Organized workers feeling the heat

At the foot of the Don Valley Parkway are haggard symbols of the risk workers take when striking in hard times.

Employees of the old Lever Brothers soap factory have been walking the picket line for a year. In February, American owner Korex Don Valley filed for bankruptcy protection. Last month, all 100 strikers received layoff notices.

"We, as the normal common guy, didn't see it coming," David Pal, 48, says of the recession. "We were out in June (2008) and in July we started realizing, holy cow, the economy seems to be in trouble."

And yet, sitting under a makeshift tent at the plant's gate, Pal and a handful of other strikers say they have no regrets.

They accepted a long list of concessions in their last contract seven years ago, including a wage freeze – their average salary is $25 an hour – and the loss of their defined-benefit pensions. Last year Korex demanded much more.

"I'm not going to work in a sweatshop," says Pal, a member of the Communications, Energy and Paperworkers union. "After 30 years of service, some things are worth fighting for."

Not so far away, on Commissioners St., municipal garbage workers feel the same way. They hit the pavement this week with other city employees to fight concession demands, including their decades-old right to bank unused sick days and cash in some of them at retirement.

"They're using the recession as an opportunity to stick it to us," says garbage worker Bill Steele, 44.

Also sticking it to them is the public. Says Steele: "They're jumping on the bandwagon: `Hey, let's beat these guys down.'"

Moments earlier, a woman in a hurry to dump her garbage at the Commissioners St. site – one of several where residents can do so – spit at picketer Tommy Bazkur, 55.

Union jobs have long been seen as the standard-bearers for decent working conditions. But these days, unionized workers are feeling the heat from employers and the public.

With corporate profits down 24 per cent in the first quarter – about the same amount they fell in the last quarter of 2008 – the pressure on employees for concessions is mounting.

Across the private sector, defined-benefit pensions – enjoyed by only 17 per cent of these workers – are under serious threat and proposals to cut wages are making an appearance.

Sharp cuts in benefits to save GM and Chrysler are the most obvious example. In the struggling newspaper industry, The Globe and Mail wants employees to take an unpaid one-week vacation each year and switch to a less secure defined-contribution pension.

The most extreme example comes from abroad: U.K.-based British Airways, which recently reported a pre-tax loss of $760 million, has asked its employees to work one month for free.

Companies struggling to survive make tough choices, sometimes in agreement with unions. But the concessions they demand set the tone for profitable companies too, argues Norene Pupo, director of York University's Centre for Research on Work and Society.

Says Sid Ryan, Ontario president of CUPE, which represents striking city employees: "There's a real trend to pull everybody down to the lowest common denominator. And that's why you'll see long strikes."

Niels Veldhuis, director of the Fraser Institute's Centre for Labour Market Studies, disputes the claim. Expanding companies can't afford to be stingy if they want to attract the most talented people, he says.

Twenty-one unionized workplaces under provincial jurisdiction are currently on strike in Ontario – one less than in June last year, and six less than in June 2007.

In contract agreements between Ontario unions and employees in the private sector from 2007 to April 2009 average annual increases fell from 2.9 per cent to 2 per cent. In public-sector contracts negotiated during this period, wage increases fell from 3.1 per cent to 2.5 per cent.

Unions are facing their own survival challenges. Unionized manufacturing jobs across Canada disappeared at twice the rate of non-unionized ones from 1998 to 2008, according to Statistics Canada. During the past year in Ontario, 53 per cent of the 133,000 manufacturing jobs lost were unionized.

Voy Stelmaszynski, a lawyer with the Ontario Labour Relations Board, has noticed an increase in applications to decertify unions. Most are due to workplaces switching from one union to another, he says.

As the number of manufacturing jobs drop, unions are scrambling to maintain revenues from union dues, Stelmaszynski says. The result is an increase in rival unions "raiding" already unionized workplaces.

"They really are in a struggle for membership," he says.

The bottom for both unions and working conditions depends on the length of the recession, says York University's Craig Heron, a historian of the Canadian labour movement.

