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6105.0 - Australian Labour Market Statistics, Apr 2004  
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Feature Article - Trade Union Membership


This article was published in the April 2004 issue of Australian Labour Market Statistics (cat. no. 6105.0).

Introduction

Trade unions are organisations that represent employees in the collective negotiation of rates of pay and conditions of employment for their members. The ABS has been producing survey estimates of the number of trade union members annually since 1992, and periodically going back to 1976. The latest results, for August 2003, are available in Employee Earnings, Benefits and Trade Union Membership (cat. no. 6310.0). Prior to 1976, estimates of trade union members were obtained from various sources, including trade unions themselves, and a series is available back to the early 1900s.


This article presents information on trade union membership focussing on a number of socio-demographic and labour force characteristics of trade union members. In this article, the trade union membership rate (also referred to as the unionisation rate) is defined as the number of trade union members expressed as a percentage of the number of employees. The analyses undertaken are an update on those from an article entitled 'Trends in Trade Union Membership', published in Australian Social Trends, 1994 (cat. no. 4102.0). An article entitled 'A century of change in the Australian labour market', published in Year Book Australia, 2001 (cat. no. 1301.0), provides historical data on trade union membership.



Changes in trade union membership rates

In August 2003 there were 1,866,700 employees who were members of a trade union, a 2% increase from August 2002. However, the number of trade union members in 2003 was 26% lower than 15 years earlier. The trade union membership rate has also declined over the same period, from 42% in 1988 to 23% in 2003. The trend away from unionisation in Australia in recent decades has also been shared internationally by countries with similar economies to Australia's.

Trade union membership rates
Graph: Trade union membership rates, 1988 to 2003



In part, the decline in trade union membership in Australia is due to changes in the composition of the labour market, with job growth tending to occur in industries (particularly in the services sector) where the trade union membership rate has always been relatively low. Conversely, there has been a decline in jobs in industries that were traditionally highly unionised, such as mining and manufacturing. Coinciding with these changes has been an increase in casual and part-time employment, both of which have tended to have lower unionisation rates.


While compositional change in the Australian labour market has contributed to some of the decline, the trade union membership rate has also fallen within individual industries and occupations, and within full-time and part-time employment groups. This general decline in trade union membership rates may reflect the substantial changes to the industrial relations environment in recent times. Since the late 1980s, the Australian industrial relations system has been characterised by more decentralised arrangements for labour-employer bargaining. The emphasis on decentralised bargaining and the opening up of both collective and individual bargaining to workers not represented by unions have reduced the role of unions in the wage negotiation process. Other changes at this time were the restriction of Federal awards to certain allowable matters, and the exclusion of union preference clauses from awards. These changes may have led to a shift in employee attitudes towards trade unions and their role in the workplace.


Industry compositional change

Between 1993 and 2003, the trade union membership rate declined in all industries. In 2003, the unionisation rate was highest in Electricity, gas and water supply, at 54%, although this was down from 72% in 1993. The lowest unionisation rate was in Agriculture, forestry and fishing, at 5% in 2003, down from 10% in 1993. The largest decrease in the trade union membership rate was in the Communication services industry, from 74% in 1993 to 31% in 2003.

Table 1, Industry of employees

1993
2003
Employees
Unionisation rate
Employees
Unionisation rate
%
%
%
%

Agriculture, forestry and fishing
2.1
10.1
2.2
5.2
Mining
1.3
55.2
0.9
29.1
Manufacturing
15.6
43.5
12.5
25.7
Electricity, gas and water supply
1.5
71.5
1.0
53.7
Construction
5.0
35.1
6.0
26.5
Wholesale trade
7.1
16.5
4.9
8.5
Retail trade
13.6
22.3
15.5
17.3
Accommodation, cafes and restaurants
4.6
21.2
5.2
8.7
Transport and storage
4.4
58.6
4.5
38.2
Communication services
1.9
73.8
1.9
31.2
Finance and insurance
4.5
44.8
4.0
18.7
Property and business services
7.7
18.8
11.6
7.0
Government administration and defence
6.3
56.4
5.0
38.4
Education
8.8
56.3
8.3
41.8
Health and community services
10.3
38.7
10.6
29.8
Cultural and recreational services
1.9
31.7
2.3
13.3
Personal and other services
3.4
38.8
3.6
28.7
Total
100.0
37.6
100.0
23.0


There were substantial changes in the industry composition of the workforce between 1993 and 2003. The Retail trade and Property and business services industries, both industries with relatively low rates of unionisation, experienced the largest increases in their shares of employment between 1993 and 2003. In contrast, the Electricity, gas and water supply and Education industries, which had the highest unionisation rates in 2003, had a smaller share of employment in 2003 than 1993.


Sectoral change

In August 2003, the trade union membership rate for public sector employees (47%) was more than double that for the private sector (18%). For both the public and private sectors, trade union membership rates declined over the period 1993 to 2003, falling from 64% for the public sector in 1993, and from 28% in the private sector.

Table 2, Sector of employees

1993
2003
Employees
Unionisation rate
Employees
Unionisation rate
%
%
%
%

Public sector
27.3
64.4
18.6
46.9
Private sector
72.7
27.5
81.4
17.7
Total
100.0
37.6
100.0
23.0


Between 1993 and 2003, the share of employees in the public sector fell from 27% to 19%. This change, in part, results from the privatisation of public enterprises, as well as from the outsourcing of activities from the public sector to the private sector.


Types of employment

In 2003, the trade union membership rate was higher for employees with leave entitlements (29%) and full-time employees (26%) than for employees without leave entitlements (9%) and part-time employees (17%). A high proportion of employees without leave entitlements work part-time (65% in 2003).

