Blame Unions? Try Blaming Employers
Further to my recent post about the current mini wave of industrial unrest in Canada, and who should wear the blame for it…
Now we have the latest developments at Air Canada, where the Machinists local has rejected a tentative multi-union agreement which would have deferred Air Canada’s pension contributions in hopes of seeing the company through the recession. Here’s another case where the unions will take the heat (as evidenced by today’s dramatic Globe and Mail headline about how they will hold the Olympics hostage!) for a spectacular failure of private enterprise. Air Canada got siimilar pension relief back in 2004 when it emerged from CCAA protection. The company enjoyed a short-lived rebound — the benefits of which were squandered through excessive financial engineering overseen by former CEO Robert Milton. Investors, brokers, shareholders, and Milton himself pocketed a total of over $2 billion in one-time financial gains from that wheeling and dealing. Meanwhile, the airline itself was left precariously underfunded, worth a total of around $100 million on the stock market. Yet unions, merely for trying to hang onto what they have in the face of this corporate short-sightedness, will become the public enemy — instead of Milton, and the whole apparatus of financialization. (In the Machinists’ case, the issue is further complicated by Air Canada’s offshoring of their work to El Salvador.)
I attended an event in Toronto on Tuesday that gives a smaller but equally compelling example of employers taking advantage of the uncertainty and insecurity bred by the recession, to take the axe to collective bargaining. 20 CAW members at Cision (a media monitoring service) have been on strike for 2 months in Ottawa. Is this another example of unions making excessive demands during a recession? Of course not. Like every other dispute we’ve discussed (City of Toronto, City of Windsor, the automakers, the B.C. ambulance drivers, the auto parts workers who have occupied their closing factories to try to get their legal severance) this one is about just hanging onto to what you were previously entitled to.
Allen Kirshner is the steward for this determined little local union. Here’s what he said at a support rally held in Toronto on Tuesday. It’s an excellent little speech. And it describes better than I could what is happening in this strike (where the employer clearly just went through the motions — holding only one face-to-face session with the union bargainers, followed by the legally-required minimum participation in conciliation and mediation — in a strategy which is clearly aimed at destroying the collective agreement).
Think of this the next time you hear about a labour “dispute.” There has never been a time when collective bargaining disputes were more one-sided than they are at present. Don’t blame the unions, blame the employers.
Here is Allen’s fine speech:
Hello, my name is Allen Kirshner and I’m a Union Steward at the Ottawa office of Cision Canada, represented by the CAW Local 567. I want to thank everyone for coming out to support us. Thank you to the Canadian Labour Congress, the Ontario Federation of Labour and the Toronto Labour Council for being here to help us get out the message to our company’s executives that it’s time they treated their Ottawa workers with respect and returned to the bargaining table to negotiate a proper contract. Today marks the start of the 9th week of our strike, which began May 5th. During that time, the company has shown, and continues to show, no interest in resolving this dispute.Â
I’d like to take the opportunity to explain to those who’ve come out to support us how we’ve come to this point. Our Collective Bargaining Agreement expired at the end of 2008. With the tough economic times that have hit, Cision seized the opportunity to exploit the situation by proposing a completely revamped CBA. In it they demanded no less than 51 changes, many of which attacked the core structure of the agreement. Of greatest concern were proposals to restructure severance requirements, absolving them of paying any compensation for employees who have worked less than five full years, while clawing back payments to everyone else. They proposed wanting to circumvent the Employment Standards Act through a reduction in severance requirements if one-quarter of staff were laid off within a 6 month period instead of the current 18 months. They insisted upon the ability to permanently change shift start times within 4 hours either way with virtually no notice. Imagine you work 8 to 4 and are told you now have to come in for 4am. How would you feel? Exactly! Cost of Living Allowance clause removal, restrictive new language on meeting completely undefined company standards, and initial wage increase proposals of 0%, 1% and 1% over three years. This is a company hell bent on busting our union and punishing us for having the gall to ask for decent compensation.
