lundi 25 juillet 2016

Soak the Young (Faisons payer les jeunes)

Publié dans TheGazette, le 25 juillet 2016.

The labour dispute at Canada Post offers a telling example of how boomers are shifting the burden of their financial woes to the young. 

In the current round of bargaining with the Canadian Union of Postal Workers, Canada Post Corporation (CPC) is proposing that future postal workers ‑ those to be hired from day one of the next collective bargaining agreement ‑ get an inferior, defined contribution pension plan, whereas current workers would keep their defined benefit plan. 

As usual, management is asking for concessions while the union is trying to make some gains. This is normal. What is striking is that compensation rollbacks, should they occur, would be borne not by all CPC workers, but primarily by new hires. 

You might think, if concessions have to be made, their cost should be borne by the existing workforce. If compensation for posties is greater than what is observed in the job market for positions requiring comparable skills, you might think that current employees, who actually benefit from this premium, might legitimately also be those called upon to shoulder the burden of adjusting to market realities. You might think that a new hire, typically a young man or woman in their twenties or thirties, with a fresh mortgage or a burgeoning family, might need the money more than a fifty-something empty-nester with a paid-off mortgage. Not so. Nowadays, according to some twisted interpretation of intergenerational solidarity, it appears that it is the young, not the old, who are asked to bear the brunt. 

Humans and animals are biologically programmed to protect their young ‑ the future of the species ‑ before saving their elders. But in our ageing society, elders are offloading to the young the burden of adjusting to market conditions. In the context of collective bargaining, this practice has been termed “orphan clause”, because younger workers cannot rely on the protection of their elder colleagues. 

Orphan clauses establish two tiers of workers, performing the same work, with the same skill sets, at the same levels of experience. But the bottom tier, usually Millennials, get less wages or benefits than the top tier only because they were hired after, rather than before the moment the orphan clause was established.
Do you believe in equal pay for equal work? Labour standards, as well as the Charter of rights, already prohibit wage discrimination based on gender, race and age. What about date of hire? Barring the unlikely event that new hires are not generally younger than the existing workforce, discrimination according to date of hire is a systemic form of discrimination based on age.

How do orphan clauses occur? 
In collective bargaining, management and unions each defend the interests of their constituency: shareholders and workers. Future hires are outside union membership during bargaining, and so cannot be heard at the bargaining table. Some employers look for expedient ways to cut costs, irrespective of ethics. They push for two-tier systems, in wages or benefits, understanding this is the line of least resistance by unions. 

Usually, unions initially resist such proposals. But at the end of the day, they often prefer to sacrifice new hires than give ground on something that impacts their existing base. 

The labour code is a device designed to balance the strengths of management and unions, and thereby achieve fairly bargained outcomes. The device fails when both parties agree to shift the burden of cost cutting to a third party ‑ future hires – that is absent from the bargaining table. Legislative action is therefore warranted to correct this failure.  

Orphan clauses on wages are already prohibited in Quebec’s labour standards law. CPC could argue that federal law contains no such provision, neither for wages nor benefits. It could also argue that orphan clauses are not new. Still, the Government of Canada has a fiduciary duty to younger workers unable to fend for themselves within the framework of collective bargaining, as established by federal law. CPC reports to Public Services Minister Judy Foote. Pursuant to its fiduciary duty, the government could instruct CPC to pursue cost-cutting by other means than by shifting its burden to youth. 

Politicians of all stripes love to speak of their commitment to youth, hand on heart. But talk is cheap. If the Trudeau Government allows its largest Crown Corporation to balance its books by soaking the young, Millennials might take note.