So-called think-tanks promote own cause

Commentary, Frontier Centre, Workplace, Worth A Look

UNFORTUNATELY, reports conducted by think-tanks such as the Fraser Institute are too often written by unqualified researchers, and they are rarely if ever based on any form of neutral or rigorous peer review process. As a result, they are often riddled with errors, half-truths, and distortions.

Yet these errors, half-truths, and distortions still get picked up by local proxies and reproduced in local newspapers, while work that has been produced by qualified researchers and has been subject to proper review is ignored.

This would appear to be especially true in the case of Peter Holle's article on a Fraser Institute report comparing economic performance across U.S. and Canadian states and provinces, in which he interprets this report as showing Manitoba's relatively weak growth to be attributable to its labour laws.

First, while it may (or may not) be true that labour laws and the level of union presence are correlated with state and provincial economic growth, it is not clear which causes which or even whether there is any causal relation at all. A 2003 World Bank report reviewing the relevant international research, written by two Oxford University economists, concluded that unionization rates per se have "a very weak association, or perhaps no association, with economic performance indicators." It also concluded that collective bargaining coverage is on average related to higher unemployment rates and inflation, but appears to have no impact on productivity growth.

Second, although both the U.S. and Canada have undergone significant economic growth over the past decade, the bottom 50 per cent of families are no better off in either country. Rather, all of the gains have gone to those in the top 50 per cent. Thus, even if weaker labour laws facilitated growth, this growth may not help those who most need it.

Indeed, a number of research studies have found that a low union presence appears to contribute to inequality in income distribution. For example, a 1997 study appearing in the Industrial and Labor Relations Review, a leading peer reviewed journal published out of Cornell University, used a sophisticated econometric analysis to study the reasons for the more rapid growth of male income inequality in the United States compared to Canada in the 1980s. It found that about two-thirds of the difference between the two countries appeared to be attributable to a more rapid decline in the unionization rate in the United States. Third, the ability to form a union free from employer interference is a widely recognized human right. Canadian laws are effective in protecting this right, at least relative to their U.S. counterparts. Indeed, Human Rights Watch, an internationally respected human rights organization, has found the United States to be in violation of this right. Widespread employer intimidation and employee fear, and the implications of this fear and intimidation for the ability to exercise this right have been thoroughly documented. Why would Canadians wish to emulate this?

It seems inconceivable that an advanced democracy would not do everything in its power to ensure that as many workers as possible are able to gain meaningful, independent representation at work. If Peter Holle and his friends at the Fraser Institute are concerned about the way this right is currently structured, wouldn't it be nice if they could propose a constructive alternative, one that encourages rather than undermines it?

At present, fewer than one in five private sector workers in Manitoba is represented by a union, and the environment is unduly antagonistic. So there is lots of room for positive reform. Let's consider such reform, rather than becoming bogged down in the negativism and half-truths of institutes funded by the wealthy and powerful in order to promote the interests of the wealthy and powerful.

John Godard is a professor in the Asper School of Business at the University of Manitoba.

Fraser analyst Jason Clemens responds.. see Fraser study made union-job links