When it came time to negotiate, Cision did the absolute minimum they needed to do. One face-to-face meeting without a third party present, one meeting with a conciliator, one meeting with a mediator. Each time, the company presented some version of its initial proposal, with no more than cosmetic changes. At those meetings, Cision was represented by the Human Resources Manager and an Ottawa-based lawyer. There were no actual management staff present to even give the appearance of feigning interest. Whereas our previous two CBA agreements had us dealing with the company president – not the same person in charge these days — the current head of Cision Canada has been completely absent, choosing to hide in this ivory tower and afraid to ever show his face at bargaining sessions. The meetings with the conciliator and mediator each lasted less than an hour. The company negotiating team was told Cision HAD to have key proposals imposed, no matter what. With a lack of any sign of actual willingness to bargain, we felt we had no choice but to set a strike date. When the company still refused to budge, we walked out.
We’re a small group of two dozen employees. There’s virtually not an hour of the day, evening, night, overnight or weekend that one of us isn’t on the job. We’ve taken pride in our work with a company that has spent the last few years doing what it can to emaciate the Ottawa office. They’ve reassigned work to other divisions, they’ve shipped work to India using a third-party contractor and now they’re trying to destroy our Collective Bargaining Agreement and have gone as far as to use scabs during our strike. We’re here today to say “enough is enough”!
I’d like to briefly address any Cision Toronto workers who may be present. If you don’t already know, the reason why you’re getting paid what you are is because of the Ottawa office. After we unionized, the company raised your wages and benefits as a pre-emptive measure against you doing the same. If you think for one minute that they’re not going to come after your compensation if they get their way with our agreement, then have I got news for you. They can…and they most certainly will, if it suits them.
It’d be easy for me to only offer up a rousing speech of hope, with vim and vigour, hellfire and brimstone. And while I hope I’ve managed to stir up some passion to help fuel our cause and carry on the fight, I also want to convey a more complete message. We’re angry, we’re anxious and we’re disillusioned within the company’s attitude and actions. We are, and have always been, fully prepared to work towards a respectable agreement. We’ve reduced and adjusted our demands to reflect the economic reality, offering to even forego any pay increases and compensation demands for 2009. But this ungodly proposal you’ve unleashed on us is nothing short of disgusting. How you sleep at night knowing what you’re trying to do to your own people, some of whom have worked 5, 10, 15 even close to 20 years here is just beyond me.Â
Well, I’ve spoken my piece. Thank you so much to everyone for coming. Your support means a lot to us.
thanks Jim – union busting and bashing is in high vogue to paper over the excesses of greedy capitalism and rabid individualism.
Blame “both”. We’re caught betwteen corporate and union greed.
Unions go too far – there is nothing, absolutely nothing so bad for them that they have to act like thugs.
In this economic climate it is a shame that everyone cannot work together to create a strategy that will look after both employees, retirees, business travellers and the public.
The economy, the cost of gas, the cost of travel has been taken up by clever corporations like Westjet, who have written new business policies to take them into the new millennium.
I think it is time to set blame aside and consider the needs of people, not unions, unions leaders, or employers.
Actually that sounds like a boilerplate strike speech. Both sides of the bargaining table routinely put bargaining agents forward, with the union president and the CEO staying behind the scenes. Obviously the employer only figured it out this year. Also, traditionally both parties come to the table asking for way more than they expect to get into the collective agreement. And delays in bargaining and pretending to not negotiate is actually a bargaining strategy. The very best collective agreements are negotiated by hard-nosed bargaining under a strike threat with the negotiating done by specialists. So good luck and carry on.
“There has never been a time when collective bargaining disputes were more one-sided than they are at present.”
I think it takes two to fight. I think it’s completely arbitrary to say one side is more to blame than the other.
Both sides are rent seekers. Presumably, most employees would work for a little less money than they presently make, and most employers would be willing to pay their employees a little more money than they currently do. Collective bargaining is simply a process where the two sides fight over the middle ground between the two to see who can get a little bit more out of the other side.
Both unions and employers are greedy and selfish. They both want to make as much money as possible for themselves. That’s reality, and I don’t think there’s anything wrong with that.
But to try and argue one side is more greedy or selfish or evil than the other to me seems pointless. Both sides are simply seeking as much rents as they can out of the other.
David, the union is not asking for more but wanting to keep what they got. It is the employer (corporations mainly) that are purposefully not bargaining in good faith to ensure the union walks out on strike and than starts on union bashing and calling in its minions like you to do their dirty work.
Do you have a problem with workers making a descent living wage? Do you see a problem where the upper management and CEO make gads of money and perks – way beyond workers, and than get public bailouts for their mistakes?
Jan,
So you think that it is in a Corporations best interest for the union to go on strike?
Jan, I understand the unions in these specific cases are only trying to maintain what they have already.
