First, the fact is that when unions are stronger the economy as a whole does better. Unions restore demand to an economy by raising wages for their members and putting more purchasing power to work, enabling more hiring. On the flip side, when labor is weak and capital unconstrained, corporations hoard, hiring slows, and inequality deepens. Thus we have today both record highs in corporate profits and record lows in wages.
Second, unions lift wages for non-union members too by creating a higher prevailing wage. Even if you aren’t a member your pay is influenced by the strength or weakness of organized labor. The presence of unions sets off a wage race to the top. Their absence sets off a race to the bottom.
Unfortunately, the relegation of organized labor to tiny minority status and the fact that the public sector is the last remaining stronghold for unions have led many Americans to see them as special interests seeking special privileges, often on the taxpayer’s dime. This think…
Since British Columbia MP Russell Hiebert tabled the union dues disclosure bill, every politician and commentator with an opinion on Canada’s unique labour structure has taken it as an excuse to air their views. Every topic from mandatory dues to privacy rights has been aired — raising controversy in an area that has been relatively stable and peaceful for the last 40 years. Now lawyers are weighing in on whether this political dispute has any credence in law.
The most obvious dose of legal reality is there is already a legislative requirement for financial disclosure to union members in every jurisdiction in the country. In fact, bill C-377 overleaps provincial jurisdiction by amending the Income Tax Act. The long list of items to be disclosed does not stop at mere financial information but requires identification of the name and address of the payer and payee, the purpose and description and amount of every transaction paid or received over $5,000…
The thing is, “Right-to-Work” still remains a dubious—even Orwellian—term, probably because we have a sweatshop-sized vat of research documenting examples of what this scheme has meant for those American jurisdictions that have implemented it. Higher rates of poverty and child mortality; lower per-capita income, life expectancy and standard of living; fewer people covered by health insurance; and significantly lower levels of worker productivity.
Let me say that again. Right-to-Work states experience significantly lower levels of worker productivity (which I guess free market types feel is so totally worth it if it means they can bash a union or two).
At their best, unions have fought not only for their members, but also for fundamental social reforms which benefit all working people, such as universal public health care, decent pensions, paid time off the job, and accessible and affordable education. Canada’s unions have never been politically monolithic, but they have been a consistent force for a more progressive Canada.
The OECD, the IMF and the World Bank have recognized that unions promote more equitable societies without undermining good economic performance. Countries with strong unions have less extremes of rich and poor, and stronger public services and social safety nets.
Some advanced industrial countries with still strong labour movements, such as Germany and the Nordic countries, enjoy very high productivity and very low unemployment. And some of the most successful developing countries in terms of both growth and poverty reduction, notably Brazil, have strong a
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.
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…Jon Stewart is on the case.
If not unions, what force will ensure that the benefits of future prosperity are shared by all, not hoarded by a few? …
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.
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.
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.