Public Sector Unions and Government Restraint

1
Public Sector Unionsand Government Restraint

• Week 8

2
United Nations Universal Declaration of Human
Rights

• Article 23 (4) Everyone has the right to form
  and to join trade unions for the protection of
  his or her interests.
• http//www.un.org/en/documents/udhr/

3
International Labour Organization (ILO), an
agency of the United Nations

• In its constitution (1919), the ILO affirms
  freedom of association as a global labour
  right.
• In 1948-49, ILO conventions number 87 (Freedom of
  Association and the Right to Organize) and number
  98 (The Right to Organize and Collective
  Bargaining) affirmed the rights to bargain
  collectively and to strike.
• In 1998, the ILOs Declaration on Fundamental
  Principles and Rights at Work reaffirmed the
  fundamental rights to freedom of association
  and the effective recognition of the right to
  collective bargaining.
• www.ilo.org

4
Recent Labour Conflicts

• Jim Stanford. Raitts Three Principles for
  labour relations only run one way, Globe Mail.
  November 2, 2011.
• http//www.theglobeandmail.com/news/opinions/opini
  on/raitts-three-principles-for-labour-relations-on
  ly-run-one-way/article2221394/
• Contracted out transit service in York Region is
  currently experiencing a strike.
• http//www.cbc.ca/news/canada/toronto/story/2011/1
  0/23/toronto-bus-strikes-loom.html

5
Labour Movement in Canada

• Four major waves of working-class resistance and
  labour militancy when the labour movement
  expanded its membership and its goals
• the 1880s,
• the end of First World War,
• during and after the Second World War,
• and the decade after 1965.

6
Development of unions in Canada

• Until 1872, union activity was illegal in Canada.
  Yet workers had formed unions and went on strike
  regardless.
• In 1872, thousands of workers in cities and towns
  throughout southern Ontario and Quebec, went on
  strike to secure the nine-hour day.
• http//ontarioplaques.com/Plaques_GHI/Plaque_Hamil
  ton02.html
• It included printers at the Globe newspaper owned
  by George Brown, a prominent Liberal. Brown had
  the union leaders charged for engaging in a
  seditious conspiracy.
• http//www.torontohistory.org/Pages_PQR/Printers_S
  trike_of_1872.html

7
The Nine-Hour Movement of 1872

• George Browns political rival, John A. Macdonald
  sensed a political opportunity and passed the
  Trade Unions Act which legalized union formation.
  However, it did not require employers to
  recognize unions or engage in collective
  bargaining.
• In 1876, federal legislation granted some legal
  room for picketing.
• A national labour organization, the Trades and
  Labor Congress of Canada (TLC) was established in
  1886.

8
1880s the Knights of Labor

• The 1880s were a decade of unprecedented
  working-class militancy, centred in the emergence
  of an organization called the Noble and Holy
  Order of the Knights of Labor, a body different
  from the trade unions inasmuch as it sought to
  bring all workers into one grand organization
  (Palmer, 1992 120).
• The leadership of the Knights spoke of class
  co-operation rather than class struggle and
  tended to dislike strikes, but the Knights were
  involved with most of the major labour struggles
  and strikes of the 1880s and early 1890s.

9
Winnipeg General Strike, 1919

• metalworkers struggling for union recognition
  asked for support, as a result some 25,000-30,000
  workers went on strike, strike lasted 6 weeks.
• Essential services were maintained during the
  strike as authorized by the Central Strike
  Committee.
• the North-West Mounted Police fired into a crowd
  killing two strikers.

10
Winnipeg General Strike, 1919

• Workers in other cities struck in sympathy with
  Winnipeg.
• Victoria, Vancouver, New Westminster, Prince
  Rupert, Calgary, Edmonton, Medicine Hat, Prince
  Albert, Regina, Saskatoon, Brandon, Port Arthur,
  Toronto, Montreal, and Amherst, Nova Scotia, all
  saw general strikes called to support the workers
  in Winnipeg and to protest the arrests of strike
  leaders.

11
1940s Industrial Unionism

• The great watershed was the 1940s. Before that
  point, almost every effort by various labour
  movements to win a permanent place in Canadian
  industrial and political life was beaten back by
  hostile employers and a generally unsympathetic
  state.
• It was only during and immediately following
  World War II that unions made the breakthrough
  that allowed them to operate, within a tightly
  controlled framework, in most mass-production,
  resource, and transportation industries (Heron,
  1996 xviii).

