A Tale of Two Unions

These times should be ripe for the expansion of unions. Low-paid workers are angry. The middle class sees their way of life slipping away. Yet union growth is elusive, in part, because of traditional structure says Anil Verma, labour relations expert at the University of Toronto. “Part of the inability of unions to reach out to new members relates to their own structure,” he says. “If the union movement was starting out today, it would look totally different.”

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Unions lift all wages, even non-union workers, according to urbanist Richard Florida. His research shows that low wages are greater in regions where unions are weak.

Canadians regard unions as bad medicine: good but hard to swallow. An Environics poll conducted in 2011 found that a majority of Canadians believe that unions have too much power. But then, even more believe they are necessary. “An even stronger majority also believe that unions are important and effective institutions, in terms of protecting employees’ rights in the workplace and improving working conditions for all Canadians,” reports John Lorinc in his article for The Walrus, State of the Unions.

Regardless of conflicting opinions, millions of Canadian workers –one-third of those surveyed– would love to join a union. Unions have been unable to tap into this longing.

The other face of that love/hate relationship sees unions as self-serving. Four out of five Canadians believe that unions are only concerned about their member’s welfare and care little about the poor and disadvantaged.

This is hardly news to unions but it became painfully obvious when two unions recently merged. The Canadian Auto Workers, and the Communications, Energy, and Paperworkers Union of Canada combined to form Unifor last year. In preparation for this union of unions, they hired consultants to take the pulse of the nation.

The consultants found that not just the general public, but many union members thought about their unions only when money came up during contract talks. Contrary to hard-boiled union rhetoric they spent little time dwelling on the larger question of working conditions. Unifor faced “a branding problem par excellence,” which could threaten its ability to organize and influence public policy said the consultants.

While Unifor struggles to connect with its membership and community, another union putting is returning to roots. In contrast to the established blue-collar and civil service unions across Canada, a relatively small union, UNITE HERE, is mobilizing its workforce reminiscent of union street activists of a century ago.

The union is a merger of the Union of Needletrades, Industrial, and Textile Employees (UNITE) and the Hotel Employees and Restaurant Employees International Union (HERE). They are targeting workers in the service and tourism sectors. UNITE HERE aims to improve the working conditions of immigrants, women, and visible minorities who toil in hotels and casinos.

And they’re taking it to the streets. Members organize, stage demonstrations, and confront unpleasant managers. They keep things stirred up and in the face of exploitive employers. Compared to the conventional grievance process, which attempts to resolve things in civil manner, UNITE HERE keeps workers engaged daily in workplace injustices.

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Low wages generate low-paying jobs, not a thriving economy

It makes good sense.  Instead of relying on economic theories to predict the outcomes of government policies, examine models of policies already in use.  This pragmatic approach could be a useful tool, says Fred Bienefeld, professor of economics at  Carleton University.

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Take the island state of  Mauritius, for example.  That country in the Indian Ocean has kept wages low in order to attract capital.   Such a model can yield a certain kind of success, but it is a very limited success. Mauritius has become trapped in what is effectively a low-wage cycle.  Its economic success and its economic future depend on its ability to make labour available more cheaply than its competitors. It’s a race to the bottom.

The Taiwan model, on the other hand, is based on the creation of ideas: developing the capability to generate technology and sell products that use that technology.  Ideas have a currency that exceed the value of  cheap labour.  Coupled with a strategic industrial plan, Taiwan has reaped remarkable results.

What’s instructive about Taiwan and other East Asian economies over the last 40 years is an economic transformation that is virtually unprecedented in history.  Real wages rose dramatically and their competitive edge was maintained.

Hourly wages in British Columbian are higher than the Canadian average, according to Statistics Canada.  Our average the hourly wage is $17.26, compared to $16.14 nationally.  B.C. and Ontario are the only provinces with hourly wages above the national average.

You would think that high wages would be cause for cheer.  But critics counter that B.C. unemployment is higher because of the our high wages.  They say our minimum wage is too high at $7.15 per hour, compared to Alberta at $5.90.