"You find much more strength and leverage for unions during boom times and a much weaker ability to negotiate during down times."

With unemployment rising – it hit 9.4 per cent in Ontario in May, the highest in 15 years – employers have a bigger pool of labour to choose from. During the Great Depression, workers who resisted wage cuts were replaced by the many waiting at factory gates for jobs, Heron notes.

The heyday for unions began in the early 1940s, when massive cross-country strikes and the rise of the pro-union CCF party pushed the federal Liberals to pass laws that allowed unions to be recognized.

What followed was an unprecedented period of prosperity and near full employment. Wages and benefits rose steadily, as did union membership. This ended in the 1970s, with wage and price controls and, later, company downsizing.

Along the way, unions set labour standards for most workers. Their gains pushed federal and provincial governments to set labour laws that guaranteed, for example, paid vacations and severance. For years in Hamilton, when the unionized Stelco steel mill struck a deal, its non-unionized competitor, Dofasco, automatically matched it.

"The quality of life that everybody enjoys today is thanks to the labour movement," says Pal, the striking factory worker. "And then people turn their backs on it like it never happened."

The Fraser Institute's Veldhuis argues that improved working conditions have nothing to do with unions. The key is job creation, which he expects will robustly return once we're out of the recession.

The scramble for workers will then intensify as Canadian baby boomers retire, he says.

"There is going to be pressure for workers on all sorts of labour categories, and that obviously means that employers are going to have to do more to attract talent, both in the public and private sectors.

"That is good for workers because it means higher wages, it means better conditions, it means they can demand more. That's what we were seeing before the recession hit."

For now, however, the lack of overt public support for picketing workers is indeed striking when compared to countries like France. Hundreds of thousands there regularly take to the streets to fight proposed labour concessions, creating the impression of a highly unionized country. In fact, only 8 per cent of the French labour force is unionized, compared to 30 per cent in Canada. (If workers in the agricultural sector are counted, the number drops to 25 per cent.)

Canadians are victims of "a politics of envy," promoted all the more during the recession, says sociologist Pat Armstrong.

"People say, `Why should those workers get it if I don't have it,' as opposed to flipping it around and saying, `Why shouldn't we all get it,'" she says.

Canadians should be careful what they wish for, particularly if wages start falling, says Sylvain Schetagne, senior economist at the Canadian Labour Congress.

"People will consume less and you might end up losing your job."

Some argue more focus should be placed on fixing the social safety net – such as boosting employment insurance coverage and the Canada Pension Plan – and reforming economic practices.

Roger Martin, dean of the Rotman School of Business, calls for changes in executive pay structures. He blames much of the economic collapse on the way Wall Street uses stocks to pay the lion's share of CEO salaries. That created a kind of financial Russian roulette, with hedge fund managers and others repeatedly betting on the riskiest investments until they all came tumbling down.

Pupo criticizes what she calls "corporate welfare" – executives getting huge bonuses while workers get cuts. At Nortel, which is under bankruptcy protection, severance pay was cancelled and pension benefits slashed while executives received millions of dollars in bonuses.

Yet even among unionized workers envy makes an appearance. Strikers at Korex can't help but feel their striking cousins in the garbage sector have got it easy.

"Once the garbage starts smelling, after three weeks, it's going to be settled," says David Pal.

"It's just like a little summer vacation for them without pay," adds fellow striker Ron Gaudet, 58.

At the Commissioner St. picket line, garbage workers complain the city wants to take from them what it didn't try to take from police or fire fighters. Jay Gibbs, 37, says people wouldn't envy his sick day plan if they knew what it was like to "slug" 15 to 20 tonnes of garbage a day, four days a week, from 7 a.m. to 5 p.m.

"At the end of the day, I'm absolutely exhausted," says Gibbs, a driver and garbage loader for three years. "These older guys, they're hurting."

Bazkur, who makes $25 an hour, works at a site also used by private garbage collectors. "They get $18 an hour and in a couple of years their knees are gone," he says. "They run them into the ground. Is that what people want to see?"