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The Hammer and the Hockey Stick: The Decline of North American Labour Unions

The 113-day labour dispute between the NHL and the NHLPA, the hockey players’ union, came to an end on January 6. The deal arranged by the two sides reflects the strength of both the player’s union and team owners. Compromises were made on both sides, often splitting demands on revenue sharing and contract periods down the middle. While most of the media derides this as millionaires fighting billionaires, it is overall an interesting aberration in labour relations.

In North America today, this kind of employee success in a labour dispute – at least within the private sector – is unheard of. Eight months before the beginning of the NHL dispute, following a labour dispute between Caterpillar and workers at a London, Ontario plant in which Caterpillar demanded exceptionally harsh concessions, a lockout ensued, followed by a unilateral and sudden closure of the plant, with hundreds of job losses.

In the last 30 years, organised labour in North America has seen a precipitous decline. From 1984 to 2010, unionised labour in the United States, mostly united under the banner of the AFL-CIO, has dropped from 20.1% of the workforce to 11.8%. This is an even more intense drop than what appears for the private sector; while 37% of public-sector workers are unionized, less than 7% of private sector workers are. In Canada, while the statistical drop has been less severe due to more rigid labour laws, the situation otherwise resembles the United States. Many unionised industrial jobs have either been outsourced, or workers have had to make huge concessions on wages, benefits, pensions and job security, with little clear return.

Since the advent of modern economic globalization, along with broad economic liberalization, freer trade enforced by the GATT and WTO, and the end of the Cold War, money has many more places to go. Owners of capital, both corporate and private, now can scour the world looking for the best returns on their investment, places with the cheapest labour and biggest tax incentives. Industrial labour, on the other hand, is firmly rooted in one place; workers in Detroit cannot move to find another job as easily as General Motors can move production to another state or another country. Unions, in trying to recover their influence, have often railed against free trade deals like NAFTA, seeking to protect their jobs.

Mechanisation has also had an effect on unionised labour. Because the overall demand for labour has fallen as machines replace workers, there are now many fewer jobs for the same number of workers. This has been especially hard on lower-skilled workers in many industrial jobs, who have faced competition both from other countries and robots. These two factors have driven down the cost of labour. The lower cost of labour has hurt unions, which are a means of increasing the price of labour through the bargaining power of the collective. With both the effects of globalisation and mechanisation, an imbalance between labour and capital makes it easier for companies to strong-arm industrial unions into giving into concessions, with the threat of shutting down factories altogether as the proposed alternative. Many unionised plants, while retaining their unions, have been forced to accept an end to guaranteed-benefit pensions, dire pay cuts, and a slashing of health benefits.

Another factor has been politics. Globalisation has encouraged politicians to weaken unions, such as through “right-to-work” laws, and the provision of financial incentives in order to attract capital. Additionally, right-wing politicians in traditionally heavily unionised regions such as the industrial Midwestern “Rust Belt” have pushed against organised labour for political and ideological reasons. Labour unions are a stronghold of the Left, and are seen as an illegitimate infringement on a worker’s right to work where and when they want. An increasingly hostile public has often encouraged this process. Suffering in a harsher economic climate, they have turned firmly against unions, especially those that they see as overly privileged, such as automotive and public sector workers.

Finally, the failure of the service sector to unionise is problematic for organised labour. Most service sector employment is more resistant to outsourcing and mechanisation; a garage or restaurant simply cannot move to China, and we do not (yet) have robot mechanics or waiters. Yet, because of the unskilled, low-wage, often temporary nature and socially marginalized labour force of the service sector, unionisation has proved difficult. This means that the mostly-industrial AFL-CIO lacks other private sector allies, and cannot depend on association with unpopular public sector unions. For all of these reasons, while the players of the NHL have a spiffy new contract up until 2020, the rest of North America’s labour unions will continue to struggle.

– Alex Langer

(Featured photo: AttributionNoncommercialNo Derivative Works Big Swede Guy. Creative Commons, Flickr)

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