Its Not Going to be a Quiet Summer on the Labour Front
April 1, 1990 -
The signs of increased labour strife in the coming months are unmistakable. Unions in the major sectors of the economy are, or soon will be, negotiating renewal collective agreements. These cover employees of Canada Post, the steel producers, automakers, airlines, construction and forestry companies.
Union leaders assure us that wage rates have not kept pace with inflation, and that in this collective bargaining round they will insist on substantial increases and other improvements. They're in a fighting mood, not only because of what they perceive to be the impact of inflation on wages. They are especially angry over a number of government policies, such as the Canada-U.S. free trade agreement which they blame for plant shutdowns and layoffs, the 7% federal sales tax to be implemented January 1, 1991, the attempts to restructure unemployment insurance, and policies encapsuled under the general heading of privatization and deregulation. The Canadian Labour Congress has accused the government of using cuts to the unemployment insurance program in order to make workers insecure so they will soften their wage demands.
In addition to a tough bargaining stand on wages, unions will also demand an expansion of pay equity and affirmative action programs, child care arrangements, and pension benefits. Mainline unions will also continue their high-profile, public pressure tactics in opposition to the current government's policies.
The auto industry will square off with the Canadian Auto Workers union at a time when it is faced with strong offshore competition and declining sales. CAW President Bob White acknowledges that the industry is going through a shakeout, but he says the union will "look at the profit picture over the last three years and ahead three years. In the last round (in 1987) we indexed pensions. Now we've got a lot of younger people in the plants so we've got to talk about more income security." (James Bagnail, "Tough Talk at Contract Time," Financial Times of Canada, April 2, 1990, p.6)
Other union spokesmen are focussing on what they perceive to be an unjust social system that widens the gap between rich and poor. Says Gord Wilson, president of the Ontario Federation of Labour, "Workers aren't blind; they're seeing the wealth accumulated by a few. You won't see workers caving in in 1990....We'll be fighting all over the g..d... place." (Peter Gorrie, "Analysts Forecasting a Year of Turbulence in Workplace," Toronto Star, January 2, 1990, p.El)
Unionists are especially incensed with Finance Minister Michael Wilson's request that they moderate their wage demands for the sake of controlling inflation. They ridicule Wilson's prediction that the new sales tax will have a minimal effect on the cost of living, perhaps 1.25%. Jeff Rose, national president of the Canadian Union of Public Employees, is sure that the inflationary impact of the new tax will be at least 3 to 3.5%. In a recent article he accused the government of politicizing the budget process and misleading the Canadian public. According to him, more of the tax burden will be shifted from business and higher income earners onto the backs of the rest of the country. (See Jeff Rose, "Unions Going for Higher Wages," The Financial Post, April 9, 1990, p.12.)
Rose serves notice to his readers and members that unions will demand major wage increases, and that if higher inflation results, it will not be the fault of the unions but of the government for launching the wrong tax at the wrong time, and for trying to load the tax burden on that section of the economy least able to absorb its impact.
The thrust of the unions' position is clear: Don't blame us for the economic problems of this country, especially not for inflation and for our huge national debt. We are simply protecting the weakest members of society against the onslaughts of an insensitive government in cahoots with big business. This kind of portrayal is tempting for its simplicity, but it should not be taken at face value. A few reasons readily come to mind.
It should be remembered that the mainline unions' alternative to the GST, namely, to sock it to the rich and the corporations, is not much of a solution. One problem is that there are too few truly rich to make a significant difference; another is that ultimately all taxes paid by corporations are paid by the general public.
It's not true that the poor will suffer most from the new sales tax. In fact, the lowest income category (individuals and families earning less than $30,000) will receive a GST tax credit cheque four times per year. Why does Mr. Rose not pass on that important information? The reason is obvious: it would undercut the force of his argument.
Undoubtedly, there are injustices in our society. That is one reason why unions continue to be necessary, but it is a mistake to depict Canadian society as if it were in a continuous war of the righteous (the oppressed workers) against the unrighteous (government and business). It is also a mistake to deny any link between wage increases and inflation. It would be far better to acknowledge the fact that there is a relationship between wages and inflation and that one way to make wage increases non-inflationary is to tie them to productivity increases and economic growth. After all, inflation is one of the most cruel and regressive forms of income distribution because the poor are the most defenceless against its ravages. Unions should therefore be in the forefront of the fight against inflation.
Mainline trade union leaders belong to the political left. Consequently they tend to close their eyes to the danger of excessive state intervention (and of the resultant massive increases in the national debt, such as we are now experiencing in Canada). Anyone who refuses to recognize the threat to our economic health when we have to devote approximately 1/3 of tax revenues to interest payments alone does not deserve much credibility.
The irony is that the present public spending is done in the name of social justice. But the reality is that we are committing a grave injustice by loading our debts onto future generations. Unionists who pay no attention to the fact that all of us are responsible for the public debt and must do our share to reduce it only have themselves to blame if we do not take their utterances very seriously.
As long as adversarial labour relations are alive and well in Canada, the kind of give-and-take and building of mutual trust essential for facing our many serious national problems will not happen. It is easy to pose the dilemma before us as one between us-and-them, i.e., us righteous ones against the greedy and hardhearted. But just a little bit of self-awareness and self-criticism (plus an awareness of the truly oppressive and unjust societies in many other parts of the world) quickly reveals how misleading and destructive such a simple-minded division is.