Unions living in ‘darkest hours’

By Michael McCullough, Vancouver Sun, Tuesday 02 September 2003

B.C. Fed chief warns that privatization, contracting-out, threaten labour movement

B.C.'s labour movement is living through one of the darkest hours in its history, B.C. Federation of Labour president Jim Sinclair said Monday.

There are difficult challenges we're facing this year, probably the biggest challenges we've faced, Sinclair said in a special Labour Day interview with The Vancouver Sun.

Chief among them are the erosion of collective bargaining, privatization, poverty and stalled economic growth, Sinclair said. Virtually all these perils he blames on the provincial government of Gordon Campbell.

Sinclair said the Campbell Liberals have undermined free collective bargaining by tearing up public-sector contracts and taking away workers' right to strike. Private-sector workers also face a more employer-friendly Labour Code.

Sinclair called privatization and contracting out the cancer eating away at living standards in this province.

While moves to privatize B.C. Hydro and BC Rail are stupid economically in terms of customer service, jobs and the economy, he took special objection to government efforts to contract out laundry and food services in hospitals and allow more private clinics.

That's slowing down the care in the public system and speeding it up for people who have money, he said. He said the largely private health-care system in the United States is bankrupting corporate health insurance plans, whereas Canada's represents a huge competitive advantage.

Sinclair dismissed arguments in favour of privatization, such as the fact that while an in-house hospital laundry or Crown-owned BC Rail tends to drain public finances, a private laundry service or railway contributes to them by paying corporate income, property and other taxes. By lowering taxable wages and charging more for services than the cost of delivery in order to make a profit, privatizing things is more expensive for governments, he shot back.

Sinclair sidestepped the issue that workers' retirement funds—including union pension plans—depend on private-sector companies' maximizing their profits in order to meet their investment goals and provide income for a comfortable retirement.

The business pages look more like the crime pages these days, he said. Before business starts pointing fingers at the public sector, they'd better look in their own backyard.

Rising poverty represents another threat to the province and its working people, Sinclair continued. Poverty rates in B.C. have risen over the past two years and the gap between rich and poor has widened, he said. Even as the province has lagged economically, CEO pay has grown 36 per cent and the number of millionaires has doubled, he said.

While acknowledging that the income gap has been widening in virtually every developed country for decades, the B.C. Liberals are making it worse, he insisted.

There is a tendency [in today's economy] to make the rich richer and the poor poorer. The question is whether the government is going to act to try to stem that or encourage it. We have a government that encourages that gap's getting bigger through tax cuts, through wage loss, through tearing up collective agreements, through cutting welfare benefits. Our government is leading the charge to make it bigger, not fighting to make it better.

The B.C. Fed president noted that governments with activist social welfare states, such as Sweden, Denmark and Norway, tend to have high standards of living. Liberal policies such as the $6 minimum wage for youth just make poor people poorer, he said.

I would make the case that poverty is bad for business, Sinclair said.

Sinclair's final lament was for the provincial economy. As he sees it, W.A.C. Bennett, Dave Barrett and even Bill Bennett were builders who brought prosperity to the province in the 1950s, 1970s and parts of the 1980s.

We've got to build the province, not sell it. What we're seeing mostly is a government that is selling things, not building the province, he said.

Sinclair noted that youth unemployment has been rising in the midst of a skills shortage. Meanwhile, Victoria is raising tuition and cutting support for apprenticeship programs.

We don't need to widen the highway to Whistler as our first priority. We need to widen the highway to post-secondary education, he said.

Last week's Fraser Institute study that showed B.C. having the second-worst labour market performance in North America, in large part due to its high rate of unionization and public sector employment, was more of a polemic than a scientific study, Sinclair said.

To improve the province's job creation and productivity, the right-wing think tank advised the government to reduce public sector employment, introduce worker choice laws regarding unionization, introduce more flexibility in labour relations laws, reduce effective minimum wages and make labour relations boards more transparent and open. To be competitive in North America, the study concluded, B.C. should reduce its rate of unionization and public-sector employment from 35.4 per cent and 16 per cent, respectively, to the American average of 14.6 per cent and 12 per cent.

Their call in that study is to bump 300,000 people out of their unions. That's what they're calling for to make a better economy, to get rid of pensions for union folks, to get rid of equal wages, to get rid of the $5 advantage in the wage bill for unionized workers and that's going to make a better economy. Get rid of the minimum wage and we'll have a better economy, he said.

Having a 14-per-cent unionization rate will not improve living standards for British Columbians.

Sinclair said there are no examples around the world of jurisdictions where the Fraser Institute's vision has made life better for the average person.

Their study basically says if you follow a free market system completely and you deregulate all relationships, get rid of government and get rid of unions, you'll have a better place. I say go look at Rwanda, he said.

He pointed to a World Bank study released last February that high rates of unionization can lead to lower unemployment and inflation rates, higher productivity and faster adjustment to economic shocks.

B.C. is currently home to between 550,000 and 600,000 union members, the vast majority affiliated with the B.C. Fed since the B.C. Teachers Federation entered the fold over the past year.

Though currently under pressure from the forest industry's woes and public-sector layoffs, the rate of unionization in the workforce has been steady at around 35 per cent for 15 years after some gains in the 1980s. Unionization peaked in B.C. during the 1950s.

Unionization in Canada averages 32.2 per cent.

If you look at the people fighting the fires and taking care of the people in the SARS crisis, they're not getting a bonus every year. They get a paycheque, Sinclair said.

They should be respected 365 days a year, not just when we suddenly need them.