Future of labor unions in Industrial Revolution 4.0

There is no need to waste time discussing whether Industrial Revolution 4.0 provides advantages or detriments for workers because, whatever the answer, the conclusion is clear that workers and trade unions must adapt innovatively to prevent them from being eliminated by industrial disruption 4.0.

As Andy Haldane, the chief economist of a British bank, said when he was invited to speak at the British Trade Union Congress in November 2015, every industrial revolution always begins with the same concern, namely machines would replace human power and give birth to massive unemployment.

However, history proves that concern never happens. Workers even experienced increases in real wages 15 to 100 times since the last revolution. From the graphed data compiled by Haldane, it is evident that there are three facts in regards to fundamental economic development.

The three facts are: (i) In the long run, technological development would continue to be the main factor that determines economic growth; (ii) since the first Industrial Revolution (1770 to 1830) to the present, technological development has created more jobs than it has eliminated; (iii) the transition to increasingly complex production systems has turned out to lead to growth in work productivity, wage increases and a sharp decline in working hours.

Substitution effect versus compensation effect

There are two things that influence how machines relate to workers, namely substitution effects and compensation effects. Thus far, pure economists only see the dimensions of the substitution effect, namely the substitution of labor by mechanical power. This is a wrong view because this partial perspective only expresses the negative factors, but does not see the positive compensation effect.

As a result of efficiency, the prices of goods and services are getting cheaper; in general there is an increase in incomes, driving up demand for goods and new services and the emergence of new industries to meet existing demand. The disappearance of previous jobs would be compensated by the birth of new jobs, which would reduce unemployment. Apart from the effects of compensation above, the Industrial Revolution 4.0 also gives birth to a new sector that grows bigger, called the third sector. The third sector does not deal with public or private entities, but rather institutions like charities, volunteer and non-profit organizations and civil societies. This type of volunteer work grows outside the format of labor and employer relations. This was written in the 2016 World Economic Forum (WEF) research report entitled The Future of Jobs.

The WEF research confirms that there would be disruption to work by the Industrial Revolution 4.0. Nevertheless, its effect is not uniform, but varies according to the type of industry, region and country. The Industrial Revolution 4.0 contributes to developments in the fields of genetics, artificial intelligence, robotics, three-dimensional printing, biotechnology and others. All of this would be the foundation for a more comprehensive revolution than what we have seen previously.

Trade union innovation and adaptation

With optimism about the emergence of more new jobs that are more human (being able to work from home, being able to get double the income from several activities), proactive adaptation is a necessity for avoiding the threat of extinction. Although not widely discussed, the Industrial Revolution 4.0 is not only threatening the employment, but also the future of many potentially endangered institutions, especially organizations that have a mission to represent the aspirations of the community, since the current technology system can more quickly and accurately convey aspirations to the parties holding power or company leaders.

For example, a person can communicate more quickly with President Joko Widodo through social media accounts owned by the President rather than through formal channels of political parties or organizational correspondence. A laborer does not need to report to the trade union in filing a complaint because they can use social media channels by directly contacting the social media accounts owned by the labor inspector of the Manpower Ministry, reporting to the President\'s Instagram, reporting to the Ombudsman or consumer protection agency, or contacting the company owners directly.

Trade unions cannot exist by merely conducting conventional roles. Adaptation, innovation and thinking out the box are a must.

The work disruption characterized by the increase of the number of workers without employers, or what is called a sharing-economy, would be a serious threat to trade unions in retaining their members. Types of work such as Go-Jek driving, online businesses, profit-sharing businesses and subsequent self-employment would continue to grow without the need for association.

This type of work is different from conventional work. They do not need a bipartite working relationship, a characteristic of individual work, and are far from industrial relations conflicts. Thus, there is no need for advocacy, bipartite negotiations, industrial relations courts and minimum wage demands. Changes in the format of the labor movement become a necessity, or punishable by extinction.

So far, members of trade unions have traditionally been manufacturing industry workers, followed by those in the transportation and agricultural sectors. Meanwhile, the sector that has the least number of members in trade unions is the service sector, especially self-employed workers. Government statistics confirm this fact. According to Statistics Indonesia\'s data, the number of workers in the service sector in 2015 was still 60,495,406 and that grew to 69,319,636 people in October 2018. There was an increase of nearly 10 million people within four years. Meanwhile, the employment of workers in other sectors continued to decline.

The transformation of the movement for trade unions is done by changing the advocacy approach to a benefits approach. It does not mean that advocacy activities are neglected, but they are no longer the main core of the movement. Why is it so? Because workers do not only need defense or advocacy, but the more important thing is to get job certainty. This job certainty can be obtained by increasing labor competence. Providing diverse benefits with the impact of ensuring sustainable long-term work would make trade unions in high demand.

For example, by being involved in vocational training in job training to improve competency and expertise (upgrading and upskilling), rather than continuing to demand the government provide

training, preferably while waiting, it is not wrong to take the initiative. Several trade unions in other countries have begun to do so, including the Federation of Korean Trade Unions (FKTU) that the author recently visited. FKTU provides training scholarships for members who need skill adjustment training.

Government focus

The government itself needs to focus on STEM education (science, technology, engineering and mathematics) and increase social security in the unemployment scheme. Business people are required to work with various vocational schools so that the issue of miss-matched education and labor markets does not continue to occur. Then, trade unions are involved in providing vocations to their members. This includes working with international trade unions to supply workers to countries that need their expertise.

Japan, for example, at present requires people from Indonesia to work in the formal sector, but our workers do not have the qualifications. Actually, the standard qualification required is only to master the Japanese language, which can be learned in six months.

The current technological revolution does not need to be considered a race between humans and machines, but as an opportunity for workers to develop their full potential with the help of technology. (Rekson Silaban, Analyst, Indonesian Labor Institute)