Unions Are Ruining Our Economy

Contrary to what passes for “accepted wisdom” these days, labour unions played a large part in building the economy in this country and they aren’t responsible for ruining the economy.

All workers, whether unionized or not, benefited from the gains made by the labour movement.

You can thank labour unions for things like 40 hour work weeks, paid overtime and annual paid vacation leave (or vacation pay in lieu of time off) in addition to many of the regulations written into labour codes across the country. As a result, you can thank labour unions for helping to establish a decent standard of living here in Canada.

Labour unions don’t put companies out of business. Labour unions don’t cause companies to “price themselves out of the marketplace” either. When the percentage of unionized workers was at its peak, back in the fifties and sixties, the economy was booming and experiencing tremendous growth. Those jobs paid good wages and provided good benefits. Much of Canada’s social safety net was put in place at that time, too. Universal health care, old age pensions, the CPP, UI – all of these things date back to the growth economy of the post-war decades when the labour movement was also at its peak.

Labour unions aren’t ruining the economy, but I know who is . . .

Ronald Reagan is still a hero to some. They talk about his economic policies in the hushed tones appropriate to the worship of a saint.

But their hero bears faint resemblance to the polished image that devoted admirers have constructed.

Campaigning (twice!) on a platform of “small government” he presided over the largest increase in the national debt in his country’s history – a record that wasn’t broken until George W. Bush came into office.

In his zeal to cut taxes on the wealthy few percent, he refrained from cutting government spending to match. He made large cuts to various social programs, but he had a soft spot in his heart (some say his head) for military spending. His own budget guru – David Stockman of “supply side” economics fame – quit in disgust at Reagan’s failure to control military spending.

Some claims have been made that Reagan “won” the Cold War by outspending the Soviets, but these claims ignore the fact that the Soviet economy had been faltering for decades and their own ill-advised and expensive invasion of Afghanistan probably had more to do with putting the Soviet economy into a death spiral than Reagan’s military spending. This is an interesting historical tidbit considering George W Bush’s own more recent military adventure in Iraq will ultimately cost American taxpayers almost 3 trillion dollars by some estimates. The American economy will be staggering under this burden for decades, but all this is forgotten in the wake of the economic meltdown which occurred in the last year of Bush’s second term and the ensuing financial bailout.

Since Reagan’s name is frequently invoked when people attack socialism for its redistribution of wealth, it should be noted that his “carte blanche” approach to Pentagon spending represented a huge redistribution of wealth from taxpayers to the corporations in the military-industrial complex. Stories of $500 hammers and $800 toilet seats represent the bloated budgets that various military departments had to work with and also the obscene profits being made by corporations at the taxpayers’ expense.

Thus was Ronald Reagan able to pile up the largest public debt in American history, while remaining a hero to those particular fiscal conservatives who apparently know nothing about history, politics or economics.

The portion of the U.S. workforce which is unionized has been falling steadily since the Reagan years, hardly a coincidence. He implemented a program of eradicating unions and he started with the nation’s air traffic controllers. The aviation system in the U.S. took years to recover from that Reagan policy. His two administrations also removed worker protections (more “streamlining” of the economy) and made it more difficult for unions to organize workers. These were “corporate friendly” moves that did nothing to improve American workers’ freedoms.

Naturally when people look around these days the biggest unions they see are government unions, but there was a time when the biggest unions represented workers in the industrial sectors – manufacturing and mining for example. Those unions have been decimated by the same forces which brought us globalization and lowered trade barriers, shipping manufacturing and processing jobs overseas.

Peggy Noonan, one of Reagan’s speechwriters and now a conservative pundit/ talking head on the networks, wrote a loving hagiography about Reagan’s presidency called “When Character Was King”. Maybe she spent as much time sleeping during his presidency as he did or perhaps she kept her hands over her ears when the Iran-Contra arms scandal was being plotted or when its perpetrators were being prosecuted. The man who famously wouldn’t “negotiate with terrorists” was quite ready to deal when he wanted to secretly fund his illegal proxy war in Nicaragua.

Reagan was a buffoon who, unfortunately, became the most powerful man in the world for eight years.