Author Archives: CanucksBanter

I’ve Always Hated The Idea Of Labor Unions, But It May Be Time To Reconsider

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Henry Blodget Dec. 2, 2012  http://www.businessinsider.com

I’ve always hated the idea of labor unions.

Why?

Several reasons.

  • They create an “us versus them” culture within companies, instead of putting everyone on the same team
  • They create a culture of entitlement
  • They restrict flexibility and hurt competitiveness
  • They drive companies to move jobs out of the country, to places where there are no unions
  • They often become career employment for their leaders, who pay themselves well (much better than the workers they’re representing)
  • They maintain ludicrous compensation and benefit levels for jobs based purely on seniority (some bartenders in one of the New York hotel unions, for example, apparently make ~$200,000 a year)
  • They force companies to treat all union employees equally, regardless of the relative skill and value of particular employees–thus reducing incentives for people to do a great job
  • Etc.

And all those are indeed negatives.

But we’ve now developed a bigger problem in this country.

Namely, we’ve developed inequality so extreme that it is worse than any time since the late 1920s.

Contributing to this inequality is a new religion of shareholder value that has come to be defined only by “today’s stock price” and not by many other less-visible attributes that build long-term economic value.

Like many religions, the “shareholder value” religion started well: In the 1980s, American companies were bloated and lethargic, and senior management pay was so detached from performance that shareholders were an afterthought.

But now the pendulum has swung too far the other way. Now, it’s all about stock performance–to the point where even good companies are now quietly shafting other constituencies that should benefit from their existence.

Most notably: Rank and file employees.

Great companies in a healthy and balanced economy don’t view employees as “inputs.” They don’t view them as “costs.” They don’t try to pay them “as little as they have to to keep them from quitting.” They view their employees as the extremely valuable assets they are (or should be). Most importantly, they share their wealth with them.

One of the big problems in the U.S. economy is that America’s biggest companies are no longer sharing their wealth with rank and file employees.

Consider the following two charts:

1) Corporate profit margins just hit an all-time high. Companies are making more per dollar of sales than they ever have before.

Corporate Profit Margins

Business Insider, St. Louis Fed

2) Wages as a percent of the economy are at an all-time low. This is closely related to the chart above. One reason companies are so profitable is that they’re paying employees less than they ever have before.

Wages To GDP

Business Insider, St. Louis Fed

When presented with these charts, many people invoke one of two arguments. First, technology is making employees irrelevant. Second, low-skill jobs command low pay.

Both of these arguments miss key points: Technology has been making some jobs obsolete for 200+ years now, but it is only recently that corporate profit margins have gone through the roof. Just because you can pay full-time employees so little that they’re below the poverty line doesn’t mean you should–especially when retention is often a problem and your profit margin is extraordinarily high.

More broadly, what’s wrong with this picture?

What’s wrong is that an obsession with a narrow view of “shareholder value” has led companies to put “maximizing current earnings growth” ahead of another critical priority in a healthy economy: Investing in human and physical capital and future growth.

If American companies were willing to trade off some of their current earnings growth to make investments in wage increases and hiring, American workers would have more money to spend. And as American workers spent more money, the economy would begin to grow more quickly again. And the growing economy would help the companies begin to grow more quickly again. And so on.

But, instead, U.S. companies have become so obsessed with generating near-term profits that they’re  paying their employees less, cutting capital investments, and under-investing in future growth.

This may help make their shareholders temporarily richer.

But it doesn’t make the economy (or the companies) healthier.

And, ultimately, as with any ecosystem that gets out of whack, it’s bad for the whole ecosystem.

So, for the sake of the economy, we have to fix this problem.

Ideally, we would fix it by getting companies to voluntarily share more of their wealth with their employees. But the “shareholder value” religion has now been so thoroughly embraced that any suggestion of voluntary sharing is viewed as heresy.

(You’ve heard all the responses: “The only duty of a company is to produce the highest possible return for its owners!” “If employees want to make more money, they should go start their own companies!” Etc. Beyond basic fairness and the team spirit of we’re-all-in-this-together, what these responses lack is any appreciation of the value of personal loyalty, retention, respect, and pride in the workforce. People love working for companies that treat them well. And they’ll go to the mat for them.)

Anyway, it would be great if companies would start sharing their wealth voluntarily. But, as yet, with a couple of notable exceptions (Apple recently gave its store employees a raise it didn’t need to give them), they’ve shown no signs of doing that.

So if companies can’t be persuaded to do this on their own, maybe it’s time to rethink our view of labor unions.