I don’t have a problem with workers making decent wages. I also get an icky taste in my mouth when upper management in unsuccessful companies earn huge salaries, and am not a big fan of bailouts.
But just because I believe all those things doesn’t make the employers in the situation about evil, and the unions blameless. As an economics student, I’m most interested in incentives, and both sides have the same incentives: pocket as big a share of the company’s profits as possible. That’s how the free market works. Neither side is evil. They’re just self-interested.
And Chris is right — neither side wants a strike or lockout ultimately. Both sides want profits, which are pretty hard to generate during a strike or lockout.
David
I recall those days sitting in Necon economics classes thinking very closely about IR the way you do. However, unions may be loosely based on the self interest or workers wanting more, but there is so much more to the story that is left out of economics class.
I will just start with this notion, all of history is the history of class struggle. The day that the tribe was allowed to have surplus ;abour was the day that class struggle was born.
Class struggle now reaches into such dimensions to such a complexity, that working people don’t even realize they are working class anymore.
It is about a lot more than incentives and profits. It is about so much more no days. The labour movement has been criticized quite deeply and has taken some major hits over the last 30 years, but ultimately they are one of the few movements that still wanders on, struggling against the notion that unfettered markets are the most efficient rationalizes.
You give me an unfettered market, and I will give you a whole pile of corporate lads sitting around a board room table licking there lips and defining just what the notion of self regulation will be.
The Toronto strike was instigated by management and is about a whole lot more than some bankable sick days. This is a strike for the rest of us, drawing a line and the sand and letting the powers that be know that concessions and giving in are not what the working people in this country will be part of.
THis recession was generated by the corporate lads and there quest for unfettered markets. Why should the penalties be handed out to us working class folk. This is a signpost strike and CUPE cannot give in and Paul Moist and the folks know it or the rest of the public sector will be in the same boat.
The corporate sector has been on social assistance from the tax payer long enough and to start taking it out on the public sector unions as some, share the pain notion is ridiculous.
We cannot let the adjustment for this recession be taken out on the backs of workers. Layoffs and firings are enough pain, a histeria of concession bargaining is not what the consumptive aspects of the economy can handle right now.
Deficits are here to stay for a while and we have got to understand that deflationary forces are fed by concessions. Surely economists can understand that, but this is not about economics it is about politics and the corporate sector nailing the unions, while they collect welfare cheques.
Jim almost had it right with his notion of picking issues with CUPE, management picked one that they knew would resonant with public in a quite union destructive manner. Unleashing some nastiness is a great way to divide and conquer.
The corporate elite are in defection mode, blame everyone else and it is very very apparent to those wearing the right glasses.
paul
Hogwash. It’s just bargaining.
The more labour history I know, the more I like neoclassical industrial relations economics. The latter describes comptetitive bargaining between the two main factors of production, and a game theory movement towards the settlement range of bargaining, resulting in a deal about 98% of the time. It’s a mechanism for distributing profits in proportion to relative bargaining power, which means the settlement range will move if either the profits or power balance moves.
The recession means that the gross profits have declined, and the higher unemployment rate means that the union has less relative bargaining power. These two items combined would predict concessions. The flip side is that in a boom era, unemployment drops and profits increase, resulting in bargaining gains. On average good years outnumber the bad, and unionized employees do well overall.
That’s all happening with the superstructure in the background. The stump speeches just colour it with emotion, anecdote, and defiance. In this field the marxist theory dovetails with the neoclassical model, so everyone sounds like they’re telling the truth.
So I guess I am just a story teller then, your pathetically short sighted Stuart.
There is no such thing as economics- it is political economy, and if you cannot accept that than I am sorry but I have nothing to say to you as you miss one half the equation.
MArxism was nothing but Hogwash?
You obviously live in a pretty quaint world surrounded with notions that are destined to make your intellect fell good.
Take a step into the real world, and tell me that what is out there is not complexity that is just a bit beyond the complexities of models and neo con fancies.
You know something, a good portion of the populace still believes that Darwin was a farce. The parallels with economic theory, especially the neo-con variety are simply amazing.
Change is eternal, don’t get caught up in some fanciful notion that somehow the mechanics and machinations of humans will statically congeal around neo con theory. No matter how hard the academics pound their hammer, the peg will change its shape.
Hog wash is hardly a critique by the way, and convenient dovetailing is a paltry response to the misery and suffering that has been unleashed unto the world with the bunk that the neo cons have unleashed onto the world.