The assumption is that if our minimum wage was lower,  more jobs would be created.   But unemployment is lower in Alberta because the petroleum industry is booming, not because of low wages.  Evidence of that can be found in the north-east section of B.C. where the petroleum industry is also thriving and unemployment is down.

Low minimum wages may create more low paying jobs, but the effect is to spread poverty, not wealth.  More Albertans work in low paying jobs than in B.C.  — 28 per cent in Alberta compared to 19 per cent for B.C., according to a study done by Statistics Canada Labour Force Survey, 1997. Low wages generate low paying jobs, nothing else.

But, say the critics of B.C.’s high wages, Alberta is more productive.  It depends how you define productivity — and not even economists can agree on that.  A simple definition of productivity is the value of output goods divided by input costs. Under this definition, lower wages should increase efficiency.

But other costs are often overlooked, such as environmental degradation. Loss of safe water and clean air will eventually have to be paid for — usually not by those who cased it.  The problem is that we all have to eventually pay for these costs, and a definition of productivity that doesn’t include them is misleading.

Productivity is better defined as the degree to which our standard of living is improved by human effort, says  Bienefeld.  Under this definition, the value of cheap widgets produced by low paid workers would not qualify as high productivity unless the standard of living for workers is improved in the process.

Of course, Alberta is not Mauritius (although the population is approximately the same), and B.C. is not Taiwan.  But there are some lessons to be learned.  Alberta could become trapped in a low wage cycle — industry drawn to Alberta only because of low wages.

B.C. benefits from higher wages.  A low paid, skilled workforce is a restless workforce.  Skilled workers move to the highest paying jobs.   They are ready to go to the highest bidder, and take their skills with them.   High wages attract talented people who generate ideas and creative solutions to industrial and business problems.

Society also benefits by paying its less skilled workers a wage that they can live on.  High minimum wages create a workforce that is not reliant on government handouts and social assistance  to survive.  Failure to pay liveable wages creates a hidden cost that we all pay for though wasted human potential and increased crime.

Road to prosperity isn’t paved with reduced wages, labour unrest.

Maybe it’s a clever political manoeuvre.  In a recent newsletter sent to all households in B.C., the provincial Liberals suggest how they would reform government using Ireland and New Zealand as models —  countries who have shown “how we can save tax dollars by making the delivery of government services more efficient and effective.”

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The idea of reducing taxes through efficient government strikes special resonance in B.C., but that alone was not the key to the phenomenal economic growth in Ireland.  One key decision was to make all education free — no tuition fees for colleges and universities.  B.C. already has frozen tuition fees, and has one of the lowest costs for education in Canada, but it’s not free.  Do the Liberals propose to lower tuition fees further, or even make education free?

Another part of Ireland’s success is the tripartite agreement reached between government, business and labour.  The resulting labour peace and coordinated industrial strategy focusses the  Irish towards a common goal.  A government that is openly hostile to labour, as in Ontario, is a recipe for reduced productivity.  Will the Liberals establish a good  relationship with unions, as well as business?

Irish artists pay no tax.  The spin-off generated by recording groups, for example,  has increased economic activity in the recording industry.  Nelson Riis, MP, has proposed a private member’s bill that make income generated by artists, up to $30,000, tax free.  The bill has received all party support in Canada’s parliament.

Ireland’s government is now considering a “basic income” scheme in which all citizens receive an annual income, regardless of whether they are working or not.  An guaranteed universal annual income could eliminate welfare payments and provide relief for many workers (usually women) who leave  well paying jobs to care for children or elderly parents.

If the Liberals plan to implement some the Irish solutions, it could be a  clever political manoeuvre to steal the thunder of the NDP.  It has worked for the federal Liberals.  They silenced right-wing critics by implementing the policies of the Reform party. Canadians watched numbly as the feds implemented drastic cuts to health, education and welfare.  If Reform had done the same, there would have been a revolt in the land.  One way to silence political opposition is institute their policies.

Tax saving can have a disastrous effect when it is an ingredient in a different political recipe.  Just look at what happened in New Zealand.  They  swallowed the right-wing concoction whole.  Taxes were cut to the rich on the pretense of creating jobs.  Spending to education and social services were cut, as well as subsidies to farmers .  Public utilities were sold off.

