Tagged: unions
District 12
I saw The Hunger Games a few days ago. It was okay. A bit clichéd. In the movie/book, the protagonist Katniss Everdeen comes from “District 12″ which is strongly alluded to be in the Appalachians. Like the rest of the Districts in the fictional far-future nation of Panem, the coal-producing District 12 is ruled with an iron fist by the “Capitol” via violent intimidation and a deliberate policy of keeping the inhabitants impoverished. Erik Loomis has more:
They rule District 12 like a fiefdom, murdering resistance organizers and forcing workers into generations of endemic poverty. Panem uses prisoners as slave labor, leading to major labor uprisings. District 12 erupted into war after workers, tired of decades of oppression, took up arms when a sympathetic guardian was murdered by Capitol agents; over 100 residents were murdered in the weeks to follow. Thousands of miners, whose labors fuel the lavish lifestyle of the Capitol, die of black lung disease.
Oh wait…my mistake, that’s a description of conditions in the real-world Appalachians a few generations ago. Only slightly altered.
The past. And possible future.
Corporations, unions, and political donations
The Washington Post’s Ezra Klein makes a good point – you can’t criticize the political donations of unions on the grounds they are contributing to those they negotiate with without levelling the same charge at corporations. And he provides some useful numbers. American numbers, but even with the Federal Accountability Act, even with a higher union density rate in Canada, Canadian corporations still outspend Canadian unions in the political sphere by the same almost exponential degree:
But the same goes for corporations. The income of many corporations — Boeing is a good example — depend on government contracts. Tax policy is also important when it comes to setting take-home pay. Then there are rules, regulations, bailouts, backstops, and all the other ways that the government helps structure and shape the economy. And “through gigantic campaign contributions and overall clout,” corporations “have enormous influence over who gets to bargain with them.” And in the aggregate, of course, the business community spends much more than the unions — in 2010, business groups spent $1.3 billion, while unions spent $93 million.
It’s simply no contest.
The incredible greed of the public sector worker…
The incredible greed of the public sector worker…Jon Stewart is on the case.
Guess who said this?
If not unions, what force will ensure that the benefits of future prosperity are shared by all, not hoarded by a few? …
The Fraser Institute B Team
The Vancouver Sun has once again out-sourced an editorial to the Calgary Herald who have once again out-sourced their material to the Frontier Centre for Public Policy, whom I have talked about before. The editorial in question is “Civil servants paid too much” but before we get into it, let’s start with this:
The Frontier Centre, an independent think-tank
Right. It might be “independent” but it’s clearly not ideology-free. As I pointed out in my earlier entry, someone at the FCPP told Google to include this description when indexed:
As for independence, it’s sources of funding are opaque, 74% coming from unnamed foundations, etc. One is beginning to wonder if the Fraser Institute has become so discredited that they have to go with the junior team. Anyway, here is the actual FCPP report Public Administration Wage Growth. The gist:
Over the course of the past decade, wage growth for public administration workers has dramatically outstripped wage growth in the rest of the economy.
The first thing I always wonder with these sorts of things is are we getting a true apples to apples comparison. The public sector statistically employs a more highly educated workforce. Study author Ben Eisen mentions this, but then gives the game away:
this backgrounder does not seek to compare public servants to equivalently skilled and experienced private sector workers to determine the size of the current pay premium.
Furthermore…
Instead, this paper presents data showing that the rate of wage growth for provincial and federal public administration workers is unique among the twenty major industries tracked by Statistics Canada.
Ah. One of the keys, of course, is what 20 industries are chosen. The other key is the FCPP report is measuring growth of compensation and is not comparing actual compensation levels b/w public and private equivalents.
It certainly strikes me that, of the 20 industries, only 4 are actually comparable: Federal public administration, Provincial public administration, Local public administration and Management of companies and enterprises. Note, the FCPP is comparing public sector workers in charge of “administration, oversight and management of public programs”. IE. High skilled/high responsibility workers or, as the FCPP dubs them, “bureaucrats” and not other public sector workers like labourers. In that regard Federal/Provincial bureaucrats wages went up 59%/55%, while Local bureaucrats and Private sector managers went up 33%.
But from what? Where’s the context? What if Fed/Prov bureaucrats are catching up to the their private sector counterparts? There is significant evidence that bureaucrats were and still are underpaid compared to equivalent positions in the private sector. See here, here and here. The whole thing strikes me as ridiculous.
This backgrounder also examines Statistics Canada data to quantify how much money would have been saved by taxpayers if federal and provincial public administration wage growth had merely matched wage growth in industries with the next highest rate of wage growth in the economy behind public administration.
The next highest rate of wage growth in the 20 industries cited is real estate. What, pray tell, is the utility of measuring the growth rate of compensation of realtors and bureaucrats?
Eisen attributes the “high rate of growth” to “union influence” and “rent seeking”. Ok. Here’s an interesting factoid: The United States has a public sector unionization rate of 29% and expenditures for all levels of government on goods and services amounts to 20.6% of GDP. In Canada, the public sector unionization rate is 71% while government expenditures is…21.2% of GDP. That’s a difference of 0.6%. Furthermore, up until this year the Canadian federal government (and many provinces) had been running surpluses since the mid 1990s – this despite the alleged “growth” of public sector wages. I’m not certain about other provinces, but in British Columbia municipalities are required to balance their budgets by law.
