Monday, November 21, 2011

Sectoral Bargaining for British Columbia?

I have just returned from the Parkland Conference conference in Edmonton this weekend, at which  I heard a talk by Alberta Federation of Labour president Gil  McGowan.  He mentioned  that the #1 item on the B.C. Federation of  Labour wish list is a move to European-style sectoral bargaining, which would force major employers to bargain for the entire industrial sector rather than on just a workplace-by-workplace basis.  This would be a radical change, and the  B.C. NDP should be forced to clarify how it intends to respond to this demand.

Canadian Centre for Policy Alternatives economist Marc Lee has recently described sectoral bargaining this way:

Unions have made some headway in the low-wage service sector, but small shops and high turnover confound organizing. Sectoral bargaining is an approach to unionizing the service sector that would give broad sectors (retail, restaurants, security, etc) a vote on whether to demand collective bargaining and if approved, different unions could then make their pitches on ability to represent those workers. This would quickly increase union density across the economy and lead to wage compression. For employers, it puts all work on a level playing field, so that there are no competitiveness issues, and wage increases would generally be passed on to consumers in the form of higher prices. Another related model to study is the German model of regional wage-setting institutions, which goes even deeper to include works councils (shop-level management practices that include workers in decision making) and co-determined boards (that give workers in large companies half the seats on the board).

Would it be a good thing?  My experience studying and teaching comparative political economy favourably inclines me toward broader sectoral bargaining and even centralized cross-sectoral bargaining, not primarily because it makes unions stronger, but because it makes unions both act and appear to act less like narrow interest groups.  For example, in Sweden,  it is not uncommon for trade union leaders to restrain wage demands or to be receptive to technological change in one part of the economy in order to help workers in another area or to save taxpayers money.  On the other hand, it might not be good for employment and investment  to have generally higher sectoral wages than those being bargained in the rest of Canada and the United States.

'Trade unions have always had two faces, sword of justice and vested interest ' (Flanders, 1970: 15).  James Medoff and  Richard Freeman make a similar point in their article,"The Two Faces of Unionism" (1979). While a change to the B.C. Labour Code to strengthen collective bargaining is a foregone conclusion if the NDP is returned to office, a more interesting question is whether social unionism can be strengthened without simply increasing the monopoly power of unions to raise wages, thereby increasing both inequality (vis a vis unorganized workers) and inefficiency (due to labour market rigidities).  The reason that this question interests me is  that while the economic monopoly power of unions can be expected to be curtailed as soon as a right of centre party is returned to power, a successful advance of social unionism  could become a permanent achievement. At least, that is my hope.

{Economics Addendum:    "International competitiveness with respect to the U.S. and other developed countries could be a problem for B.C. only under three conditions: first, if this province's wages rose much above those in the rest of the country; second, if the real cost of production in B.C. rose relative to the real cost to our competitors; third, if the Canadian exchange rate appreciated with respect to the currency of a country specializing in the production of a principal B.C. export." --Robert C. Allen, "Trade Unions and the B.C. Economy,"  in Restraining the Economy (1986) p.227.   What needs to be said about this in the current context is that migration within Canada generally prevents the first possibility, and that the second and third conditions need to be both verified empirically.  Even if  the second or third conditions are met, it would be quite a leap  to the conclusion that 'trade unions have too much power'.}

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