"Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that "under no circumstances shall this Federation engage in or support strikes against the United States Government.""
-Franklin D. Roosevelt
When people hear my opinions that I so enjoy spouting, they tend to assume I'm left-leaning on the political spectrum. And I suppose they are correct.
I generally believe that government should not legislate morality and should instead focus on protecting individual rights that don't harm others. I believe in some government intervention in the economic sector to prevent excessive concentration of wealth that allows dynasty builders to unduly influence and corrupt the democratic process. I also believe that a welfare safety net does more good than harm overall and should not be undone just to punish a few cheats. Mind you, I don't agree with the leftist trend towards nanny-stating and the legalizing of political correctness but that's a topic for another day.
Most people in hearing my views would believe I also support unions and organized labor. And I do. Unions have been responsible for many of the social gains that resulted in North America having an enviable middle-class. In the 60s and 70s, they allied with the civil rights and anti-war movements which are both causes I feel are worth fighting for. Although the gains of unions in the past have made them partially redundant since these gains have been enshrined in laws that apply to all, having unions fight for a larger slice of the profits in those sectors that cannot be off-shored means that wealth is spread around, purchasing power is increased, and our economy is stronger.
Of course, not all unions are equal. Many of them are top-heavy and are more about enriching the leaders or allowing them to pursue pet causes the union as a whole doesn't care about than actually benefiting the workers. In many cases, they have also given up on the social progress aspect and are simply self-interested groups that try to get the best deals for their workers. Which is fair if not quite ideal. And due to the previous gains of unions, most workers today have not had to fight for what are now seen as basic workers rights. This makes their attachment to their unions less meaningful and the original reason for their existence less understood. But overall, I believe that unions remain a useful and necessary feature of society. Off-shoring jobs to countries with cheap labor has tremendously weakened them but that doesn't make them irrelevant. Organized labor remains the main check to organized capital which is essential considering that corporate profits are sky-high while developed nations where they sell their goods like Canada run large deficits.
Now to the meat of this post. Considering what I've said, you may find it surprising that I'm vehemently against a certain kind of union: Public-sector unions. The fact is, in Canada, 71% of government employees were unionized as of last year compared to only 16% of private-sector employees. Public employees also average out to be making 12% more than those in the private sector. Arguably, this is a result of their increased unionization rates since, across Canada, unionized employees make $4.97 more per hour. Traditionally, people in the public sector have made less than those in the private but enjoyed benefits like stronger pensions, better health benefits, more vacation time, and greater job security. Now the public sector still has those things and makes more money to boot. This is a problem because public-sector employees are paid for with tax money from the private sector. Of course, the public sector also pays taxes but that money comes from the private-sector's taxes first.
Let me lay out my main reasons I have a problem with public-sector unions. First, the government already tends to be generous with its employees even in countries where they are not unionized. They are the hands of government and their loyalty is necessary to running the country and being an effective government that is capable of getting stuff done and being re-elected. The higher-ups who set pay can't really give themselves more if they don't give it to all government employees without building problematic resentment. It's not like in the private-sector where money given to employees is money not enjoyed by the owners so wages are pushed to the floor. People in government who set employee wages don't personally get to keep money they don't give to their employees so they will tend to be a bit freer with it.
Second, there is no self-correcting mechanism for over-greedy unions like there is in the private sector. If pay and benefits are too much, it will be like what happened to the Big 3 US car companies and they will go under, costing the union their jobs. Of course they were saved by government funds in that case but that doesn't usually happen. Public-sector employees, on the other hand, can always demand more because the government can simply raise taxes and take more money from other areas to pay them. This can technically bankrupt the country but that is kinda the result we are hoping to avoid here and makes greedy public unions dangerous for everyone.
Third, unions and striking go hand-in-hand. Striking is the refusal to work en masse until demands are met. This generally isn't a problem in the private sector except where key services have been privatized. It doesn't matter if I can't go into Burger King because their employees are on strike. I'll go to a different food hole. However, like FDR says in the above quote, it is deadly serious when government employees go on strike, at least in some areas. If your kids can't go to school because teachers are on strike or your house burns down because firemen are on strike or you mail doesn't arrive because mailmen are on strike, these are serious issues that compromise the whole society's functioning. This makes their ability to strike both very dangerous and extremely effective since we need them. The economist Thomas DiLorenzo went as far as to say that "The enormous power of government-employee unions effectively transfers the power to tax from voters to the unions. Because government-employee unions can so easily force elected officials to raise taxes to meet their "demands," it is they, not the voters, who control the rate of taxation within a political jurisdiction."