In determining whether “civil servants are paid too much”, this study is rather useless. Of course, Barbara Yaffe is right in there.
The Union exception…
Every single human institution or organization of any size has its bad points. Corporations certainly do. The military does. Organized religion does. Academia does. The media does. The financial industry sure as hell does. But with the exception of a few extremists here and there, nobody uses this as an excuse to suggest that these institutions are hopelessly corrupt and should cease existing. Rather, it’s used as fodder for regulatory proposals or as an argument that every right-thinking person should fight these institutions on some particular issue. Corporations should or shouldn’t be rewarded for outsourcing jobs. Academics do or don’t deserve more state funding. The financial industry should or shouldn’t be required to trade credit derivatives on public exchanges.
Unions are the most common big exception to this rule.
That’s exactly right. No other institution is subjected to the standards unions are in the public discourse. And that’s by design. The opposition to unions is not economic, it’s political.
Of course unions have pathologies. Every big human institution does. And anyone who thinks they’re on the wrong side of an issue should fight it out with them. But unions are also the only large-scale movement left in America that persistently acts as a countervailing power against corporate power. They’re the only large-scale movement left that persistently acts in the economic interests of the middle class.
Once again, that completely jives with my own views. I will have more on this in the local context later.
Unions and economic equalitarianism
Kevin Drum, on the virtues of labour unions:
Unions have lots of pathologies: they can get entranced by implementing insane work rules, they can get co-opted by other political actors, and they can end up fighting progress on social issues, just to name a few. But they fight for economic egalitarianism, and they’re the only institution in history that’s ever done that successfully on a sustained basis. That’s what makes them so indispensable to liberalism and that’s what makes them the sworn enemies of conservatism.
You just can’t pull labor and full employment apart. It’s not a matter of emphasis. A country without a strong labor movement is almost inevitably one in which economic and political power is overwhelmingly on the side of business interests and rich people, and that means you’re not going to have sustained full employment because that’s not what business interests and rich people want.
Can’t really add much to that.
Link of the Day: Restoring balance
From a study published by the hardened communists of the International Monetary Fund [pdf]:
This nexus was prominent prior to both the Great Depression and the recent crisis. In our model it arises as a result of increases in the bargaining power of high income households. The key mechanism, reflected in a rapid growth in the size of the financial sector, is the recycling of part of the additional income gained by high income households back to the rest of the population by way of loans, thereby allowing the latter to sustain consumption levels, at least for a while. But without the prospect of a recovery in the incomes of poor and middle income households over a reasonable time horizon, the inevitable result is that loans keep growing, and therefore so does leverage and the probability of a major crisis that, in the real world, typically also has severe implications for the real economy. More importantly, unless loan defaults in a crisis are extremely large by historical standards, and unless the accompanying real contraction is very small, the effect on leverage and therefore on the probability of a further crisis is quite limited. By contrast, restoration of poor and middle income households’ bargaining power can be very effective, leading to the prospect of a sustained reduction in leverage that should reduce the probability of a further crisis.
Where have you gone, Norma Rae?
Update: It’s more a link of the day, than a quote.
California Dreamin’
I’m not sure what point Mike Klassen is trying to make with this blog post. He cites approvingly Steve Malanga’s article “The Beholden State: How public-sector unions broke California”. Ok, fine. But then he immediately undermines [that right-wing talking point] with:
It should be pointed out that to the great credit of BC’s largest public sector unions – the BCGEU, CUPE and the HEU – the Government of BC has signed “net zero” contracts for the next two years. That’s sixty percent of the labour agreements in the Province. The previous Minister of Finance Carol Taylor was heralded for signing 2 & 3% increases plus a thousand dollar signing bonus – spending a $1 billion windfall from a spike in natural gas sales. Difficult economic times have made forced the government and union reps to reign in their expectations with positive results.
Ah…so….??? What’s the problem?
Mike seems to feel Malanga’s piece is, somehow, not an attack on public sector workers. But having read it, it’s clearly in line with the typical right-wing tactic of setting the middle class against itself, choc a bloc full of the usual boilerplate. There’s a lot one could critique it for but the gist is rather than lifting private sector workers up, we must cut public sector workers down – a race to the bottom. Malanga does briefly elide over one of the true culprits – Proposition 13. Who would have thought that giving the people the ability to approve their own tax increases would mean…they never would approve tax increases. Who would have thought giving the people the ability to make spending commitments without requiring funding commitments would lead to trouble. He underplays the effect of the housing bust on revenue. There’s no mention of California’s unique 2/3 procedural super-majority legislative requirement for passing budgets (which has had the real effect of allowing a small group of die-hard Republican zealots from Orange County hijacking the budget process). And there’s no mention that Republicans have governed for much of the past 30 years. In all of that, California is a cautionary tale, not just to British Columbia, but to everyone.
But it’s not really of immediate relevance to today’s B.C.