Although correlation is not causation, the chart below suggests that labor unions might be able to help induce companies to share their wealth, at least in some industries.

This chart is from EPI. It is based on the work of Piketty and Saez (the deans of inequality research).

The chart shows the correlation between the share of the national income going to “the 1%” with membership in labor unions.  What it suggests is that, as unions have declined, income inequality has soared.

Income Union Membership

EPI, Felix Salmon

Again, right now in this country, we have the painful juxtaposition of the highest corporate profit margins in history, combined with one of the highest unemployment rates in history. We also have the lowest wages in history as a percent of the economy.

That’s not good for the economy… because rich people can’t buy all the products we need to sell to have a healthy economy (they can’t eat that much food or drive that many cars, for example).

And it’s also just not right.

Healthy capitalism is not about “maximizing near-term profits.” It is about balancing the interests of several critical constituencies:

  • Shareholders
  • Customers
  • Employees
  • Society, and
  • The Environment

It’s time more of our business leaders started to understand that.

Bateman Advocates A Race To The Floor For Minimum Wage….You First, I’ll Give Ya A Push….Just Saying….

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August 3, 2013   Updated on August 15, 2013

By Andrew Phillip ChernoffJust-saying

I came across an article titled, “The pay of government workers is way out of line” by Jordan Bateman.

At the start of his opinion piece, Bateman, makes a conclusion that is somewhat  true in municipal politics, but also provincial, federal politics. Even private business, multi-national companies and private corporations practice overpaying their upper management people.

Bateman states:

    • Taxpayers and watchdogs often focus their attention on the top of the government salary spectrum. Government executives are increasingly overpaid, especially at the municipal and regional district level. And the problem is growing.
    • For example, the District of North Vancouver, had 62 employees making $100,000 or more in 2011. A year later, that number had jumped to 93.

Then Bateman goes off into his way out stupor and churns out that “taxpayers are overpaying for labour throughout the system.”

Provincial government deals with their own government employees.

Municipalities and regional districts are separate and distinct from the provincial government and negotiate on their own with their respective employees.

Front-line municipal and regional district workers are not overpaid in my opinion.

Front line workers have wages and benefits that have been negotiated in fair and good faith bargaining in line with their respective municipal and regional district finances of which their councils and boards are charged with being proper stewards of.

Management contracts are not negotiated in the same manner as above.

The public never hears anything in the press, radio or television as to what the management staff in municipalities and regional districts are getting in their contracts….unless somebody applies under the Freedom of Information Act. Through the Statement of Financial Information, which is made available every year, for the last audited year, taxpayers are able to find out some salaries of municipal staff and council members.

Yet the employees have a very public collective agreement that spells it all out. Yet, management contracts are hidden under private and confidential legislation for the most part…..just saying

Front line workers at the municipal and regional district level  do the grunt work out in the field. It is the non-management employees that have the qualifications and certification to do the work on the front line. And work they do.

Front line workers correct the mistakes of contractors; don’t play politics when working; and are the first to hear of the public dissatisfaction.

Municipalities and regional districts MUST balance their budgets.

Provincial governments while they should balance their budgets, are more often than not, tabling unbalanced budgets.

Bateman then defies all sense of logic by taking on the City of Burnaby with its desire to hire a bartender for a wage negotiated through collective bargaining, providing a wage higher than minimum wage:

  • The City of Burnaby is looking for a bartender. B.C.’s minimum wage is $10.25 per hour but liquor servers can legally be paid as little as $9 per hour, plus tips (where they make their real living). Ignoring the bizarre idea that property taxpayers have a bartender on the payroll, Burnaby should be able to get a suitable swill slosher for $10.25 per hour, tops.
  • But this is government – where your hard-earned money gets spent freely. Instead, Burnaby is offering its future bartender $13.65 per hour and 12 per cent cash-in-lieu of benefits, plus tips. That’s $15.29 per hour plus tips, for a job that could be filled for 70 per cent less.

For twelve years the corporate tax rate in BC with a BC Liberal government in power was kept at 10 per-cent.

During that same period, BC has consistently had the worst child poverty rate in Canada and the worst reputation for providing support to highly vulnerable families and children in Canada as well.

According to the article, “ Why does B.C. have the highest poverty rate in Canada?” by Iglika Ivanova:

“The reason why B.C. has the worst poverty rates in Canada is not poor economic performance but lack of social spending, a large low-wage sector, and big gender pay gaps, especially at the low end.

The government needs to step up with a comprehensive poverty reduction plan to boost social supports to a level that covers basic costs of living. Other immediate priorities include providing affordable, universal child care for families (for example, the $10/day plan) and investing in affordable housing for families.

