by Arthur Milner
As I write this, the British Columbia teachers have returned to work, following a strike of several months. Depending on whom you listened to, the union or the government, it sounded like two entirely different events. The main mystery for me is why the government didn’t force the teachers back to work earlier – in time for the normal start of classes in September. Presumably they wanted to teach the teachers a lesson. In any case, it’s clear that both management and union had priorities other than the education of children.
During the strike, I wondered more than I usually do why public servants have the right to strike in the first place. Public sector unions are different from private sector unions. Private sector workers are engaged in an economic battle with owners. They gamble that the company will prefer higher labour costs to lost revenue. But it’s a big gamble: a strike can drive the enterprise out of business or out of town.
No such concern exists for public sector workers. Theirs is a political battle. A public service strike inconveniences the public, and the pressure on government is indirect. Workers will lose wages, but not their jobs.
It’s hard to find agreed-on numbers comparing wages and benefits in the public and private sectors. In a debate hosted last year by the Macdonald-Laurier Institute, Jim Stanford,an economist with the Unifor trade union, argued that governments have “the power to ‘solve’ their labour relations problems by simply dictating a settlement. The potential for misuse of this confluence of fiscal interest and political power is enormous.”1 He acknowledged that “average earnings in the public sector are 5 to 10 per cent higher than economy averages (depending on how they are measured) – but education and credentials are significantly higher too. Comparing similar occupations and credentials, it’s largely a wash. Hence, he said, “Tilting at public sector unions is all about politics, not economics.”
Arguing the other side, Professor Tom Flanagan contrasted private with public sector bargaining. In the public sector, he said,“gains extorted through repeated use of strikes and strike threats may lead to reductions in service,” but the reductions “will not necessarily be in the sector where strikes have driven up compensation.” Thus, “aggressive collective bargaining may well kill someone else’s goose.”2
Flanagan cited a recent study that, after controlling for a dozen variables known to influence earnings, including gender, age, education, experience, province of residence, size of employer and nature of employment, found that public sector employees are paid on average about 10 per cent more than unionized private sector workers with similar qualifications and experience.3 Public sector workers were “much more likely to have a generous pension plan, retire earlier, have greater job security, get longer paid vacations, and take more sick days.”