The result was an increase in unemployment and despair in the countries youth.  Teen prostitution increased 800 per cent and 11,000 citizens left the country last year.  Urban crime has become a major problem.  Capital took flight as the rich took their tax cuts and invested their wealth in safer economies elsewhere.  Power outages occur in the private utilities that were unheard of in the public utility.

New Zealanders tossed out the right-wing radical government last December but repair to the damage caused will be a long time coming, and they will probably never get their utilities back.  The new prime minister, Helen Clark, has some advice to others who want to try the New Zealand experiment, “Don’t try it.  It won’t work.”

Tax reductions may be useful as part of an overall strategy of government.  But tax reductions alone, while popular, only benefit the rich.  And the Irish solution involved cooperation —  businesses  limited profits in return for a 10 per cent reduction in corporate taxes. This makes taxes only slightly less than Canada’s.  Personal taxes are approximately the same.

Do the Liberals plan to make government more efficient by reducing union jobs and weakening the labour code? If they plan is to go to war with union workers, as Alberta and Ontario have done, the result will be disastrous.  The road to prosperity in B.C. isn’t paved with reduced wages and labour unrest.

Slide in wages , not taxes, to blame for plight of middle class

If these are the good times, I don’t want to know the bad.  Somebody is making a lot of money, but it isn’t middle class Canadians.   Stock markets are soaring, economic indicators are up, but it’s the rich who are getting obscenely rich.

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Middle class Canadians are  working harder, but even with two wage earners in a family they are sinking deeper into debt.  Household debt soared alarmingly by 14 percent in the last decade, according to the Vanier Institute of the Family. Canadians vainly try to maintain a life style they once enjoyed as children when their parents were relatively well off.  They dream of a life of conspicuous consumption that they see  on American television, a life now beyond the grasp of most Canadians and Americans.

The incomes of middle class Canadians are slipping away. Family incomes dropped 6 per cent from 1989 to 1998.  This was a time in which things were supposed to be getting better — the recession of the early 1990s was over.

But try as they might, middle class Canadians are becoming  sucked towards either the extreme pole of poverty, or for a very few at the opposite end, riches.  As they struggle to live the dream, preparation for retirement is sacrificed.  Savings dropped from 10 to 1.5 per cent of after tax income.  Their lost standard of living aches like a phantom limb, a way of life permanently severed. They want answers to the aching loss in their standard of living.

An easy target of their grief is taxes — a cure promoted by the rich, who have the most to gain by tax cuts.  But taxes actually fell slightly in the 1990s, says the Vanier Institute (measured constant dollars). The Tax Revolt should be an Income Revolt, but many Canadians have bought into the mythical benefits of lower taxes.  The billions of dollars of tax reduction announced in the recent federal budget will only amount to a few hundred dollars per person, annually.

No, taxes are not the culprit in the drift towards the bottom . The main reason for the loss in standard of living is a drop in wages, which fell relative to inflation.  Unions participated in the national cause of debt reduction though lower wage demands.  Minimum wages dropped in constant dollar values.  There was a shift from permanent, well paying jobs to part time and  short-contract jobs, and a resulting loss in benefits.  More health care paid out of the employee’s pocket.

Taxes are way of keeping the poles from widening. The plight of low income families has worsened as a result of reduced transfer payments to the provinces from the federal government.  Now that we have a budgetary surplus, more money should be provided in the form of unemployment insurance, universal day care, and other transfers to low income Canadians.

As the middle class slipped into the ranks of the working poor, the poor slipped into the ranks of the destitute homeless.  This was especially true in large cities, according to the Canadian Council on Social Development.  Poverty jumped by the greatest amount in Canada’s largest cities: Montreal, Vancouver and Toronto.

The faces of the poor are easily recognized.  The greatest numbers are single mothers, followed closely by recent immigrants,  urban aboriginals, elderly women, and children.  I would have thought that in a country that loves children, Canadians would gladly pay taxes that goes to see them decently clothed, fed and sheltered.

