Why I'm Not on Strike

A friend and colleague warns of a summer of discontent for Canadian labour. The BC Teachers’ Federation, he says, is about to go on strike. Telus is already out; in Regina, city workers are on the picket lines; CBC is still locked out. He sees a new t rend of labour unrest.

I’m not convinced, but I note something interesting about the labour disputes cited: the BC Teachers; Telus; Regina civic workers; CBC. All involve monopolies or tax-supported arms of government.

There is a reason. It is the same reason that, not too long ago, strikes were prohibited in the public sector.

Unions were to prevent workers from exploitation by rich capitalists for profit. But governments, note, are not for profit. And their workers are not working class. They are usually professionals making better than average incomes.

What gives?

First, the original theory of collective bargaining was fatally flawed. It ignored market economics. In any non-monopoly situation, wages will automatically find the correct level: pay too little, and your competitor steals your best workers. Pay too much, and your product becomes too expensive. Given this, if workers unionize and force employers to pay more money than they are already, the employer simply becomes uncompetitive and goes bankrupt.

This alone is why the union movement has mostly disappeared from the private sector, from all but monopoly situations, where market pressures do not exist.

For a time, the problem was avoided by allowing unions to organize industry-wide, which is to say, by allowing them to operate in restraint of trade. This never harms the rich capitalists, of course; this harms the consumer. But even this no longer works the minute consumers can purchase goods from abroad. It collapses with free trade, unless you can actually unionize an industry world-wide.

Which is of course why unions hate “globalization.”

Without such a government-enforced monopoly, unionized industries become uncompetitive and simply go bust as an entire industry. Like the US steel industry, the US car industry, the British shipbuilding industry; they can no longer compete with foreign rivals. One way or another, with a free market, unionized workers become unemployed workers.

Now, with so-called “outsourcing,” the same logic is hitting some industries that until recently had a captive market. Telus is the obvious example in the present list. If the Telus union wins, Telus and their jobs will soon disappear. The Internet breaks all telecommunications monopolies, barring an enforced monopoly on Internet provision. Without vigorous government action, or outsourcing, Telus cannot compete with foreign providers who can now enter its market.

The CBC is not a monopoly, but it has in the past had something of a captive market, at least against foreign competition. With satellite and Internet transmission, there is no way it can maintain this. It must get better, or at some point it will fade to irrelevance and the public will lose interest in funding it. Its employees are foolish to strike; but, being used to subsidies and restraint of trade, they apparently do not see this. They think they’re still in government.

For government proper, there is no such problem: government is a monopoly by its nature, a trust that cannot be busted. Here, the whole negotiating process is a sham. I have seen it myself often enough. There is no real distinction between the two sides doing the negotiating: the same individual can be “labour” in one negotiation and “management” in the next. Their offices are next to each other; they went to the same schools, have the same politics, eat lunch together in the same cafeteria or local restaurant. No confrontation between capitalist and prole: for not only is it the same class; it is the very same individual people.

Both sides have a vested interest in wages rising; because it is their own wages. Neither has any incentive to hold wages down: higher wages come out of someone else’s pocket; lower wages come out of theirs.

So why are there strikes in the public sector? In theory, they could just write themselves whatever wage they want.

And they almost do. This is why wages in the public sector are usually a good deal higher on average than in the private sector. An editor on the Editors’ Association of Canada email list marveled recently to learn that government editors could expect an hourly rate twenty times that in the book industry.

But every now and then it is good form to have a strike.

First, it preserves the illusion of a confrontation of interests.

But more importantly, a strike in public services inconveniences the taxpayer, and so can generally convince the public and politicians to accept higher wages for the workers in order to get services restored. In blunt terms, it’s a bit of a shakedown. And it is really the only situation when a strike can work: when it is a strike directly against consumers.

But the thing to understand is that even in the private sector, there is little real conflict of interest between labour and management. The conflict of interests is between producer and consumer. The difference is that, in the private sector and free market, the consumer has some power. In the public sector or in a monopoly, the consumer must pretty well shut up and pay.

He can vote another party into power; what difference does that really make to the unelected public service? At most, the new party can withdraw the service. The consumer must do without.

My friend’s alternative explanation for the rash of strikes is that there is less loyalty these days between labour and management. I think that is exactly wrong. This is an important reason why there are _fewer_ strikes, at least in the private sector, than there used to be. So long as labour is mobile, there is a free market. Management has no opportunity to underpay labour. If an exceptional worker wants more money, he can just move to a higher bidder. Why bother to strike? By the same token, labour has no opportunity to get more pay than the work is really worth; because the employer can do the same. So striking is not practical.

It is when labour is not mobile that strikes happen; because then one side or both can hope to improve their economic situation by doing so.

Note that government and monopoly workers are precisely the ones most likely to strike, and they are precisely the ones with the best long-term employment security and benefits packages. Only here is striking a worthwhile alternative to moving to a better job.