Training and education also jumps out as an area of government responsibility that hasn’t received enough attention over the last decade. That’s why many of the newly created resource sector jobs aren’t going to unemployed British Columbians but to temporary foreign workers and/or migrants from other provinces because we don’t have the skills needed. And since resource expansion is essentially the basis of our government’s Jobs Plan, such job growth is unlikely to make much of a dent in poverty rates.

But while the government must play a leadership role here, poverty is not just the government’s problem. All citizens have a responsibility to tackle poverty, including those who own and run businesses. Business managers are understandably focused on their bottom line, but as members of the community they need to consider the kind of jobs they create, and the kind of life their employees can afford on the wages they pay. Is there job security? Are the wages so low or the shifts/hours so few that they keep the employees in poverty?

35 Vancouver employers have committed to pay a living wage to all their workers and more large companies should follow their example.

But not all jobs created in B.C. are well-paying, family-supporting jobs that offer benefits and a reasonable level of economic security. Despite recent minimum wage increases, a person working full-year full-time on minimum wage earns less than the poverty line for a single person in Vancouver. There has been an explosion of unpaid internships, with the most recent scandal exposed by CBC here.

The bottom line is that we need a combination of good quality jobs and social supports for families who have fallen on hard times. This is particularly important now when we’re seeing a worrisome and rather steep increase in poverty in what’s arguably the best measure of poverty, Statistics Canada’s Market Basket Measure (see here).

Poverty is not an intractable problem, other provinces and countries have taken action and are seeing results. B.C. should too.”

Would Bateman regulate everybody, including himself, to a below poverty line lifestyle?

I call on Bateman to give up his upper tax level “living wage” for the bartender’s job and wage for one year, and then tell his readers the same thing he is saying now.

It is clear that the City of Burnaby, and other municipalities, regional districts are doing their part to provide above minimum wage jobs where they can; to insure stable economies in their communities and regions, where the monies they give in wages are not only possible but are put back in local and regional economies providing spin off jobs and new business opportunities; diversifying local and regional economies at the same time.

Bateman further proposes legislation similar to CETA, that would take local autonomy and control away for decision making by municipalities and regional districts.

Once again, Bateman lacks knowledge and shows his ignorance and audacity to impose his political will and beliefs for all municipalities and regional districts, considering he lives in one community and belongs to one regional district.

Municipalities and regional districts levy taxes in their respective areas. The provincial government does not provide municipalities and regional districts with their operational budgets.

I would tread lightly Bateman, when you suggest, a provincial Compensation Equity Act.

Municipal and regional district employees are not provincial government employees. The Community Charter and Local Government Act, set out the powers of the municipalities and regional districts.

Further, many BC municipalities and regional districts have told the provincial government of their concerns and lack of support for CETA.

I guarantee Bateman if you come to my community and try to impose your ridiculous ideas, you would be met by concerned taxpayers who may not take to kindly to you interfering with local autonomy and local democratic decision making for affairs affecting the community and region.

Further, I would find it difficult to believe that what happens in Penticton, Richmond, Kelowna and the regional districts those communities reside in, presents hardship and dire tax consequences to his community and regional district.

If anything, people from those communities visiting where he lives, would actually aide his community as they spend their hard earned dollars, helping his local business; help to provide living wages for workers including  students going to high school and earning money for post secondary education.

Would Bateman really deny what he benefited from?

I would argue that multinationals and corporations benefiting from low cost labour in BC, ravaging our natural resources; leaving taxpayers to live with the cost to our wildlife, environment and water, are the leaders behind the inequality issues in this province.

They take……10 per-cent corporate tax rate for twelve years, until this year when it was changed to…..wait for it…to 11 per-cent.

They don’t give back…..why?

They use tax payers dollars; take our raw materials; abuse BC labour workers; make gross profits; do nothing to improve well-paying, family-supporting jobs that offer benefits and a reasonable level of economic security.

Bateman’s ideas, and the system he proposes doesn’t work for the best interests of British Columbians, municipalities or regional districts.

If Bateman is advocating a race to the floor for  “minimum wage”, then by all means…..you first….. lead the way Bateman…..get out in front…..I’ll give you a push……just saying…..

COPYRIGHT ANDREW PHILLIP CHERNOFF 2013

CUPE will resume K-12 bargaining in August

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http://cupe.bc.ca   

August 1, 2013

VANCOUVER—CUPE is eager to get back to the bargaining table to reach a fair and reasonable settlement. Tentative dates have been scheduled for the second week in August and CUPE representatives emphasize that a fully-funded wage increase is the solution to ending the bargaining impasse.

