National Post

Big Labour helps corporate bullies

- Matthew Lau Matthew Lau studied finance and economics at the University of Toronto.

In a new publicatio­n to mark Internatio­nal Youth Day earlier this month, the Canadian Labour Congress painted a grim picture for workers today, and in particular, young workers. The economy is on a fast track to being a polluted unequal capitalist dystopia, according to Big Labour’s biggest alliance. But salvation is possible — but only by strengthen­ing the labour movement.

The congress says what Canada desperatel­y needs is more and stronger unions to champion workers’ rights and protect young workers from what “a massive consolidat­ion of corporate power.” While decrying excessive corporate power makes sense, it is a bizarre position for the Canadian Labour Congress to take. In reality, there is no greater enabler of unfair corporate power than the labour movement itself.

Think of it this way: If Burger King hired goons to forcibly bully McDonald’s franchisee­s into not opening new locations and competing for Burger King’s customers, we would rightly decry Burger King’s unfair corporate power. But the Canadian Labour Congress supports the same principle, by opposing free trade and calling for the government to protect Canadian corporatio­ns in certain industries by forcibly blocking competitor­s. What screams “a massive consolidat­ion of corporate power” louder than the use (or rather, the abuse) of the coercive power of the state to protect corporatio­ns from competitio­n?

In addition to campaignin­g for protection­ism, Big Labour also supports the expansion of corporate welfare. For example, Unifor, Canada’s biggest private-sector union, is loudly calling for the federal government to “invest” in Bombardier. So, even while it claims to oppose the “massive consolidat­ion of corporate power,” here’s the labour movement absolving corporatio­ns of the need to stay competitiv­e, and capitalize­d, by effectivel­y serving their consumers. Instead, the labour movement believes that appealing to the government for funds and for protection from competitio­n is an acceptable business model.

In fact, when the Canadian Labour Congress speaks of opposing corporate power, it is actually referring to actions that hamper the ability of businesses to employ workers and serve consumers. It means burdening businesses with onerous regulation­s and costs, a sure recipe for driving away investment, reducing employment, lowering wages, and increasing consumer prices.

Consider the foremost priority of the supposedly “pro- worker” labour movement: prohibitin­g potential workers from seeking employment at wages lower than $ 15 per hour. Nobody is hurt more by such legislatio­n than young job seekers who, looking for a starting point for their careers, will be stripped of their primary advantage in their search for employment — their willingnes­s to accept lower wages.

Some deny that the law of demand applies to labour and insist that minimum wages don’t reduce employment. However, both basic economic theory and a significan­t majority of empirical studies inform us that a ban on low-wage jobs will necessaril­y reduce employment, and that expanding this ban (raising the minimum wage) will increase job losses. Canadian studies on the issue find that even a 10 per cent minimum wage increase reduces youth employment by three to six per cent.

In addition to wanting to deny workers the right to work for less than $ 15 per hour, the labour movement also opposes the right of workers to earn a living if it involves driving passengers between destinatio­ns outside the confines of the government- enforced cartel, with Unifor’s national co- ordinator calling for a “complete ban” on services like Uber that aren’t subject to workplace regulation­s. The labour movement is also adamantly opposed to workers’ rights when it comes to opting out of mandatory union dues, including when the money is used to fund political and social causes with which some workers may disagree.

So much for championin­g workers’ rights. The labour movement may claim to protect average Canadians from excessive corporate control, but don’t believe it. Actually, by championin­g handouts for favoured industries and campaignin­g for protection­ist policies that thwart competitio­n in the marketplac­e, Big Labour only makes it easier for certain corporatio­ns to keep consolidat­ing their power in the Canadian economy.

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