Gulf between business and labour narrows

TheStar.com – Opinion/Editorial Opinion
Published On Wed Oct 06 2010.   By Carol Goar,, Editorial Board

Labour leaders have long predicted that business would one day be on their side.

People scoffed, at first. What could induce the captains of industry to make common cause with union organizers and their partners in the social justice movement?

No one is laughing now. The longtime adversaries are adopting similar stands on everything from job training to pension reform.

It would be an exaggeration to say they’ve become allies. Their objectives and values remain quite different and their relations are often chilly. But on an increasing number of policy fronts, they are on the same side.

Finance Minister Jim Flaherty’s Sept. 30 decision to cap next year’s increase in employment insurance premiums was a response, in part, to pressure from business and labour. Flaherty insisted he acted purely “to maintain the momentum of Canada’s economic recovery.” Political observers knew better. The governing Conservatives could not impose a job-killing payroll tax over the strenuous objections of both workers and employers.

The minister did not back down completely. But he overrode the panel of experts he set up, announcing a modest increase in premiums (5 cents per $100 earned) as opposed to the large hike (15 cents) proposed by the Canada Employment Insurance Financing Board.

This isn’t the only issue on which the old economic battle lines are softening.

For decades, labour lobbied for more public investment in job training, arguing that well-paying factory jobs were disappearing and older workers who were laid off didn’t have the skills to earn a decent living.

Corporate leaders were cool at first, unconvinced tax dollars should be spent to help workers with obsolete skills acquire new ones and even less sure the public should pay to bring marginalized Canadians into the labour force.

But as the supply of qualified workers dwindled and the first wave of baby boomers retired, they realized they needed as many trained job applicants as Canada could produce.

Immigration used to be a social issue. While demographers urged Ottawa to wake up to the reality that Canada’s workforce was shrinking, social activists appealed to employers to hire newcomers who didn’t fit their conventional image. The face of organized labour changed.

Business held back, preferring the safety of familiarity in its boardrooms and management ranks. But as global competition intensified, corporate leaders — with a few exceptions — realized a steady influx of foreign workers was vital to their success. They wanted access to the talent pools of India and China.

Pension reform, likewise, began as a labour campaign. Business got involved about five years ago, as the manufacturing sector faltered and the economy slowed. As their profits fell, once-mighty companies couldn’t meet their obligations to retirees and current contributors. New firms didn’t want responsibility for managing workplace pensions.

Now the corporate sector is pushing government as hard as labour to get moving on pension reform, so workers will have some degree of assurance about their future.

There are still many issues on which the two sides are light years apart.

Labour wants a more equitable distribution of income. Business leaders aren’t willing to trim their multi-million pay packages.

Union leaders advocate more public investment in workers, city-building and safety nets for people in need. That means higher taxes, which most business leaders oppose.

Even in areas such as jobless insurance, there is more disagreement than agreement. Although business and labour are temporarily united in opposition to higher EI premiums, they remain at odds on the bigger question of whether coverage should be extended to part-time employees and contract workers.

Two forces — a sputtering recovery and a government fixated on cost-cutting — are driving business and labour together right now. But beneath this cyclical convergence, the former combatants are edging toward a shared understanding: Good social policy can be smart economic policy.

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