Thursday, August 25, 2011

How Labour Saves The World

It’s time to put organized workers to work on the planet’s problems

Planet S
Thursday August 25

Photo Credit: Illustration by Dakota McFadzean
Despite everything you read about how bad things have gotten with the world economy, geopolitics and the environment, the news hasn’t been all crap — not if you’re a corporation, that is. Government bailouts, tax cuts, deregulation — at the end of the day, it seems they have their protectors and guardians.

But what about the rest of us? You know, the people.

Where are we supposed to turn when those we’ve left in power are nothing but killers, thieves and lawyers? We need a champion — now. A Superman from that other Great Depression who can leap tall buildings, smash through walls and punch crooked politicians on the chin. A hero to knock out greedy landlords, war profiteers and wife beaters.

We don’t even require a red cape and blue tights.

Meanwhile, back at the global meltdown, the solutions we’ve seen so far have mostly benefited the villains and malefactors who created the whole mess. Even Obama, the president who guest-starred in a Spiderman comic, has abandoned us to the whims of the market. In the recovery, ordinary people have been — what’s the opposite of collateral damage? — accidental benefactors at best.

Not cool.

So where are the heroic ideas going to come from? Could it be that there’s a prescription to right the world’s wrongs and cure its many ills right under our noses?

Dare we suggest we pay heed to a voice largely ignored by the talking heads and decision makers?

What if the champion we’ve been looking for all along is Organized Labour?

I know, not much of a superhero name.

Still... hang on to your hats, true believers, because in this year’s Labour Day Report we’re taking a look at some of the crises, injustices, inequities and criminal wrongness that bedevil our world and asking: how can labour swoop in and save the day?

Planet Swriters talked to experts and everypersons about Labour’s Big Ideas. And here’s what we learned. /Paul Dechene


How Labour Saves The Economy

Back when the financial systems were flush with cash, it was all well and good for the media to discuss unions. Oh, they didn’t like to do it, and it didn’t happen often — and rarely without a sneer at those “big union wages”, “Cadillac benefit packages”, and a retrospective clip reel about some inconvenient strike or job action or other.

But now that global markets are in freefall, the “U” word doesn’t get mentioned much (unless they’re talking about the auto sector or some strike or job action or other). And certainly union leaders and economists rarely make the rounds of the business-news debate shows to discuss possible ways out.

In fact, it doesn’t take much trawling through the Internet to find various anonymous commentators claiming all those advantages of union membership are what bloated up the economy and gummed up industry’s wheels. It’s all fat that needs trimming.

And it’s like they’re trying to blame the entire financial fiasco on organized labour. Wealth stopped trickling down because union inefficiency trickled up. That sort of thing.

“You know what? That’s a crock,” says Saskatchewan Federation of Labour president Larry Hubich.

“The United States, where you hear a lot of this, they have union density of 10 per cent. Are they suggesting that all of the United States’ economic woes are a result of the 10 per cent of people who earn a living wage? Not likely.”

And what about Canada’s union density? It’s around 29.6 per cent.

Wow, with numbers like that, and when you consider we’ve weathered the financial storms much better than our neighbours to the south, you might think that unionization helped insulate us from the worst of the crisis.

How can that be? It runs counter to everything I’ve learned from talk radio.

According to Toby Sanger, senior CUPE economist, it all comes down to the power unions have to redress income inequality and make the economy more fair.

“There’s no doubt that stronger unions have led to a greater income equality,” says Sanger. “And what I found interesting is that, a year or two ago, there was an IMF paper that did some modeling showing that greater inequality was a major factor behind the economic crisis.”

Turns out those union wages keep money in the hands of people who are going to spend it. And Sanger argues that one strategy to turning an ailing economy around is putting even more money in their hands by allowing wages to increase, boosting minimum wages and improving the social wage by increasing public services.

All that will increase purchasing power. But that’s only the first step.

If labour’s going to put the economy back on track, they’ve a few other provisions they’d like to implement.

