Economics for Social Democrats–But Not for the Working Class, Part Six: Collective Bargaining

In the following, I provide a series of examples taken from the Internet that illustrate that Mr. Stanford, a former economist for the Canadian Auto Workers union (now Unifor) and author of the book Economics for Everyone: A Short Guide to the Economics of Capitalism, expresses a social-democratic or social-reformist position. It is meant to complement my theoretical critiques of his writings (see for example Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One). Most of the bolded words are my emphases.

  1. Mr. Stanford, like many social democrats, tends to idealize collective bargaining. For example, he writes ( https://ppforum.ca/publications/work-after-covid-19/):

Regulatory constraints and obligations on insecure work practices (such as closing off avenues for employers to avoid normal obligations through artificial reclassification of workers as contractors), public procurement rules (establishing job quality benchmarks for publicly funded projects and services), and collective bargaining would also help to constrain the growth of precarious work — and ensure workers in these jobs are treated like human beings, not productive inputs [my emphasis]. And that will enhance the quality and safety, for all of us, of the work they perform.

In a number of posts, I have questioned whether collective bargaining and collective agreements can somehow magically transform working for an employer into a form that does not involve oppression and exploitation (see for example Do Collective Agreements Convert Working for an Employer into Decent Work? or Employers as Dictators, Part One).

2. Stanford sometimes pairs collective bargaining with “fair deal” and “decent jobs ( https://www.nytimes.com/roomfordebate/2013/12/04/making-low-wages-liveable/canada-shows-the-power-of-unions):

Canada Shows the Power of Unions

Jim Stanford

Jim Stanford is an economist with Unifor, Canada’s largest private sector union. He is on Twitter.

UPDATED DECEMBER 4, 2013, 7:12 PM

The dream of a decent, “middle class” life still exerts a powerful influence in North American culture. But we often forget that the middle class is actually a relatively recent creation. It was largely a result of working people organizing to win a decent share of prosperity, especially through unionization and collective bargaining.

A major reason for Canada’s greater income equality is that unions represent 31 percent of its workers, compared to 12 percent in the U.S.

There is an inherent asymmetry between employers and workers. Without institutional structures to strengthen workers’ position, workers get enough to survive, while owners, investors and a few professionals pocket the lion’s share of economic growth.

Auto factory wages and working conditions were traditionally poor. Unionization and collective bargaining improved incomes and security, so workers could afford home ownership, a comfortable retirement and college tuition for their kids. In other industries, too, lousy jobs became middle-class jobs, thanks largely to unions.

Many assume that a restaurant job is inherently a poverty-level job. But collective bargaining could help restaurant workers improve wages and working conditions and attain a better life.

Income distribution is far more equal in Canada than in the United States, despite the similarity of their economies. That’s largely because unions represent 31 percent of workers in Canada, compared to 12 percent in the United States. (The minimum wage is Canada is generally around $10 an hour.) Prosperity is shared more broadly.

Higher unionization in Canada is the culmination of many small differences in labor law. In most jurisdictions, unions can be certified when a clear majority of workers sign union cards. There are stronger protections against being fired for union activity (including organizing drives and strikes). Union dues are usually deducted at source by the employer and forwarded to the union. Contracts can be settled by arbitration for new bargaining units or in the event of long work stoppages. In some provinces, employers are not permitted to hire replacement workers during strikes. All of this means that Canadian workers have a better chance to form a union and negotiate a fair deal with their employers [my emphasis]

To be sure, unions are under pressure in Canada (as in the United States) from globalization and hostile employers, and the erosion of unionization would undermine Canada’s social equality. But the positive impact of collective bargaining on equality and social inclusion is still evident.

The collective action of restaurant workers brought public attention to their low pay and insecurity. By formalizing that collective power they could turn their lousy jobs into decent ones [my emphasis]

3. Even the title of one of his writings expresses his belief that somehow working for an employer can be decent; the title is Building a Decent Future of Work in Ontario After COVID-19 (July 2021) [my emphasis].

4. In another article, “Collective Bargaining and Poverty Reduction: OECD Data ( https://www.progressive-economics.ca/2014/02/collective-bargaining-and-poverty-reduction-oecd-data/#comments), Stanford tries to show that collective bargaining leads to a reduction in poverty–as defined by level of income (and not by level of wealth-producing capacity):

For a measure of inequality I chose the OECD’s standard relative poverty index: the share of the population receiving income (after tax, after transfers) less than half of the median. Again, this data is for the most recent year (2010 in most cases), and is available directly from the OECD’s on-line Income Distribution database.

The following figure illustrates the broad negative correlation between bargaining coverage and poverty: that is, the higher is bargaining coverage, the lower is relative poverty (and the more equal is income distribution)

There are at least two problems with linking collective bargaining to reductions in poverty. The first problem is that the definition of poverty limits it to the level of income and excludes the issue of the economic dependence of workers on employers and the subordination of the will of workers to the will of employers even if the wage or salary is relatively high (see “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP)). My and other workers’ wages when I was unionized worker at a brewery in Calgary were relatively high–but due to the structural situation of a market for workers on one side and both means of production (buildings, machines (such as computers), raw material, auxiliary material and so forth) and means of subsistence (food, shelter, clothing, means of transportation, and so forth) initially owned by employers as well on the other, we workers, despite having relatively high wages, were means for the purpose of obtaining more money for employers (see The Money Circuit of Capital).