12
Industrial Unionism

• breakthrough for industrial unionism in the
  manufacturing sector came in 1937 with the strike
  for union recognition at the GM plant in Oshawa.
• 1943, one in three union members in the country
  was on strike.

13
Rise of Institutionalized Collective Bargaining
in the Private Sector

• 1944 Privy Council Order PC 1003
• established a process to allow workers to certify
  a union,
• once a union was certified the employer was
  obligated to recognize the union,
• it also established grievance-arbitration
  procedures which involves a mechanism for the
  resolution of grievances without resort to strike
  action
• banned strikes during the life of a collective
  agreement, banning sympathy or solidarity strikes

14
Rise of Institutionalized Collective Bargaining
in the Private Sector

• 1945 Ford Windsor strike workers blocked the
  plant with cars arbitration and Justice Ivan
  Rand came up with what has been known as the Rand
  formula all members of bargaining unit pay dues,
  but does not compel them to be members of the
  union, union dues to be paid automatically by
  check-off.
• http//ontarioplaques.com/Plaques_DEF/Plaque_Essex
  28.html

15
Postwar bargaining system (private sector)

• institutionalized the labour movement,
  incorporated them into the system.
• Grievance procedures meant that disputes were
  settled by professionals rather than rank and
  file membership
• institutionalized procedures rather than
  mobilization or strikes
• union leaders were pushed to police their own
  members to prevent them from striking during the
  term of the collective agreement
• Cold War era of the 1950s meant that Communism
  and radicalism in general was suppressed by
  government, business and unions.

16
Public Sector Workers

• Saskatchewan
• 1944 CCF government led by Tommy Douglas extended
  collective bargaining rights, including right to
  strike, to provincial government employees.
• Federal
• National Joint Council of the Public Service,
  1944
• Merely an advisory board, involving consultation
  with public employees

17
Rise and Fall of the Postwar Settlement in Canada

• End of WWII ushers in era of Keynesian demand
  management, development of welfare state and
  institutionalized collective bargaining regime.
• Economic turbulence of the 1970s and the
  corporate response turns the tide in the
  direction of neo-liberalism.

18
The Shift to Keynesianism

• Great Depression of the 1930s
• War economy, 1939-45
• Foreign models Franklin Delano Roosevelt
  (1933-45) in USA, Labour Party government
  (1945-51) in Britain.
• Alleged success of our war-time ally, the Soviet
  Union
• Rise of the CCF
• Rise of industrial unionism

19
Rise of the Postwar Settlement in Canada

• 1943 Report on Social Security in Canada
• 1945 White Paper on Employment and Income -
  commits the government to goal of high and
  stable levels of employment

20
Labour Militancy in the 60s and 70s

• There was a significant burst of labour militancy
  in the late 60s up until the mid 70s, led by
  young workers, often rebelling against their own
  union leadership
• Canada had more strikes and more workers on
  strike than any advanced capitalist country other
  than Italy about a third of these were illegal
  wildcat strikes

21
Public Sector Unionization

• Late 60s also saw the beginning of the
  unionization of the public sector.
• Provincial Quebec grants collective bargaining
  rights to public sector workers, 1965. Remaining
  provinces do likewise from 1968-1978.
• Federal Public Service Staff Relations Act, 1967
• Restrictions on issues that can be negotiated -
  Excluded are all matters respecting the
  organization of the public service, the
  assignment of duties, the classification of
  positions, and job evaluation (Johnson, 2011
  369).
• estimated that public sector union membership
  increased from approximately 183,000 members in
  1961 to 1.5 million members in 1981 (Rose, 2007
  185).

22
Public Sector Unionization

• In 1972, Quebecs public sector workers formed
  the Common Front and engaged in a massive
  public sector general strike (with sympathy
  strikes by private sector workers) involving some
  250,000 to 300,000 workers, the largest strike
  (and among the most radical) in Canadian history.