“How about re-regulating the financial markets?” suggests Hubich. “You listen to [Finance Minister Joe] Flaherty and [Stephen] Harper praising the Canadian financial sector because it’s insulated itself from what’s going on in the rest of the economy. Our banking institutions are strong. The reason is because they’re more tightly regulated than what’s in the United States.

“And Flaherty and Harper were the big advocates for going to exactly the same model that the United States has that ultimately failed. They just weren’t in a position, when they wanted to do it, to deregulate the financial markets because they didn’t have a majority government,” says Hubich.

“And now they’re realizing, ‘Holy shit. We were lucky that we didn’t do that because now we can take credit for something that we opposed.’”

What’s more, Harper and Flaherty have been quietly rolling back financial regulations in recent years. It’s like they’ve already forgotten 2008.

Alongside their deregulation kick, they’re also big boosters of tax cuts as an economic driver — another strategy labour says our leaders have backward.

“Our tax system has become increasingly regressive over the past number of years,” says Sanger, who notes that fairer taxes — including increasing our remarkably low corporate tax rate, lower even than the States’ — will reduce income inequality and provide revenue for services.

“But there’s also an economic function to fairer taxes,” says Sanger. “You need them to reduce the level of speculation in the economy. The way we structure our tax system right now, it promotes short-term, more speculative investments rather than long-term investments. And that perverts economic policy.”

So far, everything is sounding awfully New Dealy. And maybe that’s appropriate considering there are more than a few parallels between now and the 1930s. (You may not know this, but there’s a lesser-known line modeled on “there are no atheists in foxholes.” It’s “there are only Keynesians in depressions.”)

Labour’s fourth economic curative though is a doozy, and it also carries disturbing echoes of that earlier decade.

“In the longer term, we need much greater equality. We also to a certain extent need some creative destruction. It wasn’t just the New Deal that brought countries out of the Great Depression — I hate to say it — but it was the War.”

Yeesh! We need Nazis bent on global domination? That does not sound pleasant.

Of course, Sanger isn’t suggesting we engineer another world war, because we don’t need to. In addition to a war, WWII was also distinguished by a massive, passionate and single-minded industrial strategy. It’s that epochal industrial mobilization we need, and you don’t need to declare an actual war to achieve it. A metaphorical one will do if it’s sufficiently urgent.

And where are you going to find such a thing? Armine Yalnizyan, senior economist at the CCPA, points to the infrastructure deficit.

“We’ve got huge infrastructure repairs that need to be done; we have a huge backlog. Something like $125 billion and counting,” she says.

“This is exactly the time that we should have a planned 10-year spend. This isn’t forever and ever. A planned spend on fixing the infrastructure that my parents’ generation built that needs to be not only repaired but expanded to meet the rising population.

“This is the time to tackle it while we don’t yet have a labour shortage which will drive up the costs, and we’re still sitting at rock bottom for interest rates. The only thing that’s going to happen is the price of money is going to get more expensive,” she continues.

Beyond fixing roads and sewers, Yalnizyan also includes social programs in her list of crucial infrastructure projects. She sees something like child care being essential as more women need to be working to offset dropping fertility rates.

Sanger goes one step further and suggests we should also declare war on climate change and poverty, and build massive projects around ending them. They’re big spending projects that focus on where you want the economy to go.

“These are investments that last for decades. I think it was an incredible missed opportunity to not make the stimulus money more forward looking,” says Sanger.

So, to sum up: fairer wages, fairer taxes, regulate financial markets and invest heavily in infrastructure.

All these are ideas that we can initiate here — and then, once they’ve proven themselves, we’ll see them emulated around the world. By that time, though, we’ll be off like a shot — like the Yanks in 1945 all hopped up on the New Deal and two world wars’ worth of profiteering.

And I’d argue that Canada could use that head start not just to guarantee a new era of prosperity for future generations, but also to win the Smuggest Prick Of A Country award off the United States. And hold the championship for 60 years. /Paul Dechene

How Labour Saves Small Business

Are unions good for small business? You’d never know it from business lobby groups who speak on their behalf. You’d think that one would be a no-brainer — you know, the idea that people with more money to spend would be good for business — but no. Hell, they don’t even like minimum wage.