Table 3, Types of employment of employees

1993
2003
Employees
Unionisation rate
Employees
Unionisation rate
%
%
%
%

With leave entitlements
77.3
43.9
72.4
28.5
Without leave entitlements
22.7
16.0
27.6
8.6
Total
100.0
37.6
100.0
23.0
Full-time employees
75.7
42.1
70.3
25.7
Part-time employees
24.3
23.6
29.7
17.0


Between 1993 and 2003, the trade union membership rate declined for employees with and without leave entitlements, and employees working full-time and part-time. In the same period, there had also been an increase in the types of employment (without leave entitlements and part-time) that had lower rates of unionisation.


Occupations

From 1998 to 2003, the trade union membership rates declined for all occupation groups. In 2003, Intermediate production and transport workers recorded the highest trade union membership rate at 38%. The lowest trade union membership rate was 11%, for Managers and administrators and Advanced clerical and service workers.

Table 4, Occupation of employees

1998(a)
2003
Employees
Unionisation rate
Employees
Unionisation rate
%
%
%
%

Managers and administrators
5.3
13.4
5.9
11.0
Professionals
19.0
32.3
19.3
28.1
Associate professionals
9.6
23.6
11.6
17.0
Tradespersons and related workers
12.1
33.4
11.6
30.0
Advanced clerical and service workers
4.6
13.6
3.9
11.4
Intermediate clerical, sales and service workers
18.7
23.2
19.1
18.1
Intermediate production and transport workers
9.4
44.4
8.5
37.5
Elementary clerical, sales and service workers
11.1
26.0
11.2
20.8
Labourers and related workers
10.3
28.8
8.9
23.6
Total
100.0
28.1
100.0
23.0

(a) The comparison for occupation groups has been presented over a five-year period (1998 to 2003), due to changes in the occupation classification in August 1996.

The highest rate of growth in the number of employees between 1998 and 2003 occurred for Associate professionals (36%) and Managers and administrators (25%), both of which had lower than average trade union membership rates. The occupation groups with the highest trade union membership rates - Intermediate production and transport workers, and Tradespersons and related workers - experienced declines in their shares of employment.


Age and sex

In 2003, the trade union membership rate for males (24%) was slightly greater than the rate for females (22%). The lower rate for women may reflect the higher proportion of women who are employed part-time or in lowly unionised industries and occupations.


The trade union membership rate also varied between age groups. Unionisation rates were lowest for younger and older persons, who are more likely to be in casual and part-time employment.


Over the past decade, the unionisation rate has decreased for all age groups, but the rate of decrease has varied between groups. In 1993, the unionisation rate was highest for employees aged 35 to 65, whereas, in 2003, it was highest for employees aged 45 to 59. The increase in the ages at which the rate is high may indicate that there is a cohort of people who are more likely to be trade union members. That is, employees now aged 45 and over (who were aged 35 and over in 1993) may be more likely to be union members, while those who have joined the labour force more recently, since changes in the industrial relations environment have occurred, may be less likely to be members.

Trade union membership rate by age
Graph: Trade union membership rate by age group, 1993 and 2003




Compositional change

Some of the decline in the trade union membership rate over the last decade can be explained by compositional change in the Australian labour market. However, as noted earlier, unionisation rates have fallen within sector, industry and employment types, indicating that other influences were also involved.


Standardised rates have been calculated to quantify the proportion of decline that can be attributed to compositional change. For each factor of interest, the standardised rate for 2003 was calculated by applying the 2003 unionisation rates to the 1993 (base year) employee distribution. An estimate of the proportion of the decline explained by the change in composition of that factor was then calculated by taking the difference between the standardised and unstandardised rates for 2003, as a proportion of the difference between the 1993 rate and the 2003 (unstandardised) rate.

Table 5, Factor standardised trade union membership rate

2003 standardised rate(a)
Proportion of union membership decline explained by factor(b)
Factor
%
%

Industry
24.0
6.9
Sector
25.7
18.5
With/without leave entitlements
24.0
6.9
Full-time and part-time
23.6
4.1
Age
22.5
-3.4
Sex
23.1
0.7
Unstandardised
23.0
-

- nil or rounded to zero (including null cells)
(a) Standardised to 1993 composition for each factor.
(b) Proportions are not additive because of correlations between factors. Period is 1993 to 2003.

The difference between the unstandardised rate and the standardised rate for sector (2.7 percentage points) shows that the change in public/private sector composition explained 18% of the 14.6 percentage point decline in the trade union membership rate (from 37.6% to 23.0%) over the period. This was more than any of the other compositional factors included in the analysis. Changes in industry structure and the proportion of employees without leave entitlements each accounted for 7% of the decline, while changes in the proportion of employees working part-time accounted for 4% of the decline.


The changes in the age and sex structure of employees accounted for little of the decline in the trade union membership rate. In fact, the ageing of the population had a positive effect on the unionisation rate, with an increase in age groups with relatively high rates. Persons aged 45 years and over were more likely than average to be trade union members in both 1993 (42% unionisation rate) and 2003 (30%), and the proportion of employed people aged 45 and over increased from 25% in 1993 to 32% in 2003.


Overall, while compositional changes accounted for some of the decline in the trade union membership rate, most of the decrease was due to the decreasing unionisation rate within each category of employees (including within each age group, occupation and industry). At the time of the earlier analysis published in 1994, compositional changes had a much greater role in explaining the decline in trade union membership, possibly reflecting the fact that the changes to the industrial relations environment were still being introduced and their full impact had not yet been reflected in trade union membership rates.



Further information

For further information about the data analysis in this article, contact Carolyn O'Rourke, Labour Demand and Earnings Section on Canberra 02 6252 6209. For further information about the Employee Earnings, Benefits and Trade Union Membership Survey, contact Labour Force and Supplementary Surveys Section on Canberra 02 6252 7206.


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