Back-to-the-future trend in U.S. labour law comes to Canada

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Caught in a punishing recession that just won't end, many Americans must think they've been transported back to the 1930s. Meanwhile, U.S. labour laws are heading even further back in time. Emboldened Republicans in several states are trying to dismantle the last remaining features of New Deal labour law (as codified in the 1935 Wagner Act).

In the public sector, this crusade includes measures (such those in Wisconsin) that in essence ban unions and collective bargaining altogether. In the private sector, the favoured tool is the so-called right-to-work law. Pioneered by southern Dixiecrats who always hated the New Deal, these laws ban the union security and dues collection provisions that constitute the core of North American "majority unionism." Workers make a majority decision (by signing cards or voting in an election) to form a union. The union is required to bargain on behalf of everyone in the bargaining unit. But without the power to collect dues, clearly the union cannot survive. Unions are thus effectively prohibited; indeed, in right-to-work states, private-sector unionism is virtually non-existent.

Fuelled by economic desperation and beggar-thy-neighbour competition for investment, the practice has been creeping north -- reaching Indiana earlier this year. In fact, just a day after Indiana enacted the law, Caterpillar closed its locomotive plant in London, Ont., shifting some production to that state. (Right-to-work wasn't the only lure: huge subsidies and Buy American rules also helped.)

It was inevitable this back-to-the-future trend in U.S. labour law would spill over into Canada. Three provincial political parties have already proposed U.S.-style right-to-work laws for Canada. Alberta's Wildrose Alliance and the Saskatchewan Party led the way. Last week, Ontario's Progressive Conservatives jumped on the bandwagon, with leader Tim Hudak now endorsing right-to-work laws for that province.

For this agenda to be taken on by Conservatives in Canada's industrial heartland is a remarkable (and, for unionists, worrisome) development. This is, after all, the party of Bill Davis, who actively promoted unions as a tool to reduce inequality and enhance the well-being of common folk. In contrast, Mr. Hudak's policy paper blames labour laws (not corporate greed or flawed foreign investment rules) for the debacle in London, implicitly endorsing Caterpillar's position that Canadians must cut their wages in half or face even more job losses.

Mr. Hudak's paper rails against the "forced paycheque contributions" required under the famous Rand Formula. Invented by Supreme Court Justice Ivan Rand in 1946, it's a compromise between the need for stable labour relations and individual objections to union membership. An individual doesn't have to join a union. But they can't free ride on the unions' services, either. If they object to joining the union that represents them, they must pay an equivalent amount (for example, to a charity). The law is democratic (remember, no union exists without majority bargaining unit support) and has stabilized workplace relations (which were far more volatile before Rand). But new-right conservatives, backed by some employers, now yearn for a world without unions altogether. And this is how they plan to achieve it.

But why stop with union dues? Exactly the same logic applies to every other "forced paycheque contribution," such as payroll deductions and income taxes. Yes, those taxes are set by elected governments (just like unions only exist with majority support). But surely individuals should be allowed to "opt out" -- even if they still enjoy the services taxes pay for. Let's make every tax voluntary, and see what happens.

Of course, public services as we know them would collapse entirely. And that is exactly what Tim Hudak and his allies want to happen to unions.

Jim Stanford is an economist with the Canadian Auto Workers union. This article was first published in the Globe and Mail.

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