Due to this, some government jobs have it written into collective bargaining agreements that they cannot strike but others do not. Striking sometimes occurs regardless.
In 2011, the British Columbia Teachers Federation's contract expired. For the new one, they demanded a 15% wage increase over 3 years (at a time of only 2.5% inflation), additional benefits, control over class sizes, additional leave, and more paid preparation time. Illegal strikes have been considered but not employed as of yet in order to get these. Their minimum pay was $48k and maximum was $74k, not including benefits and pensions. Although that pay is not astronomical since BC is expensive to live, it is worth remembering that teaching is an extremely desirable profession. You get the summers off and many consider it fulfilling to work with kids. Lots of people train for it and there are always more young grads looking for positions. This wage hike demand was also coming at a time when BC was trying to stop their deficit spending which had reached $2.5 billion in 2012. Deficits mean borrowed money. Borrowed money means paying interest which means the amount to be paid back is higher than the amount received. Which is stupid and should be avoided whenever possible.
Teaching unions generally also police their own members and firing teachers for being bad at their job is extremely difficult. This is a huge problem in teaching since they are molding young minds to either enjoy learning or hate school. A bad teacher early on can change the course of a life dramatically. Good teachers can do the same in a positive way. Being unable to fire the bad means not being able to hire the new, young, and still enthusiastic whom I often found to be the best teachers when I was growing up.
Currently, our Professional Service Association of Foreign Service Officers (PAFSO) are striking. They are the ones who provide visas to people coming to Canada including foreign students who spend lots of money here. The union's president Tim Edwards says that a failure to resolve the dispute will likely cost Canada's economy upwards of a billion dollars if not resolved by the fall and has likely already cost as much as $280 million. It has also damaged Canada's reputation as a place to try and send your kids to school in addition to inconveniencing huge numbers trying to enter the country. This is clearly a problem you can't have with private-sector unions.
As corporate profits remain high, many may say that we should not be reducing public-sector wages but increasing those of the private-sector to the same level. Agreed, we should. Scandinavian countries have shown that this model can work. However, that would take some major policy changes regarding free-trade, off-shoring, and acceptable rates of taxation. We don't really have time for that before our debt becomes a problem.
An immediate answer would be to tie public-sector wages to the private sector's so as to not become dangerously overwhelming. This would mean that our public servants would work harder to get people better wages in the private sector since that is how they themselves would get better wages. And if they got too greedy pushing up minimum wages and people lost jobs that moved away, that would need to be added into the calculation as well. Essentially a move to performance-based pay for the government as a whole so that spending on government services today can never be pushed onto future generations. At the moment, the irony is that those supporting public-sector unions are actually hurting private-sector unions since the former has caused resentment amongst the public to unions in general. Toronto Mayor Rob Ford basically rode this wave of resentment into office.
Of course there are other things Canada should be doing to cut our deficit and lower our debt. Having our provinces not compete with each other in a race to the bottom over resource extraction royalties would be a good start. When ex-Alberta Premier Ed Stelmach tried to raise royalty rates, oil companies complained and moved to Saskatchewan and BC who accepted less money for their fuel. This is nonsense within a single country that has transfer payments. A unified face and bargaining position would have gotten more money for less of our fossil fuels. A family store doesn't work if members are trying to undercut each other by selling the family's products for less and less just because they individually get to keep a slightly larger chunk of it. But that's a rant for another time and any policy change would be an extremely hard sell in any case, what with the West's lingering resentment of Pierre Elliot Trudeau's National Energy Policy and all.
Simply put, public-sector unions are not required like private-sector ones are and they are dangerous to a country's ability to function. Unions are supposed to get more of the profits to the workers who create them but government isn't about making profit, it's about spending it. Their dispute settlement mechanism that allows employees fair treatment can be kept but the collective bargaining aspect is bankrupting us. Canada's debt topped $1.2 trillion with $42 billion of it being added from 2012-13. That's up $350 billion from 2007-8. As a young person, I gotta say I'm not too impressed with you baby boomers who have left me such a hefty burden. We may be coming out of the recession and deficits are expected but we are also having trouble as our housing bubble becomes more blatant and our consumer debt-to-income ratio sits at an uncomfortable 161.8%. When the bubble bursts, we are going to be in trouble and the spending cuts need to happen yesterday. We're out of the recession state right now. If we're too deep in debt and our taxes are too high while things are going all right, how is our government going to cut taxes and provide stimulus funds to alleviate another recession? It's not raining right now which means it is time to fix our roof. Fixing it is much harder once it starts pouring.
We have a massive country with almost unimaginable resources.
