Labour Pains (2) - The Fence
In their much praised book The Spirit Level, authors Kate Pickett and Richard Wilkinson summoned all their research and coupled it with their ultimate conclusion: “Among the richest countries, it’s more the unequal ones that do worse according to almost every quality of life indicator.” Most research backs them. As a general rule this is why countries like the United States, Canada and Britain face a growing inequality crisis, a yawning gap between the rich and poor, and economies that continue to stagnate despite huge amounts of wealth flowing through them.It is interesting that those countries known as the most “equal” in the world are those where union membership is the highest. In 2009, Norway had 54.4% of their workers belong to unions. Denmark was 66.6%, Sweden 68.4%, and the highest was Finland at 69.2%. All of these governments firmly support not only union membership but the overall effects such unions have on levelling the playing field and providing better opportunity for all citizens and not just a few. Union rates have held fairly steady over the decades because of such support.In contrast, the US, Britain and Canada are increasingly losing ground. In America, according to the Bureau of Labour Statistics, union rates that were at 35% in the 1950s have declined precipitously to 11.9% - the lowest point in 70 years. In Britain, employees belonging to a union slid from a rate of 50% almost 30 years ago to just 26% today. More glaringly, since 2003, well before the current financial struggle, 11 million low to middle-income workers have seen no rise in their incomes. And in Canada, as we noted yesterday, a union rate of 40% in the 1960s has now fallen below 30%.The purpose of this post is to place the overall union effect on the economic fortunes of workers in some kind of context. As union rates hold their own, or even increase, income disparity follows suit. But today we are witnessing a scenario where the opposite is now manifesting itself.We all know our history well enough to understand that prior to the Second World War most countries in the West were characterized by a permanent state of income inequality – there were the wealthy and the rest. But with millions of soldiers coming home after 1945, governments accepted their responsibility to bring them back to a productive workspace. Recognizing this unique opportunity to get their economies moving again in domestic potential, various governments enacted legislation that not only supported unions but saw to their expansion as well. For the next two decades wealth flowed through most levels of society and the great middle-class was born.Politics is different today. Politicians aren’t stupid; they know the stats about unions and equality in Western countries. Sadly, they have gone along with what appears to be a rather benign support of a corporate agenda that has nevertheless had devastating consequences on income disparity. Britain’s David Cameron seemed to be an exception to that rule. Seeking support for his policies, he acknowledged repeatedly the linkage between effective union participation and productivity. His meetings with union representatives were frequent and his desire to work with them appeared sincere. And then he got elected Prime Minister. Now he has undertaken hardball practices with these same unions, even flirting with scuttling right-to-strike legislation that he once regarded as sacred to the British principle of fairness.I often thought about this during my time in the Canadian Parliament. Corporate presence and pressure was everywhere – hard to ignore and even harder to oppose. Politicians blessed with benefits, holiday pay, and the kind of pensions that unions struggled so hard to attain for everyone, learned to give lip-service to union representatives while at the same time passing legislation that serviced the corporate sector but deprived not only union protections, but the abilities of average workers to gain a productive wage.And so we come to a sad truth. Beginning in the 1970s, corporations on both sides of the 49th parallel undertook a comprehensive assault on unions. In Canada, opportunities emerging in the global economy meant that they didn’t want to be linked to Canadian labour legislation anymore. While the majority of small and medium-sized businesses continued to abide by the arrangements, the large corporations wanted to slip the reins and move unhindered. Unions slowly awoke to the reality that a new unfettered capitalism was about to sever the historic link between employers and their workers.And so we end up in the predicament mentioned yesterday, where a huge American corporation has shut its workers out in London, Ontario, demanded that they take a 50% wage cut, and seems more than likely determined to just pick up stakes and end a relationship that saw their employees raise production standards by 20% (and, ironically, corporate profits). I spoke to two high-profile business leaders yesterday who could only shake their head at the sheer brutishness of it. One even referred to it as the “buccaneer protocol.”These workers assembled a marvellous global product and raised their game to make it even better. They came to work a few days ago to find a fence erected by the company, banning them from the place where they worked for years, built a competitive product and a community at the same time. It’s the 1920s all over again and it’s not acceptable because, as my friend Jodi said on Twitter yesterday, this is my community and these workers are my fellow citizens."