Union leaders will try telling you that they protect workers and ensure they’re fairly paid, while business owners trample over workers to the benefit of the greedy and powerful. But the reality — as a recent story out of Newfoundland shows — is the opposite. It’s unions that attack relatively disadvantaged workers in order to protect a privileged class.
Last month, Canada’s largest private-sector union, Unifor, published a video with the names and pictures of seven temporary workers at an aerospace factory in Gander, Nfld. where Unifor members have been locked out for nearly two years, after failing to reach a contract with managers. The intent was to publicly shame these temporary workers for going to work while the union was locked out. Despite nearly unanimous condemnation of the video across the country, the union doubled down on its action.
“Scabs need to be shamed,” wrote Unifor’s president Jerry Dias in response to the criticism. “Scabs are a force of destruction … we must continue to name and shame the scabs publicly.” Just to spell that out: Here we have Canada’s most powerful union boss, backed by hundreds of union activists, bullying seven temporary workers for the unforgivable act of taking employment at a workplace that is evidently worker friendly, but not friendly with Unifor. Keep that in mind when unions next tell you they are fighting for downtrodden workers. What they really fight for is union privilege.
Unifor isn’t just out to name and shame so-called “scab” workers. Unifor and other unions are campaigning to make it illegal for businesses to hire temporary workers to fill in during labour disputes. That is, of course, right from the labour-union playbook. In order to artificially inflate the wages and protect the privileged status of some unionized workers, the union must sabotage less privileged workers (in this case, the “scabs”) and prevent them from competing in the labour market.
Clearly, it’s the unions, not so-called scabs, that are being economically and socially destructive. The union agenda is hostile to business and profits. But without the expectations of profits, there would be few employers, little capital investment, few jobs, and low wages. That’s why, at bottom, the union agenda is also hostile to workers.
By contrast, the availability of temporary replacement workers reduces unnecessary business costs, such as work stoppages. This encourages business investment and in turn lifts wages. Investors need to be reassured that while a union might cost them money and inconvenience them, they can’t close them down entirely with a strike. A Fraser Institute report last year found that bans on scabs discourage entrepreneurship, business expansion, the reinvestment of profits, and the relocation of businesses to jurisdictions with these bans.
A major academic study published in 2004, noted the Fraser authors, examined the impact of bans on scabs in Canada over a span of more than three decades and concluded that the bans cut net investment by 25 per cent. Other more recent studies have found that by discouraging business investment, bans on scabs resulted in lower wages for workers.
For example, a C.D. Howe Institute study in 2010 found that banning scabs reduced average hourly wages by 3.6 per cent, and a study in the journal Industrial Relations in 2014 found the bans cut average annual wage settlements by 1.8 per cent. The findings of the empirical literature, the Fraser authors concluded, is that by reducing business investment, “banning temporary replacement workers lowers union wages.” If they succeed with their lobbying for bans on scabs, union leaders will only sabotage their own members in the long run.
It’s a myth that workers need unions to protect them. All they need — and the only thing that offers real worker protection — is competition among employers. Just as businesses must compete for customers by lowering prices and improving the quality of goods and services, they will normally have to compete for workers by bidding up wages and improving work conditions, provided they aren’t offered protection from competition by government intervention. When unions make it harder for businesses to hire temporary workers during lockouts and strikes, they’re not helping. They’re just making everyone, including unionized workers, poorer.
Matthew Lau is a Toronto writer.
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