economics

Whether you feel the striking CUPE workers in Toronto are right or not, you have to conclude that the striking workers will lose.  No matter what happens in the end, whether they go back voluntarily, are legislated back to work, or strike until their demands are met, the (wo)man on the front lines loses.  The problem unfortunately is a simple matter of mathematics.

1. Strikes are battles of attrition. Attrition works in two ways.  One you outlast your opponent, two you hurt your opponent more than they hurt you (essentially outlasting them). Let’s say the auto workers go on strike, it is a simple waiting game where the corporation needs to give in to keep making money. It is a business so a strike means no products to sell.  The city on the other hand has no product to sell.  In fact, the city of Toronto saves $300,000 a day in unpaid wages according to the Toronto Star.  Councillor Denzil Minnan-Wong thinks the city has saved about $28 million a week!There are 30,000 workers striking, averaging lets say $18/hr and working 8 hours a day the total saved works out to $4,320,000/day on an hourly basis and that doesn’t even include the benefits.
   
   According the CUPE’s website, the strike pay is only $40/day to a maximum of $200/week.  So each day the average employee looses $104. It doesn’t take long to see that the city which is saving money is not hurt by the strike.  While one could argue that there is lost revenue because of unfulfilled applications, etc, the city doesn’t really loose anything, the public does.

   Now the fun part, on average union members pay 2.45% in union dues.  If the average CUPE salary is $35,000/year that means the average union dues is $857.50. That means the union makes $25.7 million from dues a year. A 10 day strike eliminates every dime made from union dues that year!
   
   Also for union members they get the shaft from both ends.  First they lose almost a thousand dollars a year in dues and then get hosed for $100 a day while on strike.

   In this war of attrition CUPE is going to get it’s ass handed to it.  One thing that could mitigate this however is if the public supported the strike, but they don’t.
   

2. Taxpayers are not behind the strikers. Without public support the union and it’s members are screwed.  If the public felt strongly enough they would pressure their elected representatives to pay the employees more, even if it did mean in increases in taxes. I believe this because I think deep down most people are fair, and Canadians in particular have a strong sense of fair play.The strike, while not hurting the city in any meaningful fashion is wreaking havoc with the lives of ordinary Torontonians many of which would jump at a chance to work for the city even at the current wage with or without the banked sick days.Most people are willing to endure some hardship or inconvenience if they feel it is for the better good, but given the discrepancy between what union workers make and what private sector workers make it is unlikely that the public will ever support the union.In addition, Torontonians already feel overtaxed with the city adding a new licensing tax on vehicles and another land transfer tax.  Throw on the HST and most Torontonians will feel a little stretched.  Toss on a global economic crisis and the union is left with no support.  Their only hope is arbitration.
3. Arbitration is a lose-lose proposition.  I suspect what will happen is the city will petition the government to enact back-to-work legislation. This will in turn require an arbitration which means the union and city will settle half way in between.  This is a lose/lose solution  The union member will never get back the wages they have lost while on strike and the public is a little worse off.  The only winners are the union and the city. The city wins by having saved millions of dollars and the politicians, relying on the short memories of the electorate, will certainly not be penalized for the inconvenience.  The union will win by telling it’s members that it “stood up to the city” or some other bullshit rhetoric and raise union dues six months from now.

So the strike isn’t good for the union members or the public who will ultimately be the ones who pay the price, despite the fact that there is nothing either of these groups can do about it.  The time for unions has passed.  There is enough employment legislation in place that companies cannot gouge workers or force them to work unreasonable amounts. Unions are now a hindrance to progress, and do more damage in respect to workers rights and workers pocketbooks than help.