We really should not be doing this poorly.
AS
-Franklin D. Roosevelt
When people hear my opinions that I so enjoy spouting, they tend to assume I'm left-leaning on the political spectrum. And I suppose they are correct.
I generally believe that government should not legislate morality and should instead focus on protecting individual rights that don't harm others. I believe in some government intervention in the economic sector to prevent excessive concentration of wealth that allows dynasty builders to unduly influence and corrupt the democratic process. I also believe that a welfare safety net does more good than harm overall and should not be undone just to punish a few cheats. Mind you, I don't agree with the leftist trend towards nanny-stating and the legalizing of political correctness but that's a topic for another day.
Most people in hearing my views would believe I also support unions and organized labor. And I do. Unions have been responsible for many of the social gains that resulted in North America having an enviable middle-class. In the 60s and 70s, they allied with the civil rights and anti-war movements which are both causes I feel are worth fighting for. Although the gains of unions in the past have made them partially redundant since these gains have been enshrined in laws that apply to all, having unions fight for a larger slice of the profits in those sectors that cannot be off-shored means that wealth is spread around, purchasing power is increased, and our economy is stronger.
Of course, not all unions are equal. Many of them are top-heavy and are more about enriching the leaders or allowing them to pursue pet causes the union as a whole doesn't care about than actually benefiting the workers. In many cases, they have also given up on the social progress aspect and are simply self-interested groups that try to get the best deals for their workers. Which is fair if not quite ideal. And due to the previous gains of unions, most workers today have not had to fight for what are now seen as basic workers rights. This makes their attachment to their unions less meaningful and the original reason for their existence less understood. But overall, I believe that unions remain a useful and necessary feature of society. Off-shoring jobs to countries with cheap labor has tremendously weakened them but that doesn't make them irrelevant. Organized labor remains the main check to organized capital which is essential considering that corporate profits are sky-high while developed nations where they sell their goods like Canada run large deficits.
Now to the meat of this post. Considering what I've said, you may find it surprising that I'm vehemently against a certain kind of union: Public-sector unions. The fact is, in Canada, 71% of government employees were unionized as of last year compared to only 16% of private-sector employees. Public employees also average out to be making 12% more than those in the private sector. Arguably, this is a result of their increased unionization rates since, across Canada, unionized employees make $4.97 more per hour. Traditionally, people in the public sector have made less than those in the private but enjoyed benefits like stronger pensions, better health benefits, more vacation time, and greater job security. Now the public sector still has those things and makes more money to boot. This is a problem because public-sector employees are paid for with tax money from the private sector. Of course, the public sector also pays taxes but that money comes from the private-sector's taxes first.
Let me lay out my main reasons I have a problem with public-sector unions. First, the government already tends to be generous with its employees even in countries where they are not unionized. They are the hands of government and their loyalty is necessary to running the country and being an effective government that is capable of getting stuff done and being re-elected. The higher-ups who set pay can't really give themselves more if they don't give it to all government employees without building problematic resentment. It's not like in the private-sector where money given to employees is money not enjoyed by the owners so wages are pushed to the floor. People in government who set employee wages don't personally get to keep money they don't give to their employees so they will tend to be a bit freer with it.
Second, there is no self-correcting mechanism for over-greedy unions like there is in the private sector. If pay and benefits are too much, it will be like what happened to the Big 3 US car companies and they will go under, costing the union their jobs. Of course they were saved by government funds in that case but that doesn't usually happen. Public-sector employees, on the other hand, can always demand more because the government can simply raise taxes and take more money from other areas to pay them. This can technically bankrupt the country but that is kinda the result we are hoping to avoid here and makes greedy public unions dangerous for everyone.
Third, unions and striking go hand-in-hand. Striking is the refusal to work en masse until demands are met. This generally isn't a problem in the private sector except where key services have been privatized. It doesn't matter if I can't go into Burger King because their employees are on strike. I'll go to a different food hole. However, like FDR says in the above quote, it is deadly serious when government employees go on strike, at least in some areas. If your kids can't go to school because teachers are on strike or your house burns down because firemen are on strike or you mail doesn't arrive because mailmen are on strike, these are serious issues that compromise the whole society's functioning. This makes their ability to strike both very dangerous and extremely effective since we need them. The economist Thomas DiLorenzo went as far as to say that "The enormous power of government-employee unions effectively transfers the power to tax from voters to the unions. Because government-employee unions can so easily force elected officials to raise taxes to meet their "demands," it is they, not the voters, who control the rate of taxation within a political jurisdiction."