23
Labour Movement Today

• Uppal, Sharanjit. 2011. Unionization 2011
  Perspectives on Labour and Income. Vol. 23, No.
  4. Winter. Statistics Canada Catalogue no.
  75-001-X.
• Unionization rate 29.7 (female workers 31.1,
  male workers 28.2)
• The highest unionization rates were in public
  sector industries
• In 2011, 74.7 of public sector workers were
  covered by a collective agreement, but only 17.5
  of private sector workers.
• a wage premium exists, which, after controlling
  for employee and workplace characteristics, has
  been estimated at 7.7

24
The Growth of Social Programs

• Old Age Pensions (1927)
• Blind Persons Allowance (1937)
• Unemployment Insurance (1941)
• Family Allowances (1944)
• Old Age Security (1951)
• Hospital Insurance (1957)
• Canada Pension Plan (1966)
• Canada Assistance Plan (1966)
• Guaranteed Income Supplement (1966)
• Medical Insurance (1968)
• U.I. expanded (1971)

25
The Backlash Business Militancy and Public
Sector Restraint
26
Onset of Inflation () in Canada

• 1971 2.9 1982 10.9
• 1972 4.7 1983 5.7
• 1973 7.8 1984 4.4
• 1974 10.8 1985 3.9
• 1975 10.8 1986 4.2
• 1976 7.5 1987 4.4
• 1977 8.0 1988 4.0
• 1978 9.0 1989 5.0
• 1979 9.1 1990 4.8
• 1980 10.2 1991 5.6
• 1981 12.4 1992 1.5

27
Rising Unemployment () in Canada

• 1967 3.8 1987 8.8
• 1969 4.4 1989 7.6
• 1971 6.2 1991 10.3
• 1973 5.5 1993 11.4
• 1975 6.9 1995 9.6
• 1977 8.0 1997 9.2
• 1979 7.5 1999 7.6
• 1981 7.6 2001 7.2
• 1983 12.0 2003 7.6
• 1985 10.6 2004 7.2

28
The International ContextAmerican Leadership
Challenged

• The Nixon shock, the US ends the convertibility
  of the US dollar to gold, 1971
• OPEC oil embargo and oil crisis, 1973
• The United States withdraws from Vietnam, 1973
• proposals for a New International Economic Order,
  1974
• Iranian Revolution, 1979

29
The Backlash

• The combination of
• domestic social movements,
• international economic turbulence
• and international political uncertainty
• led to a social and political backlash against
  the welfare state and the rights of labour.

30
Corporate militancy

• The period from the mid-1970s onward has been
  described by some as class politics (or class
  war) from above, as the business sector has
  aggressively mobilized to defend their interests
  in Canada and elsewhere.

31
The Backlash in Canada

• In Canada, the backlash was, to some degree,
  delayed. While 1968 saw the victory of Nixon in
  the US, Canada experienced Trudeaumania in the
  same year.
• Still, the Canadian corporate elite would engage
  in a similar process of organizing as occurred
  elsewhere.

32
Canadian Council of Chief Executives (CCCE)

• Founded in 1976 as Business Council on National
  Issues (BCNI). CCCE 2001.
• composed of the chief executive officers of 150
  leading Canadian enterprises, widely recognized
  as Canada's most influential business
  organization.
• The companies they lead collectively administer
  C3.2 trillion in assets, have annual revenues in
  excess of C750 billion.
• Thomas d'Aquino was the CEO and President of the
  BCNI/CCCE for 28 years, on January 1, 2010 he was
  replaced by John Manley, a former federal cabinet
  minister during the Chrétien government.

33
The Backlash Corporate and Advocacy Think Tanks

• Conference Board of Canada, 1954
• C.D. Howe Institute, 1973
• Fraser Institute, 1974
• Atlantic Institute for Market Studies (AIMS),
  1994
• Montreal Economic Institute, 1999
• Frontier Centre for Public Policy, 1999

34
The Backlash Neoliberal Citizen Groups

• National Citizens Coalition, 1967
• Canadian Taxpayers Federation, 1990

35
Crisis of Keynesianism

• economic difficulties, a crisis of public finance
  (rising public sector deficits and debt), and
  concerns about global competition provided the
  context for the shift away from Keynesianism and
  toward neoliberalism.
• Foreign models Margaret Thatcher (1979-1990) and
  Ronald Reagan (1981-1989).

36
End of Keynesianism

• In 1979, the American govt turned to high
  interest rates to squeeze inflation and the Bank
  of Canada followed, these high interest rates led
  to the most significant economic recession since
  the 1930s, but it served the purpose of squeezing
  inflation and disciplining labour.

37
Canadian Govt Response

• Restraint imposed on labour, especially public
  sector workers.
• Anti-Inflation Program (wage and price controls)
  1975-1978
• Public Sector Compensation Restraint Act (6 and
  5 program) 1982-1984

38
Canadian Govt Response

• Restraint imposed on labour, especially public
  sector workers.
• Joseph Rose, describes these years as the
  restraint years (1982-1990) and the
  retrenchment years (1990-1997).