Business groups that bash unions have it backwards, says Nik Burton, managing editor of local press Coteau Books.

“There it seems to be a mindset that the way you improve your financial situation is on the expense side, as opposed to the revenue side. You cut expenses at every possible opportunity, including the people who work for you, as opposed to saying, ‘Well, when the community is wealthier then I get wealthier because of it.’”

It’s a reductive impulse, he says — one that doesn’t recognize that money circulating in the community is a good thing for all businesses.

Unions have been a boon to the book business in particular, which — like it or not — depends on people feeling that they have enough disposable income to spend on books, locally produced or otherwise.

“If people are trying to decide whether to buy something off the bargain table or to go and find a Coteau book on the Saskatchewan shelf, I know which way will benefit me the most,” he says.

And of course there’s just the quality of life that they bring to us all.

“I remember seeing a bumper sticker once that said “Unions: the folks who brought you the weekend.”

Try supporting local businesses without that. /Carle Steel

How Labour Saves My Generation

My generation isn’t totally screwed yet, but boy, do things look grim.

We 20-somethings are currently staring down the twin barrels of a slow post-recession economic recovery and staggering youth unemployment, which is hovering around 14 per cent even in Canada’s relatively stable economy. Things are much worse in places like, say, the nations of the Arab Spring movement, where unemployed and disaffected youth rose up and attempted to topple the dictators in power, and in Britain, where unemployed and disaffected youth queued up to loot Marks & Spencer’s.

That’s bad news at first blush for pro-union folks. Not only do union shops hire at a (slightly) slower rate than nonunionized businesses — around four per cent slower — but a prescient 2007 study by California State University economic profs Robert Krol and Shirley Svorny titled “Unions and Employment Growth: Evidence from State Economic Recoveries” shows that employers of unions are more hesitant to hire during the recovery from a recession.

Here’s the thing, though: those businesses may be afraid to hire workers at union wages due to uncertainty over demand, but as Mother Jones demonstrated using hard numbers in an online piece bluntly titled “Why Unions Matter: The Numbers”, union wages drive up wages in both the private and public sector.

Meaning, simply, that consumer demand across the board increases. More money being spent, more goods being manufactured, more jobs.

Besides that, people my age increasingly need unions to do what they were originally supposed to do, i.e. keep us from getting screwed.

Plutocrats like the Koch brothers in the States are scared shitless of unions, since they mean accountability; you can’t give your employees awful hours, zero benefits and hang the constant fear of getting fired for little or no reason over their heads, while making obscene sums yourself.

And Matthew Blackwell, a 26-year-old high school teacher who (full disclosure) is also a good friend of mine, pointed out something that’s really important about having the measure of job security that unions can provide, versus his experience in non-unionized labour.

“There was a lot less autonomy [in the non-union job], I found,” says Blackwell. “There was a much clearer hierarchy of power, where you have to sort of submit to that power for fear of losing your job. Whereas with teachers, the idea is that you’re a professional and you’re able to exercise your professional judgment, and the union will back you up on that.”

People my age and younger have two futures — one where the union’s got our back, and one where people are throwing bricks through windows for the laptops they can’t afford but are told they need. But now we’ve got the present, and this one can be won. /John Cameron

How Labour Saves Wages

“Rich man, poor man, beggar man, thief” is a famous nursery rhyme couplet. Gender bias aside, it does a pretty fair job of describing the current income gap dividing Canadians.

According to a 2010 Canadian Centre for Policy Alternatives report, the richest 20 per cent of households control 70 per cent of the country’s wealth. Of that amount, 13.8 per cent is held by the top one per cent.

That’s up from 7.7-per cent in the late 1970s.

“In the post-war period, a rising tide did lift all boats,” says CCPA economist David MacDonald. “As the economy grew, incomes across the board did too. But in 1980 the top 20 to 40 per cent of income earners started to break away. That group’s continued to do well, while no one else has seen an increase above the rate of inflation.”

That’s a direct result of the Thatcher-Reagan revolution, with its mania for low taxes, privatized government services and a general privileging of private and corporate interests over public interests.