Come on Stuart you can do batter than that.
paul
Okay, I would say the same thing again without saying hogwash, with apologies for being flippant. Freeman and Medoff in “what do unions do” found that unions mostly ensure workers get a fair share of the company profits they helped generate. For me, this means the underlying profits drive a large portion of the union-nonunion wage gap, so when the profits plummet, so does the wage gap. This is accomplished by concession bargaining, which is normal bargaining in reverse. The bargaining is woven into the superstructure, such that when capitalism really sucks (i.e. now), bargaining sucks too. But on average, collective bargaining in a predominantly capitalist economy results in substantial increases in income for workers.
I would have to agree with you that it is impossible to disentangle the economy from the politics. But I didn’t major in any of the political economy disciplines, so no I can’t agree with you that your academic major is more credible than my academic major. For me, class analysis is a tool that is useful in some circumstances but not all. I find that outside of unions and academia, you can’t function unless you can turn the class analysis on and off.
The dovetailing is a reference to the fact that the two major meta-theories are consistent on how collective bargaining operates. I’m just not very emotional, so for me every story of despair can be traced back to macroeconomics and social policy. The flavour is intersting, but it’s not as important as labour density, interest rates, or the price of oil.
Okay.
I can accept that.
However I do believe that class analysis, has been seriously undervalued in its ability to make sense of the world.
But of course when I talk of class, I do mean an updated version of class. One that bring into the fold the spirit that say an Ulrich Beck so brilliantly outlined in his book Risk Society.
It is not just about the distribution of the goods that we are talking about. We are also talking about risks and distribution of bads, whether it be pollution, health and safety, crime, and a whole bunch more, that I feel unions have started to make their way into. These forms of representation I do believe lay outside the collective bargaining process. Potentially some of that can be codified in a collective agreement, but it would be minimal.
So for me and I imagine many others, class is more relevant than ever.
And I will mention that given the situation of the economy and the extremely high probability that the worst could still be ahead of us, and not behind us, I do believe that traditional IR theory may not fit totally into this space.
If somehow
-the credit markets settle down,
-a good portion of the toxic assets are finally realized and accounted for
-the faith and trust within the global finance can be re-established
-the trade imbalances between China and the USA can be dealt with
– the US deficit can be financed without jacking rates through the roof,
– we can somehow avoid more systemic cuts, downsizing and layoffs and miss a deflationary spiral
– and instead of destroying our productive assets and instead work to transform towards a socially and environmentally sustainable economy,
and we somehow have a momentum generated away form credit bubble capitalism towards the point above
I will let you have your traditional IR models back.
Until then, I think we need to think a bit more outside the box for explaining such things as the recent assualt on labour unions. I don;t see this as pendulum type IR models.
Paul
While of course it’s trivially true that the bargains struck between owners and labour will reflect the relative power of the two, that power is not purely economic. One thing that to me casts doubt on the purely economic version of the idea is that the last couple of boom times have conspicuously lacked any improvements in the position of labour. Even though unemployment was relatively low, the share of profits taken by upper management and owners grew while the compensation of non-management labour was flat at best (figures of average income tend to camouflage this latter fact, because if a CEO makes millions more while everyone else makes the same, the average just went up).
One thing that union people tend to be deeply aware of is that the state has a huge impact on who has how much power in the bargaining process. The legal and regulatory environment surrounding unionization, bargaining, the right to strike and so forth has a massive role in defining how the bargaining process works, from formal questions such as whether scabbing is allowed to questions like whether, whatever the formal laws, company “security” will in practice get prosecuted for breaking union heads. The state in effect can give and take away power from both parties by its choice and enforcement of laws, and so has a huge role in defining what proportion of profits will go to capital and what will go to labour. This in turn, along with taxation, has a big impact on defining whether a country will have an income structure with small numbers of very wealthy and a lot of poor, or whether there will be a flatter income structure with a strong middle class.
I’m happy if you’re happy. I would also want to have my traditional IR models back if some kind of peak oil steampunk dystopia set in and we ended up with something that resembled the 1930’s but with internet access. Since the traditional model accurately described bargaining 80 years ago, we don’t need a full return to 2006 peak prosperity. A lot of things got sorted out in the 30’s and 40’s outside of collective bargaining in a manner that was not always progressive. That’s all from me on this one.