Public Policy Forum Testimonial Dinner

The Public Policy Forum is a centrist NGO based in Ottawa whose mandate is to promote dialogue and engagement among the major policy stakeholders in Canada. Its current President is David Mitchell, former leader of the B.C. Liberals, who is a very decent, sincere, bridge-building person.

Every year the PPF hosts a big dinner in Toronto where Testimonial awards are given to a few Canadians deemed to have made a contribution to public policy discourse.  This year I was very fortunate to have been selected as one of the recipients of the award. 

The slate of recipients this year was commendably broad: former Ontario Premier Bill Davis (who sounds like a socialist these days, so much have the goalposts shifted since he was in power), RBC CEO Gord Nixon, Monique Leroux head of the Desjardins movement in Quebec (who was highly inspiring with her sincere, straight-up testimony to the value of social capital and social participation), Andre Picard (the Globe and Mail’s highly incisive health reporter), Victor Thomas (young Indo-Canadian prez of the Regina Chamber of Commerce), and myself.

I am highly flummoxed by receiving this award.  I suspect that the panel of judges felt it would be in order to recognize someone from the labour movement (last time they did that was Bob White in 2005), but couldn’t think of anyone else.  (Not many other labour folks get to show off their mugs on Power and Politics, after all!)  At any rate, it gave me a chance to speak directly to 1200 opinion leaders in Canada about the current holy war against unions, and why preserving institutions of wage regulation and collective bargaining might just be in the social interest.  Here are YouTube links to my speech, and also to the short video they plated before I went up:

http://www.youtube.com/watch?v=qwFxBkSyNpo&feature=related

http://www.youtube.com/watch?v=Iiow1TzkXUg

And posted  below is the official version of the speech I gave.  Due to time constraints, I didn’t actually get to read the whole thing — but I am sure I got the point across anyway.  I am very grateful to David Mitchell and the PPF for this unique opportunity!

Thank you very, very much.

And thank you to the Public Policy Forum, under the tremendous leadership of David Mitchell, for this honour tonight. 

As you see, the PPF truly works to engage ALL stakeholders, from ALL walks of life.  Not just big donors who can afford big sponsorships.  But ALL stakeholders. 

Just look at the award winners tonight:  a banker, a cooperator, a public health journalist, a Chamber of Commerce president, a premier, and a trade unionist.  That’s concrete proof of the Public Policy Forum’s inclusiveness.  It’s fabulous – and sadly, it’s too rare in Canada today. 

I also think it’s fabulous that the Forum has chosen to recognize a union economist.

Because I suspect that a substantial proportion of the audience tonight probably thinks “union economist” is a contradiction in terms! 

Kind of like military intelligence.  Or ethical investment.  Or, dare I say it, Progressive Conservative! 

I say that, by the way, with all due respect to Premier Davis, who truly WAS a Progressive Conservative.  Unfortunately, sir, after they made you, I think they broke the mold! 

Economists are taught that when supply equals demand, the world is in order.  They are also taught that unions exist primarily to MESS UP that order.  So how could an economist even THINK about working for a union?

Well, I don’t think it’s a contradiction in terms, at all. 

I do not accept the theory that all exchange is equal and voluntary.  That markets ensure maximum efficiency, and optimal welfare.  That all factors of production are paid according to their marginal productivity. 

In the real world, there is nothing at all EQUAL about the exchange between a worker and his or her employer.   

A worker needs a job to survive.

An employer needs workers, collectively, to produce goods and services that are then sold for a profit.  Profit, not survival.  And as for any INDIVIDUAL worker, the employer doesn’t need them at all.  They can be replaced … usually pretty easily. 

So the employment relationship embodies an inherent asymmetry of power.  The obvious solution to this asymmetry is for workers to approach the employer collectively, creating a situation in which the employer needs workers, in total, as much as each individual worker needs the employer. 

That’s why unions are almost as old as capitalism itself.  Because it didn’t take long for workers to figure out how to even the odds. 

Unions were finally legalized, after centuries of struggle and often violent suppression, in the 1870s.  And by the 1880s, pro-business commentators and politicians were already saying things like this:  “You know, back in the 1870s unions may have been necessary, but not any more.  This is the 1880s.”

Does that sound familiar? 

But even in today’s modern world, workers still need the ability to collectively advance their interests, to level a playing field that has been tilting visibly against them. 

This is just as true in the so-called “knowledge economy,” as it was in the Industrial Revolution.  Consider a high-tech, innovative industry like wireless communications.  Now consider the working conditions for most of the people who work in that industry.  Call centre workers.  Ubiquitous young salespeople.  Technicians working on contract.  Lousy pay, lousy benefits, no security. 

I do not accept that those conditions are an inevitable feature of modern, high-tech life.  We CAN do better, and we SHOULD do better.  But we won’t, unless we empower workers like cell phone salespeople to demand a better deal from their innovative, highly profitable employers.

Indeed, contrary to the stereotype, the more educated you are, the MORE likely you are to be in a union.  Perhaps that’s because you’ve figured out how the world actually works – as opposed to how economists PRETEND it works. 

So in my view, unions remain essential to the prosperity and security of workers. 

But tonight, in light of the crusade that’s been launched against unions, from Wisconsin to Toronto City Hall, I also want to emphasize that healthy, stable unions are essential to the well-being of society in general.  Not just to union members. 