“Income tax rates, particularly at the upper end, have dropped dramatically in Canada,” says MacDonald. “In the post-war period, they used to be 80 per cent. Now they’re 40 per cent at the high end.”

Since 2000, corporate tax rates have been halved, he adds.

And in the recent federal election the Harper Conservatives promised to decrease them even more.

MacDonald says a big factor in the growing gap between the rich and everyone else is the decline in union influence.

“A recent U.S. study calculated that between one-fifth and one-third of all income inequality could be attributed to the declining position of organized labour,” he says.

Through collective bargaining, unions not only secure reasonable wages for their members, they also put pressure on non-union employers to offer good wages and working conditions to attract quality employees. That helps distribute income more fairly.

The last time income differentials were this high was in the 1920s. That decade (glamorized as the Roaring Twenties) was followed by the Great Depression. And MacDonald foresees more economic turmoil on the horizon.

“If wealth becomes concentrated in the upper end, those folks aren’t buying consumer goods and driving the economy to the same extent as middle and lower income people because they already have everything. Instead, they take it out of the economy through saving, or start speculating on the stock market,” concludes MacDonald.

Meanwhile, middle and low income Canadians are piling on debt to finance mortgages and consumer purchases. Even with record low interest rates, they’re struggling to remain solvent.

If interest rates jump two or three points, bankruptcies and foreclosures will skyrocket. Look out. /Gregory Beatty

How Labour Saves The Developing World

Aside from lower taxes and private sector control of our economy through the free market, another policy spawned by the Thatcher-Reagan revolution was globalization. That was done at the behest of transnational corporations that, through their sheer size, are able to shift production to low-wage countries with little regard for worker safety or environmental protection.

Protected by international trade agreements, these corporations are then free to sell their low-cost products to developed countries, reaping maximum profit while decimating any competitor unfortunate enough to operate in a jurisdiction where progressive labour and environmental legislation exist.

Worried about the downward pressure this has exerted on the wages and benefits of their members, and the overall well-being of broader society, organized labour has resisted this trend.

But with right-wing governments pushing globalization, they haven’t had much success in stemming its tide.

While acknowledging the tremendous impact globalization has had on the Canadian economy, CCPA economist David MacDonald refuses to blame it for all our economic ills.

“The idea that there’s this massive force called globalization that we’re passive to resist dramatically undersells what we’ve done to ourselves,” says MacDonald. “We made the choice that our corporate tax rates should be the lowest in the G8. We made the choice that we’re not going to have a more progressive tax system. We made the choice to cut our own public services.”

Nonetheless, he does agree that unions in Canada, be it through unilateral initiatives or international labour bodies like the Geneva-based International Labour Organization, can improve conditions for workers in the developing world.

“It’s not that workers in sweat shops are saying, ‘Oh, this is a great job. I love it,’” says MacDonald. “They like the job in the sense that it’s better than living in the countryside and having a very meagre lifestyle. People move to the city for a reason — because they can make more money, and make a better life for their kids.”

Labour relations in the developing world, MacDonald adds, resemble conditions that existed in Canada in the early 20th century.

“In Canada, the basic rules for employing people have been established — they’ve been legislated. Whereas the basic rules for employing people in China or India, for example, have not been established. People working super-long days without exits or bathroom breaks… that sort of stuff, in Canada, would be illegal. But there you have to negotiate for it. It hasn’t made it to law yet.”

By supporting the rights of workers in the developing world to elect representatives to negotiate on their behalf with employers, and strike if need be to win contract concessions, Canadian-based unions, in concert with our government and consumers at large, can help level the global playing field and end the unfair exploitation of workers worldwide. /Gregory Beatty

How Labour Saves Democracy

If you crack a textbook on introductory political science, says University of Regina instructor Tina Beaudry-Mellor, you’ll find labour described as a special interest or lobby group. It wasn’t always that way, though.

“Labour played a populist role in that it represented the wisdom of a number of ordinary working people [versus] the elites in government and corporations,” says Beaudry-Mellor. “That role has traditionally been very important in liberal democracies. It’s a way of mobilizing ordinary citizens.”

