Op-ed – Have public unions failed the public?

November 12, 2011

The Daily Gleaner, Canada East

September 5, 2011

The term “labour movement” refers to the campaign by workers usually organized in unions who are “fighting” for better employment conditions from employers. The movement uses the leverage of strikes and other work campaigns to force governments and employees to give workers their “rights.”

Public-sector union members protest cuts by the provincial government outside the legislature in 2009. The number, and benefits, of public sector workers have promoted calls to reduce the size of government.

At one time, workers in North America required collectivist action to be fairly treated and properly compensated for their labour. Most government have now enshrined into labour laws the working conditions that unions originally protested for – such things as minimum wages; restrictions on child labour; working hours; and injured worker compensation. We have the unions to thank for this protection.

In this century, however, the labour movement has morphed into a protection group focused on extracting more money from taxpayers. Most unions in Canada are public sector employee groups.

Canada has some of the most restrictive laws in the world to protect unions, and also the highest levels of union participation in government. Currently in Canada, 71 per cent of the public sector is unionized but only 16 per cent of the private sector. In the U.S., the numbers are 36 per cent and 8 per cent, respectively.

Public sector unions have created an environment where any suggestion of reforming their entitlements has become a third rail for politicians – the third rail being the high voltage cable running beside an electric train; touch it and you are instantly killed. For politicians the topic is political death. Politicians have decided that rather than fight the unions on wages, pensions and other entitlements, they will simply jump on the bandwagon of taxpayer funded goodies and extract the same benefits for themselves. These include early retirement, big wages, great benefits and platinum-plated pensions.

Mark Steyn, in his new satirical book, ‘After America: Get Ready for Armageddon’, made clear that this unholy venture between politicians and our employees has created the most powerful political party of all, the “government party”. The power of union votes ensures that politicians must listen to them if they want to be elected. Of course, this means promising them security for their ever increasing wages, golden benefits and outlandish pensions.

In Canada, no information is available on how unions spend their money or how much they collect in union dues. In the U.S., unions are required to fully disclose this information to the Department of Labor on an annual basis. In Canada, it is all hush hush.

The amount of money raised and spent by public sector unions is astounding. One union, for example – the Canadian Union of Public Employees (CUPE) – charges each of its 600,000 members a total of $800 per year. This would amount to $480 million. Considering that there are 3.6 million public sector employees in Canada, the dollars become pretty staggering.

The political influence and money available to public sector unions means that they have become Canada’s protected class. Or, as one commentator puts it, the public servants have become the masters.

Every year, Statscan produces a report called Unionization. It tracks the success that unions have had in the previous year. There are 4.2 million unionized workers in Canada, and a majority of them come from the 3.6 million public sector employees. Union workers earn 15 per cent more in wages, and this does not include benefits or pensions. In the last report, unions saw an average wage increase of 3.5 per cent versus 2.7 per cent for non-unionized workers.

The biggest success that unions can point to for their members is in pensions. Today, the public sector has 82 per cent of its workers with defined benefit pensions, compared to the private sector with only 15.7 per cent.

Pensions have been a wealth transfer from taxpayers into the pension accounts of public sector employees. Today in Canada, the public sector unions have accumulated $800 billion in assets, while private sector pensions have $350 billion and the total retirement savings for Canadian in RRSPs is $750 billion. The average Canadian at age 65 has $60,000 in RRSPs, while Montreal released its pension numbers showing that the average police officer retires at age 53 with a pension for life starting at $59,000, which is, of course, indexed. In the Montreal example, the employees will earn twice as much in pensions as they received in salaries over their working careers.

Changes need to be made in the way that unions operate in Canada.

In hindsight, unions should never have been allowed in the public service. U.S. President Franklin D Roosevelt was a strong supporter for labour rights during the 1930s; however, he predicted the folly of permitting unions into government workplaces. He wrote, “Meticulous attention should be paid to the special relations and obligations of public servants to the public itself and to the government . . . The process of collective bargaining, as usually understood, cannot be transplanted into the public service . . . a strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable.”

It is time to rethink unions and their place in our modern society.

We have seen many Western countries brought to their knees under the weight of public sector union demands. Let’s act before it is too late.

Bill Tufts and Lee Fairbanks are the authors of a book being released by John Wiley and Sons next month, called Pension Ponzi, How Public Sector Unions are Bankrupting Canada’s Health Care, Education and Your Retirement.




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