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Public Sector Unions and Government Restraint


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Title: Public Sector Unions and Government Restraint

Public Sector Unionsand Government Restraint
  • Week 8

United Nations Universal Declaration of Human
  • Article 23 (4) Everyone has the right to form
    and to join trade unions for the protection of
    his or her interests.
  • http//

International Labour Organization (ILO), an
agency of the United Nations
  • In its constitution (1919), the ILO affirms
    freedom of association as a global labour
  • 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.

Recent Labour Conflicts
  • Jim Stanford. Raitts Three Principles for
    labour relations only run one way, Globe Mail.
    November 2, 2011.
  • http//
  • Contracted out transit service in York Region is
    currently experiencing a strike.
  • http//

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.

Development of unions in Canada
  • Until 1872, union activity was illegal in Canada.
    Yet workers had formed unions and went on strike
  • In 1872, thousands of workers in cities and towns
    throughout southern Ontario and Quebec, went on
    strike to secure the nine-hour day.
  • http//
  • 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//

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
  • 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

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.

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
  • the North-West Mounted Police fired into a crowd
    killing two strikers.

Winnipeg General Strike, 1919
  • Workers in other cities struck in sympathy with
  • 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

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
  • 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).

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.

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
  • banned strikes during the life of a collective
    agreement, banning sympathy or solidarity strikes

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
  • http//

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.

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,
  • Merely an advisory board, involving consultation
    with public employees

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.

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
  • Rise of the CCF
  • Rise of industrial unionism

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

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

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
  • estimated that public sector union membership
    increased from approximately 183,000 members in
    1961 to 1.5 million members in 1981 (Rose, 2007

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.

Labour Movement Today
  • Uppal, Sharanjit. 2011. Unionization 2011
    Perspectives on Labour and Income. Vol. 23, No.
    4. Winter. Statistics Canada Catalogue no.
  • 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

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)

The Backlash Business Militancy and Public
Sector Restraint
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

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

The International ContextAmerican Leadership
  • 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,
  • Iranian Revolution, 1979

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.

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.

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

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
  • 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.

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),
  • Montreal Economic Institute, 1999
  • Frontier Centre for Public Policy, 1999

The Backlash Neoliberal Citizen Groups
  • National Citizens Coalition, 1967
  • Canadian Taxpayers Federation, 1990

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).

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.

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

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).

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.

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

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

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

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

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).

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.

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//

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

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,
  • After 1995, ongoing changes in transfers rapidly
    reduced the redistributive role of the Canadian
    state (Osberg, 2008 30).

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).

  • 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.

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

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).