For decades, organized labour had a special relationship with the CCF/NDP that provided a means for resolutions adopted at labour conventions to gain traction in the political arena.

Now, says Beaudry-Mellor, not so much.

“Labour increasingly finds itself pressuring from the outside rather than the inside, whereas business has an increasing tendency to pressure from the inside,” she says. “The ability to influence government policy, of course, goes with that.”

Stung by criticism that it’s in the pocket of labour, the NDP has moved in recent years to distance itself from the union movement to enhance its appeal to the broader electorate. That criticism is unfair, Beaudry-Mellor argues.

“If we looked at the Saskatchewan Party base we’d find that there’s a substantial proportion of business people who support that party. Yet we don’t level the same critique. It’s a slant by right-wing governments and media to demonize anyone who opposes the status quo.”

In 2010, Saskatchewan’s acting chief electoral officer David Wilkie noted in his annual report that the Sask Party received $3.03 million in contributions, while its main political rival, the NDP, received $1.34 million.

Federally, the pro-big business Conservative Party enjoys a similar financial advantage over its political rivals — an advantage that will only grow when the Cons kill the per-vote party subsidy as they have vowed to do.

If labour is going to wait for the federal and provincial government and mainstream media to invite them back into the political discussion, says Beaudry-Mellor, they’ll be waiting a long time.

“I think [unions] need to take a page from President Obama’s book when he was first running for president and use social media tools to re-educate people on why unions matter.

“Some of my colleagues will criticize third-party advertising, and I understand why. They think it will end up being dominated by [powerful interests] just like election campaigns are now.

“But if labour isn’t involved, then a very important opportunity to shape the conversation and present new policy options is being missed.” /Gregory Beatty

How Labour Saves Saskatchewan

What would Saskatchewan’s economy be like today if the Sask. Party had taken power in the late 1990s? You know — after they sold the Crown corporations (as their campaign platforms at the time promised,)and thousands of well-paying, unionized jobs left town as the new owners of Saskatchewan Government Insurance, SaskPower, SaskEnergy and SaskTel consolidated their head offices in Calgary, Vancouver or Toronto?

Imagine what Saskatoon or Regina real estate would have looked like — and what the retail communities in those cities would have resembled, with a good chunk of their shoppers either calling the moving vans, looking for jobs at half to one-third their former wages, or unemployed.

Not a pretty picture.

The impact of well-paying jobs is something that’s taken for granted in Saskatchewan’s economic circles, especially by businesses and rural Saskatchewan — the two major pillars of the SaskParty’s political tent. In the 1990s, it was well-paid, unionized jobs in the civil service and health care professions that saved everyone’s butts. As commodity prices on the farm and for natural resources tanked, the places where many unionized people worked — highway maintenance bases, schools and hospitals, for example — were the difference between economic life and death for several rural communities.

The problem is, however, that in those communities, union members were getting an income more stable than, say, farmers or those working in the retail sector — and their economic contributions were taken for granted at best, and resented at worst.

The only time unions made news in rural Saskatchewan was when they went on strike (postal workers, grain handlers in Vancouver, Prince Rupert or Thunder Bay, railway workers and others) which affected someone’s income. Meanwhile, many rural residents grew increasingly jealous of teachers, nurses, support staff and other unionized people who were getting regular wages and benefits at a time when their incomes, dependent on the market (and government subsidies… but shhhh) got no such assurances.

If this picture looks familiar, it’s because it’s similar to Tea Party America.

Again, not pretty.

Saskatchewan hasn’t — at least hasn’t yet — gotten into the same kind of economic doldrums that states affected by Tea Partyesque delusions (Wisconsin, Michigan, Texas) are currently suffering. But the fact is, without a middle class you don’t have a stable economy. And, if you don’t have either a strong union movement or a business community that prizes a well-educated, dedicated workforce, you don’t have a middle class.

That’s the lesson one can learn from Saskatchewan’s labour history.

Maybe a “thank-you” is in order? /Stephen LaRose

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