For all my liberal leanings, I have absolutely no patience for labour unions. Leading up to the late-20th century, unions undoubtedly advanced health, labour, and safety standards in the workplace. But now, after more than a decade into the 21st century, unions are more concerned with protecting incompetence and demanding higher wages and benefits than they are with advocating for fairness and safety in the workplace for employees. Trying to performance manage (aka discipline), let alone, fire an incompetent union employee is a huge undertaking which begins a long, drawn out process that wastes everyone’s time and money. It only gets worse when accusations of unfair labour practices and wrongful termination start getting thrown around. If you’re consistently terrible at your job, you’re fired. And, honestly, if it takes months upon months of back-and-forth arguments and counter-arguments to negotiate a collective bargaining agreement, perhaps it’s time to rethink unions altogether.
The power unions used to have over companies has largely evaporated. Governments have legislated workplace protections and, in this day and age, consumers demand immediate gratification and are quick to switch to an alternative product or service to meet their needs (goodbye brand loyalty). Really, a union workers’ strike draws the ire of consumers and inflicts damage to the company’s brand image which could very well lead to future layoffs depending on the ready availability and comparability of market substitutes. And, if the work stoppage goes on for an extended period of time or the company can’t recover enough to generate sufficient revenue, it won’t be long before there aren’t any jobs to be had nevermind wages to squabble over. So, ultimately, the only thing union workers gain by striking is the the opportunity to update their resumes and look for new jobs in a slow economy.
Take, for instance, the latest worker strikes by employees of Canada Post and Air Canada. Both companies face high fuel costs, ballooning pension liabilities, and reduced demand for its services therefore less revenue (Canada Post has seen a 17% reduction in lettermail volume in the past 5 years whereas airlines saw a decrease in passenger traffic due to the global recession). The demands of the unions center around guaranteed wage increases and unsustainable defined benefit pension plans (DBPP) for both current and future employees. The response of the companies have been smaller guaranteed wage increases, starting wage rollbacks for new employees (Canada Post only), and a move to defined contribution pension plans (DCPP) for future employees (current employees can keep their DBPPs). As an aside, the difference between the two plans: a DBPP is a guaranteed future monthly payout (indexed for inflation), funded and managed by the company, and the DCPP is a guaranteed current contribution to an investment fund (subject to market fluctuations), funded by the company but managed by the employee. The key piece is that the company contributes money it has today under a DCPP rather than having to guess how much money it will have to spend in the future to meet its DBPP commitments. Anyway, back to this example.
Canada Post and Air Canada have both made concessions but have said they won’t be able to afford to continue to pay defined benefit pensions or support the demanded wage increases in an unsure marketplace. These are fair and valid points considering we don’t live in a nanny state and capitalism is what drives the world’s markets. The union’s response: sorry, not good enough, everybody strike. Consumers by and large appear to side with the companies and are willing to wait for their mail or change their air travel provider to one with customer service agents. I’m one of those on the side of the companies and I’d even go one step further: fire all of the unionized employees and then offer to rehire them with the caveat that they all come back as non-union employees under the new wage structures and benefit plans. Some may view this as harsh but it’s what’s needed to continue to run businesses that actively employ people. Don’t like it? Fine, don’t work there.