Workers, unions must fight for a piece of the pie

Even central bankers are now realizing the perils of stagnant wages.

Bankers aren’t normally on the workers’ side. Indeed, 30 years of supporting and, in many cases advocating for the conditions that have contributed to an attack on wages and workers is a history bankers can’t merely rewrite just because some of them have seen the light.

Statistics Canada recently reported the lowest growth in wages since it began collecting annual data in 1997.

Private bank economists have joined the bandwagon, saying weak wage growth is worrisome.

But while bankers bemoan “soft wage data,” in the real world workers can tell you exactly why wages are stuck. Too much of the gross domestic product — the economic pie — continues to be hoarded by the rich and corporations, creating unprecedented inequality. And workers have had less power to demand a share of that pie.

It is this inequality and its impact on economic growth that has finally pushed central bankers to re-examine their book of conventional economic “wisdom.”

To solve the issue of stagnant wages, government must fix the rules, including by empowering unions that can make a difference on the wage front. After 30 years of attacking them, governments should let unions do what they do best — raise people up, improve living and working conditions and share the pie.

Unions don’t just bargain better wages, they negotiate better jobs.

It’s no fluke that the decline and stagnation of wages has gone hand in hand with government policies and laws making it tougher for workers to unionize and making it easier for employers to avoid or bust unions. Contract flipping, outsourcing, suppressed minimum wages, tough unionization rules, the growth in precarious and contract work, and laws freezing wages in the public sector have all had an impact on Canada’s pathetic wage picture.

No doubt the federal government is attempting to mitigate some of this damage by restoring fair labour relations in the federal sector, including undoing some of the more egregious anti-union laws introduced by the Harper government, but more is needed.

Provincial governments must take a long, serious look at their laws governing labour relations and employment standards, as Ontario and Alberta have just done.

In Britain, Bank of England chief economist Andy Haldrane recently noted that the relationship between pay and employment is closer to the pre-industrial age, the days before unions and collective bargaining. He called out the gig economy and declining unionization as culprits in slow, low and no-wage growth.

He told The Guardian newspaper that a period of “divide and conquer” had left workers less able to bargain for higher wages.

“There is power in numbers. A workforce that is more easily divided than in the past may find itself more easily conquered,” he said. “In other words, a world of divisible work may reduce workers’ wage-bargaining power.”

Central bankers might also note that de-unionization didn’t just happen. It was a deliberate policy by governments who bought into the so-called “neoliberal agenda,” caving to the demands of global capital.

Unions, by their very nature, share the wealth. And if you’re wealthy, it isn’t in your best interest to share.

Australia’s top central banker is also sounding the alarm.

Philip Lowe, head of the Reserve Bank, said it’s time for workers to rise up and demand pay increases. This would be easier to do if they had unions. But as in Canada, the United States and Great Britain, unions have been under attack in Australia and it’s been tougher for unions to raise conditions for everyone, including non-union workers.

The effect on wages that we see today across many industrialized countries is a result of 30 years of bad policies, but it need not take three decades to fix them. Aggressive laws that find the balance between workers and corporate power can make a difference.

In Australia, the trade union movement has launched a bold campaign aimed at changing the rules.

As mentioned, Ontario and Alberta are taking a lead role in Canada in modernizing the laws that govern the world of work.

Newfoundland and Labrador has some pretty outdated and draconian labour laws. It’s long past time for the government to fix those laws and rebalance the scales. It can start with the rules that allow global corporations to retender and flip contracts in order to bust unions, and by modernizing labour standards legislation written for a time when the gig economy hadn’t been invented.

It can start by realizing that the important role of unions in the economy needs to be reemphasized.

In short, unions are vital if we’re to share the economic pie.

It’s no fluke that the decline and stagnation of wages has gone hand in hand with government policies and laws making it tougher for workers to unionize and making it easier for employers to avoid or bust unions.