Labour's War on the Liberals: The unintended consequences may be a win for the workers even as the unions lose

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Appeared in the Vancouver Sun, 13 April 2005
British Columbians are only weeks away from a provincial election and the signs of a heated battle loom large.

Jim Sinclair, head of the B.C. Federation of Labour, has made it clear that his organization intends to do everything it can to defeat the incumbent Liberals and replace them with the New Democrats.

The B.C. Fed is joined in this endeavour by an alliance of most of British Columbia’s big public sector unions, including the B.C. Teachers’ Federation, the Hospital Employees’ Union, the B.C. Government Employees’ Union, and the B.C. Nurses’ Union.

The battle lines are clear: Liberals versus unions. However, the most interesting aspect of this rather fierce conflict may be the unintended consequences of an all-out battle between labour and the governing Liberals.

These unions, and in particular the B.C. Fed, are mounting a full-scale political attack against the Liberals. The Fed has hired political coordinators across the province to help organize and motivate rank-and-file union members.

Some of the unions have sponsored television and newspaper advertisements critical of the government. Many have established funds to finance additional advertising, grassroots campaigns and general organizational activities.

It seems clear that the unions are willing to put all their chips on the table in the hopes of defeating the Liberals. This dynamic creates the potential for union leaders to face unintended negative consequences, while average workers could reap unintended benefits.

If the Liberals are re-elected -- which is not at all a given -- and it is clear that union leadership and a substantial portion of its membership forms no part of their constituency, it may well provide the Liberals with an impetus to genuinely reform the province’s labour laws.

That impetus would come from the realization that the Liberals have almost nothing to gain by placating the demands of union leaders. They may further recognize that introducing flexible and balanced labour laws would result in a better functioning labour market for B.C. workers, one characterized by higher rates of job creation, lower unemployment, and higher wages. Finally, they may also realize that, by introducing measures of flexibility into the province’s labour laws, they will indirectly weaken the powers afforded union leaders.

Contrary to the posturing of many union leaders, B.C. still maintains relatively rigid and biased labour laws. A recent evaluation of provincial and state labour relations laws found that B.C. ranked 57th out of the 60 jurisdictions in terms of flexibility and balance.

Some changes that would improve flexibility and balance include allowing workers a choice as to whether to join and financially support a union; removing the ability of unions to impede investments in new machinery, equipment and technologies; allowing the renegotiation of collective agreements when companies are sold, and permitting the use of replacement workers during strikes.

According to a large and growing body of scholarly research, flexible labour markets out-perform regulated ones in terms of incomes, job creation, unemployment, and investment. The best-known research is the OECD’s Jobs Study, which concluded that jurisdictions with flexible labour markets enjoyed better job creation and faster growing economies.

There are numerous studies that have since buttressed the findings of the OECD. For example, a study that appeared in the Southern Economic Journal in 2004 found that flexible labour markets increased the income and amount of investment per worker while decreasing unemployment. Similarly, a pair of studies in the prestigious Quarterly Journal of Economics concluded that less regulated and more balanced labour legislation resulted in better labour market outcomes such as lower unemployment.

There is no doubt that the coming provincial election will be a heated and charged contest pitting the Liberals against both the NDP and the province’s unions.

There is a chance, however, that the most important outcome of this contest may be unintended.

That is, B.C. workers may benefit from potential changes to the province’s rigid and prescriptive labour laws if the Liberals are returned to power.

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