The urban poor are soon to be joined, I suspect, by farmers abandoned by an uncaring government who is not concerned at all to see them plowed under by global free trade.  Other countries are prepared to subsidize a rural life, but the prime minister’s classic shrug seems to say, “let them eat dirt”.

If you can’t find a compelling social or moral reason why tax dollars should help the poor, think of it in practical terms.   As poor Canadians resort to crime, the cost of policing, the court systems and incarceration increases.  Think about the lost productivity of those millions of people who are not doing useful work that could benefit themselves and society as a whole.

The good times roll, it seems, to the beat of a funeral dirge.

No strike is pleasant, but at least UCC’s labour dispute was civil

While I walked the picket line last week, I had time to  think about labour relations in B.C..  I had joined some other faculty members in support of the striking CUPE  workers at UCC.  I couldn’t help but notice how civil this strike was, despite the tension that any strike creates.

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It could have been much worse. There were lots reasons why  tempers should flair:  lost instruction time for students,   lost wages for  staff and faculty, and cancellation of  social and entertainment events on campus.  But the climate was one of mutual respect.

An announcement by UCC’s president’s helped set the tone.   He said that there would be no classes since it was assumed that faculty would honour picket lines.  As a result, very few people crossed the picket line and tension was minimized.  The mood was actually cordial.  Strikers gave out passes to administrators that would allow them easy  crossing of picket lines.   One administrator brought coffee and doughnuts to the strikers.

No one likes a strike, but they are a necessary counterbalance to the power that employers have in keeping wages low.   Strikes are a weapon of last resort;  a heavy,  blunt instrument that must be wielded with great care to  minimize collateral damage.  But when a strike is the only thing left to do, at least it can be conducted in a respectful manner.  The mood of labour relations is set by the provincial government in power.

The government of B.C. has reduced labour tension by enacting legislation against the use of replacement workers  (anti-scab laws).  Employers have no reason to bargain when they can carry on business as usual through the use of replacement workers. Striking workers are understandably upset when they watch replacement workers being brought in to prolong strikes.

Frustration and anger can result in damage to property, injury and death.  For example, at a 1993 strike in Yellowknife, at the Giant goldmine, replacement workers  were bought in to keep the mine going.  9 workers who had crossed the picket line were killed by a striking worker.

The growth of unions in B.C. has increased in the last decade.  By 1998, the percentage of unionized workers in  B.C. was the second highest in Canada; surpassed only by  Newfoundland and tied with Quebec (39 and 36 per cent,  respectively).

Remarkably, as the numbers of unionized workers have been increasing in B.C. , the days lost to strikes has been  decreasing.  In the last decade, days lost due to strikes dropped 80 per cent over the previous decade to 8 days per  week (per 100,000 workers) .  Labour discontent hit a high in the previous decade, when the Social Credit government  proposed a particularly odious labour law.  286,000 workers walked of the job one day,  June 1, 1987.  Fortunately, the labour climate in B.C. has improved since then.

The government of Ontario has taken a different stance  towards its workers.  Its tactic has been to attack unions.  The government introduced legislation that removed worker rights.   Bill 7 denies the rights of agricultural, domestic and professional workers to bargain collectively and to strike.  In addition, the bill terminates organizing rights of these workers, nullifies their current collective agreements, and removes protection from anti-union  discrimination.

Some particularly bitter strikes in the Ontario education sector have attracted world attention. The International Labour Organization in Geneva ruled that the government of Ontario denied workers access to collective bargaining, terminated existing organizing rights and nullified collective agreements.  These attacks unnecessarily divide society and create a confrontational workplace.  Although unionization is lower in Ontario, lost days due to strikes is greater than in B.C..

The Ontario get-tough attitude invites an escalating feud with organized workers that threatens peace and order.   Recent action by the police union in Toronto shows how ugly things can get.  They brought in militant union activists from the United States who advised them on how to eliminate political  enemies of the union.  Activists suggest the use of police powers of investigation to dig up dirt against politicians in an attempt to eliminate them.

Hostility against workers breeds revenge and bitter retaliation.  It’s not the civil society that I envision for Canada — and it doesn’t have to be that way.