The second problem is related to the first: it omits the issue of management right to dictate to workers. By focusing exclusively on the quantitative issue of level of income, the qualitative issue of the extent to which collective bargaining and collective agreements can actually enable workers to control their own lives in various directions (a more adequate definition of the absence of poverty than mere level of income) is disregarded or ignored.

In other words, the issue of the freedom of workers as workers (and not as consumers) is buried beneath the assumed definition of poverty according to the level of income. This is one of the typical tricks of social democrats. They ignore entirely the lack of freedom of workers at work and fail to address the extent to which collective bargaining can somehow ensure workers’ freedom at work–in the context of

5. In an essay written by Jim Stanford and Daniel Poon (May 2021), titled Speaking Up, Being Heard, Making Change: The Theory and Practice of Worker Voice in Canada Today, we read the following (pages 4-5):

There are many different ways to operationalize workers’ voice — some more robust and genuine than others. Effective managers often welcome informal, individual feedback from their staff: keeping an ‘open door policy,’ maintaining a suggestion box, or sponsoring more structured communication (like surveys or social media feedback). These employer initiatives can make a difference to workplace relationships and efficiency, but they are inherently limited by the management-controlled nature of the communication. The topics on which feedback is invited are usually limited; workers may not feel secure enough to express complete or honest views; and there is no  obligation for managers to respond to or enact any of the changes workers seek. Stronger and more comprehensive channels of voice can be developed within the framework of unionization and collective bargaining. In unionized workplaces, more formal and reliable mechanisms of voice can be enshrined in the terms of collective agreements. Workers are protected from reprisal or dismissal for expressing views that managers may prefer not to hear. And through collective bargaining, workers have some power to compel employers to take their views seriously, and enact some desired changes. Other ways of strengthening workers’ voice are also possible: including voice mechanisms required by government statute (such as exist in Canadian health and safety regulations), and efforts by workers to organize collective voice through non-governmental, community, or informal organizations and campaigns. [my emphasis] 

It is naïve to think that collective agreements somehow protect workers “from reprisal or dismissal for expressing views that managers may prefer not to hear.” Collective agreements may, on occasion, do so, but even unionized workers often recognize that management can retaliate in various ways (because of power to manage) that do not infringe on the collective agreement (see a rare expression of this view from a union rep in Confessions of a Union Representative Concerning the Real Power of Employers). 

This does not mean that collective bargaining and collective agreements make no difference in the level of fear among workers; they do as David Branchflower, Alex Bryson and Colin Green (2021) point out in their article “Trade Unions and The Wellbeing of Workers” (page 11): “… union workers are less fearful of job loss than previously.” 

The reference to regulatory provisions for health and safety in the context of a social process of producing our lives by means of privatized (or public ownership that in effect is itself private since it is itself controlled by an institution that employs workers as means to goals not defined by the workers themselves) are better than no regulations, but they hardly suffice to protect workers from dangers typical of situations where they work for employers. As I wrote in another post: 

Some Canadian statistics before the pandemic:

Official statistics:

More than 1000 employees die every year in Canada on the job, and about 630,000 are injured every year (Bob Barnetson, 2010, The Political Economy of Workplace Injury in Canada. Edmonton: Athabasca University Press, p. 2). The same year as the publication of that work saw 554 homicides (Tina Mahonny, 2011, Homicide in Canada, 2010. Ottawa: Statistics Canada, p. 1) —the number of employee deaths at work under the power of employers was around double the number of murders

Non-official statistics:

Steven Bittle, Ashley Chen and Jasmine Hébert report a much higher figure in their article (Fall 2018), ““Work-Related Deaths in Canada,”, pages 159-187, in Labour/Le Travail, Volume 82, page 186:

Relying on a range of data sources, and adopting a broad definition of what constitutes a work-related fatality, we generated a revised estimate of the number of annual work-related fatalities. Based on our analysis, we estimate that the number of annual work-related fatalities in Canada is at least ten to thirteen times higher than the approximately 900 to 1,000 annual average fatalities reported by the AWBC [The Canadian Association of Workers’ Compensation Boards of Canada]. This makes work-related fatalities one of the leading causes of death in this country.

Has there really been any social movement to address this carnage? Not that I am aware of. Resignation to sickness, injury and death at work (and outside work due to preventable diseases such as cancer) is part of parcel of Canadian culture (and many other national cultures).

Conclusions

It has been shown that Stanford seems to reflect the social-democratic or social-reformist point of view that collective-bargaining and collective agreements can somehow equalize the balance between the class of employers and the working class. This is far from the case. Free collective bargaining and the resulting collective agreements are perfectly consistent with the exploitation and oppression of workers–but with a more humanistic face or veneer.

Collective bargaining and collective agreements do not magically transform exploitative and oppresive working conditions (whether unionized or not) into decent work, nor do they eliminate the poverty of the working class which forces them to sell their capacity to work on the market and which forces them to serve as means for employers’ own purposes. 

Collective bargaining and collective agreements can protect workers from certain forms of reprisals by employers, but they hardly eliminate such reprisals or the threat of their use. Similarly, regulatory provisions for health and safety at work, whether through legislation or through collective bargaining or a combination of the two, can reduce the dangers of working for an employer, but the official and unofficial statistics on health and safety at work give the lie to the view that workers are protected.

In sum, Stanford’s tendency to idealize collective bargaining reflects his social-democratic or social-reformist point of view–a point of view that hardly reflects the long-term interests of workers. 

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