaram Singh performed a statistical analysis comparing union density data with Hofstede’s cultural dimensions. Singh found strong correlations between union density and power distance and masculinity.

His results support the observation that greater union density occurs in societies lower in tolerance of power distance. While the comparison is more noticeable when cultures with very high union density (such as Denmark or Sweden) are compared with those very low (such as Thailand or the Philippines), the trend appears consistent with Australia and Canada.

Denmark and Sweden show union densities of 67.8 and 78.3, respectively, which corresponds to relatively low tolerance for power distance measured at 18 and 31. This contrasts with Thailand’s union density of 3.2, the Philippines’ 20.6, and their respective higher tolerance of power distance at 64 and 94.

Falling in between but still showing an inverse relationship is Australia’s average union density versus power distance measure of 34.6 versus 36, in contrast with Canada’s 31.0 versus 39.

Australia’s touch of collectivism is consistent with Australia’s lesser tolerance of power distance. Just as Australia’s lower tolerance of power distance relative to Canada seems strongly influenced by historic Irish sentiment, the corresponding higher union density could underscore this Celtic collectivist influence.

The significant relationship evident between union density and power distance and masculinity, Singh argues, confirms that “culture should be regarded as equally important as political or economic explanations of union density.”

In the past two decades of the 20th century, trade union membership declined due to rising internationalization of the global economy. Strike levels and national government influence over labor standards also declined in many industrialized countries, including Australia and the United Kingdom as revealed in urban density data.

Until these recent developments, why has Australia shown stronger rates of union membership than many other Anglo cluster countries? And why has Canada, despite close geographical proximity, shown higher rates than the United States?

The author, based in Canada, received his PhD in management from Macquarie University, MGSM, Australia.

He has published articles in Australian, Canadian, US, UK and Israeli academic journals. This is an extract from the author’s book, The Development of Managerial Culture: A Comparative Study of Australia and Canada (Palgrave Macmillan).

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