“CUPE education workers keep BC schools clean, safe, and inclusive,” said Colin Pawson, Chair of the CUPE BC K-12 Presidents’ Council. “The government needs to get back to the bargaining table with funded offers in order to avert more job action in the fall.”

Talks broke off earlier this spring when it was clear that the government had not given the BC Public School Employers’ Association (BCPSEA) any mandate to reach a settlement.

In a news release on Wednesday, July 31 the government announced that it would be replacing BCPSEA’s board with Michael Marchbank of the Health Employers’ Association of BC. CUPE expects that BCPSEA will now have a mandate to conclude bargaining with a fair provincial settlement.

It has been more than four years since the education assistants, clerical staff, trades, custodians, bus drivers and other workers represented by CUPE have received a wage increase. Virtually all of the 57 CUPE locals representing education workers have achieved a strike mandate.

The Canadian Union of Public Employees represents more than 27,000 education BC workers in the K-12 system.

– See more at: http://cupe.bc.ca/news/3130#sthash.AdR8ZQZI.dpuf

Reverse public spending cuts, introduce progressive measures to boost jobs and growth: CUPE

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Government spending cuts have increased unemployment, are slowing economic growth, and are diminishing services and standards for Canadians.

In its pre-federal budget submission to the House of Commons Standing Committee on Finance, CUPE is expressing deep concerns over the harm these imposed austerity measures are having on Canadians, and the need to strengthen social programs, like the Canada Pension Plan (CPP) and Employment Insurance (EI).

Canada’s economic growth has been much slower than it was in previous recoveries. Federal spending reductions will slow the economy by an average of one percentage point (or close to $20 billion) a year and reduce employment levels by over 100,000, as estimated by the Parliamentary Budget Office last year.

CUPE is recommending an expansion of public services that could generate hundreds of thousands of additional jobs, boost wages, living standards and economic growth. The vast majority of individual Canadians and businesses would benefit from federal government measures focused on improving public services, boosting the economy, generating jobs and reducing inequality.

CUPE also recommends expanding the Canada Pension Plan by phasing in modest contribution increases over seven years that would in time double benefit levels. Improving CPP would benefit all workers, help stabilize existing workplace pension plans, increase economic security and stability for communities, reduce poverty and reduce pressure on social assistance programs.

When CPP contribution rates were last increased, unemployment fell significantly. The increase in contribution rates that we envision is considerably less this time. Polling shows that 75 per cent of Canadians support an expanded CPP, as do many pension experts and the majority of provinces.

CUPE is also advocating for the immediate reversal of cuts to Employment Insurance made in Bill C-38 that reduce eligibility for benefits, force claimants to take unsuitable and lower paid jobs and eliminated the EI Board of Referees.

Introducing different classes of claimants and changing access to EI benefits particularly hurts seasonal workers and those in precarious employment most, including women, youth, low income and other marginalized workers in communities across Canada. Changes to the appeals process has reduced fairness for claimants unjustly rejected. All workers are negatively affected as such changes drive down wages.

Pre-budget submissions are being accepted until August 5, 2013.

Read CUPE’s pre-federal budget submission
(357 kB)

Decert Campaign at Trail FAIR Society Successful

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By Andrew Phillip Chernoff, WKLC Member-At-Large: Trail

P1010039a  

Patsy Harmston, President BCGEU Local 309

TRAIL-It was with “a heavy heart” that Patsy Harmston, President of BCGEU Local 309, announced the result of a decertification vote of Trail FAIR and the Trail Transition House on July 31, 2013, bringing an end to those areas as BCGEU Local 309 worksites.

The vote was 21 to 18 in favour of the decertification, and showed, according to Harmston, “a divided and toxic workplace”. Voting began on June 18 and ended on July 11.

Harmston thanked the West Kootenay Labour Council, United Steelworkers Locals 480 and 9705 for “great support in holding a leafleting and barbequing  in Trail” in support of the pro union supporters.

United Steelworkers Locals 480 and 9705, along with CUPE, BCGEU Locals, the West Kootenay Labour Council and the public came out to support the members of BCGEU Local 309 in Trail with a barbeque on July 2 with speakers urging them to deal with their issues fairly, professionally and stay unionized.

To those that supported them during the decertification process, “I want to pass on to all of you a great thank you for your support. It felt really good to have you stand with us and we just can’t thank you enough.”, Harmston said on behalf of the pro union supporters at Trail FAIR and Trail Transition House.