39
Federal Govt Response

• Monetary Restraint
• From 1975 onward, Canadas central bank, the Bank
  of Canada, was committed to monetary restraint.
• Particularly in the 1980s, the Bank of Canada
  followed the lead of the US Federal Reserve in
  using high interest rates to defeat inflation.

40
Federal Govt Response

• Restraint imposed on transfers to provinces
• Established Programs Financing (EPF) block
  funding arrangement replaced cost-shared programs
  for health and post-secondary education, 1977

41
Major Privatizations by Federal Government

• de Haviland 1986
• Canadair 1986
• Teleglobe 1987
• Canadian Development Corporation 1987
• Air Canada 1988
• Petro-Canada 1991
• Nordion International 1991
• Telesat 1992
• CNR 1995
• NavCanada 1996

42
Federal Govt Response

• Massive spending cuts,
• especially in 1995 budget.
• Canada Health and Social Transfer (CHST)
• replaces EPF and
• Canada Assistance Plan (CAP)

43
Federal Govt Response

• The 1995 federal budget marked a fundamental
  shift in the role of the federal state in Canada
  
• (McBride, 2005 106).

44
Federal Govt Restraint

• Following the 1995 federal budget, the Public
  Service Alliance of Canada (PSAC) lost 21 of its
  membership within 3 years (Fudge, 2005 44).

45
Social programs in retreat

• Corporate interests have mobilized to advocate
  neo-liberal policies including
• free trade agreements,
• the deregulation of foreign investment in Canada,
• tax cuts,
• the privatization of public services, and
• reductions in social spending.
• Successive federal governments have responded by
  restraining social spending and attempting to
  reduce the role of the state in the economy.

46
Canada in comparison

• Canadians tend to compare ourselves with the US
  and point to stronger social programs and public
  health care, but compared to other rich developed
  countries, Canada spends relatively little on
  social programs and has a relatively high degree
  of social inequality.
• In 2007, UNICEF ranked Canada 12th among 21 rich
  countries in child well-being.
• http//www.unicef.org/media/files/ChildPovertyRep
  ort.pdf

47
Corporate Restructuring

• At the same time that the state was engaged in
  this shift to neoliberalism employers were
  responding through economic restructuring to deal
  with the labour militancy and the economic
  turbulence. The corporate sector responded by
• re-organizing workplaces,
• speeding up production,
• introducing new technologies in a process
  described as lean production,
• they also investing internationally,
• and moved to support trade and investment
  liberalization.

48
Growing Inequality under Neoliberalism

• From 1946 to 1980, family incomes grew at all
  points in the distribution, so incomes shares
  remained roughly unchanged, and median family
  incomes and living standards rose rapidly. In the
  1981 to 2006 period, when the gains from growth
  went to the top end of the distribution, real
  incomes for most families stagnated (Osberg,
  200817).
• After 1995, ongoing changes in transfers rapidly
  reduced the redistributive role of the Canadian
  state (Osberg, 2008 30).

49
Growing Inequality under Neoliberalism

• Declining unionization, a lower minimum wage,
  higher unemployment, less social insurance
  protection and more openness to international
  competition probably interact strongly in their
  impacts on inequality. If so, they should be
  viewed as a policy package, to contrast with
  the policy package of the period before 1980
  (Osberg, 2008 34).

50
Conclusion

• Canadians tend to consider their society to be a
  kinder, gentler, more egalitarian version of the
  United States.
• However, the more generous welfare state in
  Canada only emerged in the 1960s. And by
  international standards, Canada looks more like
  the US than different.
• By the 1980s, many of these programs were
  beginning to be whittled away. In the mid-1990s,
  Canadian governments made a serious shift to
  fiscal restraint.

51
Camfield, 2011.

• The Great Recession, the Employers Offensive
  and the Canadian Public Sector Unions
• Toronto Municipal Strike of 2009 The corporate
  media were filled with hostile coverage of the
  strike. The unions were portrayed as greedy and
  unrealistic for trying to defend paid sick day
  provisions in their contracts that were better
  than those of most workers. The fact that these
  provisions had been agreed to by their employer
  in exchange for monetary concessions by the
  unions in the past was almost never mentioned
  (103).

52
Camfield, 2011.

• The strike revealed just how many workers,
  feeling acutely insecure about their own jobs and
  fearful of the economic crisis would affect them
  and their families, were quick to respond with
  hostility to public sector workers defending past
  gains (105).
• Many people react with anger at those who seek
  to defend rights, benefits or wages that are
  better than what they themselves enjoy, rather
  than wishing them well (106).