When workers lack the collective capacity to bargain, employers capitalize on insecurity and desperation to suppress wages.  That’s why real median family incomes in Canada are no higher today, than a quarter-century ago.  As unions have weakened, the relationship between productivity and compensation has also weakened.

Income gains and opportunity become concentrated in a small proportion of the population whose wealth or unique skills or position guarantee them a strong income.  For the rest of us, however, there is little underpinning our standard of living. 

What sociologists describe as the disappearance of the middle class, is in fact the downward homogenization of the WORKING class. 

Once upon a time, a healthy proportion of workers used unions and other institutional supports to win a better quality of life than the so-called “market” would ever deliver.  But their ability to continue doing so has been undermined by deunionization, deregulation, globalization, and competition. 

The evidence of the resulting stagnation and polarization of income is irrefutable.  Real incomes for most workers have been flat, at best.  Those income gains that have been generated have been hogged by those who need it the least.

Indeed, the richest 1 percent of Canadians – a group equivalent to the population of Saskatoon – has captured fully one-third of all personal income gains in this country since 1987.  They now take home 17 percent of the pie, and that lopsided slice is growing. 

This combination of stagnation and polarization is not just unfair.  It is profoundly destructive: to health outcomes, to inclusion, to criminality, to social capital and trust – something economists have belatedly recognized is an essential input to efficient economic activity. 

Consider just one shocking indicator.  Just down the highway here in Hamilton, Ontario, researcher and journalist Stephen Buist, utilizing census and hospital records, found a 21 year gap in life expectancy between the richest and the poorest neighbourhoods of the city.  21 years of life, depending on what side of the tracks you live on.  On the poor side of the tracks, life expectancy in Hamilton is equivalent to Pakistan. 

And Hamilton isn’t unique.  I don’t think anyone in this room wants to live in a society where those types of conditions become more common.  That’s why thoughtful opinion leaders in Canada should think twice before throwing in their lot with the current anti-union bandwagon.

There have been two dominant policy responses so far in Canada to the visible weakening of unions and other institutions of wage and labour market regulation over the past quarter-century. 

One has been benign neglect: some governments stand passively on the sidelines while unions, particularly in the private sector, get creamed. 

The other is worse: some governments actively joined the dog-pile, with anti-union measures making it even harder for workers to find a collective voice. 

But historical and international experience shows that collective bargaining only thrives in an environment where its core principles are actively SUPPORTED by policy – whether that’s compulsory works councils in Europe, union-friendly arrangements like the original Wagner Act, or the modern tripartism of successful export powerhouses like Brazil or Korea.

 In my view, unions are a crucial institution for channelling the hopes and aspirations of common folk.  No society without free and vibrant unions is truly democratic.  And no economy without institutionalized collective wage structures has EVER attained mass, inclusive prosperity. 

Yes, unions need to innovate, and labour relations needs to evolve.  But it’s hard to be innovative, and take risks, when you are fighting for your right to exist.  The more common reaction, in that circumstance, is to just hunker down and batten down the hatches. 

So if we want a Canada in which the gap in life expectancy between poor people and rich people is LESS than 21 years, policy-makers need to revitalize the core principles of collective bargaining, and find innovative ways of nurturing and realizing those principles. 

And business should resist the temptation to go for the jugular, just because unions seem weak.  Business should work instead to build models of inclusion and fairness and mutual respect, which can be both efficient, and economically and socially sustainable.  There are plenty of examples of how that can work – like the relationship between the CAW and Elyse Allan’s company, General Electric, to pick just one instance.

That is the challenge I leave you with tonight. 

I must allocate one last minute of my time to some very important thank you’s. 

First, I thank the CAW: a democratic, innovative, fighting organization, that has given me incredible freedom to play a broader role in public policy, rather than working solely as a union functionary.  I dare say I’ve had more impact on the world thanks to the CAW, than if I had become just another tenured left-wing academic! 

I am profoundly honoured that all three of the CAW’s Presidents are here tonight: Bob White, Buzz Hargrove, and Ken Lewenza.  Please stand up, guys.  You won’t find three more principled, innovative union leaders anywhere.

I also thank to the Canadian Centre for Policy Alternatives, which has published so much of my research, and my editors at the Globe and Mail, John Stackhouse and Natasha Hassan, for their commitment to a diversity of views. 

Thanks to my family, who are here en masse tonight. 

And a very special thank you to my true love and life partner, Professor Donna Baines, who has shared all of life’s adventures with me, who has made enormous contributions of her own to progressive research and pedagogy, and who this year in particular has lived life with courage and integrity.  Thank you. 

Donna, of course, is a tenured left-wing academic.  (When I said that thing about academics earlier, darling, I wasn’t talking about you!)

I’ve been reading a new biography about the great American folk singer, Pete Seeger.  He says that individual fame only obscures the more important contributions made by large numbers of deserving but unrecognized people. 

I feel the same way about this award tonight. 

The labour movement would have no impact whatsoever on public policy, were it not for thousands of rank-and-file activists and leaders, who dedicate time and energy and hope, risking their livelihoods and sometimes their lives, for the ideals of fairness and security. 

Few of them are known in high-falutin’ policy circles, like our gathering tonight.  You never get to see them on Power and Politics.

But they are the ones who deserve this award, not me.  I have not yet paid enough dues to this movement, at my ripe old age, to deserve this kind of tribute. 

But I accept it, in the name of all trade unionists fighting to build a better, fairer world.

Solidarity forever, and thank you very much!