With the recent municipal workers’ strike ending in Toronto, it is useful to reflect on the role of public sector unions, and why so many of these unions have been going on strike in the recent months.
Unions were originally conceived in the days when employment conditions were poor, worker safety was nonexistent, wages were low, and hours were long. They were needed because no single employee could represent themselves in a fair argument against an employer – one would simply be fired. Since then, unions have won for workers a myriad of rights which have improved workplace safety, given us minimum wages, limits on hours, and many benefits we wouldn’t otherwise have without collective bargaining. These are all good advances which we should not forget, and unions have been instrumental in the advancement of our society.
Unions work because they have power over employers. As a group representing a large number of employees, they can threaten to withdraw their services (ie. go on strike), picket, work-to-rule, among other possibilities. These actions are detrimental to the employer, and any employer will be forced to bargain in good faith given this threat. If an employer refuses to bargain, he can choose to fire everyone (but cause massive disruptions and lose a great deal of reputation – it is also sometimes illegal), or he can choose to wait out a strike. Waiting out a strike, in the long run, will also damage a company, through lost profits and eventually bankruptcy.
This last point is important, because it is what provides a balance to the power that unions have over their employers. If a strike goes on for too long, the workers will be out of a job – because the company will go broke with no income. So the workers, too, must bargain in good faith, if they hope to reach a settlement before this worst case scenario occurs.
Let us now examine the case of modern public sector unions. These unions, such as CUPE (the largest in Canada), represent a variety of workers employed or funded by governments, be it local, provincial, or federal. Bargaining with public sector unions is not unlike that of any other union, with three very important caveats. First, their employers, the government, cannot go bankrupt. Because the government cannot go bankrupt, a strike cannot permanently put the workers out of a job. Second, in most jurisdictions, public sector workers cannot be fired for going on a legal strike. This removes a second risk that workers must take by going on strike. Third, a governmental institution usually has no competition for services. For example, when social services in Toronto are shut down, there is very little one can do as a consumer to boycott either the employees or the employers – we are dependent on them. By contrast, if say, GM plant workers go on strike, consumers can always buy from a myriad of other auto makers, such as Ford, Toyota, Honda, Hyundai, etc. With no competition, there cannot also be long term profit losses, which gives neither party an incentive to speed up the process.
This set of circumstances mean that the balance of power in the public sector shifts significantly towards the unions, and evidence suggests that public sector workers have ‘won’ more often than not, public sector strikes last longer than private sector ones, and public sector workers are paid more than their private sector counterparts.
The current model does not seem to be working for the public sector. Make no mistake though – the solution is not to copy the private sector, where workers make far less, and all the profits go straight to wall street investors and managerial executive types. Is it time for a more creative labour bargaining process?