Due to this, some government jobs have it written into collective bargaining agreements that they cannot strike but others do not. Striking sometimes occurs regardless.
In 2011, the British Columbia Teachers Federation's contract expired. For the new one, they demanded a 15% wage increase over 3 years (at a time of only 2.5% inflation), additional benefits, control over class sizes, additional leave, and more paid preparation time. Illegal strikes have been considered but not employed as of yet in order to get these. Their minimum pay was $48k and maximum was $74k, not including benefits and pensions. Although that pay is not astronomical since BC is expensive to live, it is worth remembering that teaching is an extremely desirable profession. You get the summers off and many consider it fulfilling to work with kids. Lots of people train for it and there are always more young grads looking for positions. This wage hike demand was also coming at a time when BC was trying to stop their deficit spending which had reached $2.5 billion in 2012. Deficits mean borrowed money. Borrowed money means paying interest which means the amount to be paid back is higher than the amount received. Which is stupid and should be avoided whenever possible.
Teaching unions generally also police their own members and firing teachers for being bad at their job is extremely difficult. This is a huge problem in teaching since they are molding young minds to either enjoy learning or hate school. A bad teacher early on can change the course of a life dramatically. Good teachers can do the same in a positive way. Being unable to fire the bad means not being able to hire the new, young, and still enthusiastic whom I often found to be the best teachers when I was growing up.
Currently, our Professional Service Association of Foreign Service Officers (PAFSO) are striking. They are the ones who provide visas to people coming to Canada including foreign students who spend lots of money here. The union's president Tim Edwards says that a failure to resolve the dispute will likely cost Canada's economy upwards of a billion dollars if not resolved by the fall and has likely already cost as much as $280 million. It has also damaged Canada's reputation as a place to try and send your kids to school in addition to inconveniencing huge numbers trying to enter the country. This is clearly a problem you can't have with private-sector unions.
As corporate profits remain high, many may say that we should not be reducing public-sector wages but increasing those of the private-sector to the same level. Agreed, we should. Scandinavian countries have shown that this model can work. However, that would take some major policy changes regarding free-trade, off-shoring, and acceptable rates of taxation. We don't really have time for that before our debt becomes a problem.
An immediate answer would be to tie public-sector wages to the private sector's so as to not become dangerously overwhelming. This would mean that our public servants would work harder to get people better wages in the private sector since that is how they themselves would get better wages. And if they got too greedy pushing up minimum wages and people lost jobs that moved away, that would need to be added into the calculation as well. Essentially a move to performance-based pay for the government as a whole so that spending on government services today can never be pushed onto future generations. At the moment, the irony is that those supporting public-sector unions are actually hurting private-sector unions since the former has caused resentment amongst the public to unions in general. Toronto Mayor Rob Ford basically rode this wave of resentment into office.
Of course there are other things Canada should be doing to cut our deficit and lower our debt. Having our provinces not compete with each other in a race to the bottom over resource extraction royalties would be a good start. When ex-Alberta Premier Ed Stelmach tried to raise royalty rates, oil companies complained and moved to Saskatchewan and BC who accepted less money for their fuel. This is nonsense within a single country that has transfer payments. A unified face and bargaining position would have gotten more money for less of our fossil fuels. A family store doesn't work if members are trying to undercut each other by selling the family's products for less and less just because they individually get to keep a slightly larger chunk of it. But that's a rant for another time and any policy change would be an extremely hard sell in any case, what with the West's lingering resentment of Pierre Elliot Trudeau's National Energy Policy and all.
Simply put, public-sector unions are not required like private-sector ones are and they are dangerous to a country's ability to function. Unions are supposed to get more of the profits to the workers who create them but government isn't about making profit, it's about spending it. Their dispute settlement mechanism that allows employees fair treatment can be kept but the collective bargaining aspect is bankrupting us. Canada's debt topped $1.2 trillion with $42 billion of it being added from 2012-13. That's up $350 billion from 2007-8. As a young person, I gotta say I'm not too impressed with you baby boomers who have left me such a hefty burden. We may be coming out of the recession and deficits are expected but we are also having trouble as our housing bubble becomes more blatant and our consumer debt-to-income ratio sits at an uncomfortable 161.8%. When the bubble bursts, we are going to be in trouble and the spending cuts need to happen yesterday. We're out of the recession state right now. If we're too deep in debt and our taxes are too high while things are going all right, how is our government going to cut taxes and provide stimulus funds to alleviate another recession? It's not raining right now which means it is time to fix our roof. Fixing it is much harder once it starts pouring.
We have a massive country with almost unimaginable resources.
We really should not be doing this poorly.
AS
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