Fraser study made union-job links

Worth A Look, Workplace, Frontier Centre

JOHN GODARD of the University of Manitoba complained in this space (So called think tanks promote own cause, WFP, September 17, 2003) that our study on labour markets was written by "unqualified researchers" without the advantage of "rigorous peer review." All three authors hold graduate degrees in business (Prof. Godard’s discipline) or economics and have over 10 years experience in public policy with numerous peer-reviewed publications to their credit. The paper was also reviewed by a number of scholars including Prof. Dennis Maki of Simon Fraser University, Dr. Mark Mullins, previously senior vice-president of Midland Walwyn, John Mortimer of Labour Watch, and Dr. Michael Walker of the Fraser Institute.

Godard referred to the Frontier Centre for Public Policy, whose president Peter Holle wrote an original column discussing the study, as a "local proxy" for the Fraser Institute. Godard shows an arrogance towards independent, non-governmental think-tanks that is all too common in the halls of academe. Godard fails to discuss the fact that Holle and the Frontier Centre have disagreed, quite strongly, with studies by the Fraser Institute on a number of occasions, including recent work on aboriginal policy, and have shown no compunction in making such disagreements public. The focus for both organizations has always been the dissemination of honest, independent, thought-provoking research so as to stimulate dialogue among Canadians about how to improve our great country.

The professor’s main criticism — that our paper incorrectly drew conclusions between labour laws and economic performance — ignores the fact our study did not deal with general economic performance at all. Rather, it more narrowly investigated labour market performance, defined to include job creation, unemployment rates, length of unemployment and worker productivity, across all 10 provinces and 50 states based on government-provided statistics.

Extended findings

Godard also misused an important World Bank study on collective bargaining to provide evidence against our (phantom) conclusion of the link between labour laws and economic performance. He incorrectly extended the findings of the World Bank study to cover not just collective bargaining but all aspects of labour laws including such issues as mandatory arbitration, third-party picketing, and the use of replacement workers. Ironically, our study actually quoted the very same World Bank study with respect to the economic effects of unionization. The World Bank study found that profits, investment rates (physical capital), and spending on research and development tended to be lower in unionized firms than they are in non-unionized firms. Is Godard claiming that Manitoba’s comparatively low rate of capital investment has nothing to do with its high rate of unionization?

Godard also completely misrepresents one of our study’s conclusions. He infers that the study advocated eliminating the right of

collective representation (unionization). In fact, the study suggested that provinces eliminate closed shop unionism by providing workers the choice as to whether or not to join and financially support a union. If unions benefit average workers, then why are unions and their boosters so afraid of offering workers a choice? The reason is that when workers are given a choice, they join and support unions to a much lesser extent. Our study does, however investigate links between unionization and labour market performance. The study concluded that jurisdictions with the highest unionization rates maintained much higher unemployment rates, longer periods of unemployment, and much lower per worker productivity than those with the lowest unionization rates. These results corroborate a large and growing body of scholarly work (most of which are referenced in our study) indicating that high unionization rates have negative economic consequences.

The Fraser Institute’s study is the first to comprehensively measure labour market performance and the policies affecting such performance. Our over-arching goal was to open up the debate on policies that can improve Canadian labour markets. It is unfortunate that an academic like Prof. Godard resorted to ad hominems rather than pursuing an honest dialogue supported by research. As author Addison Whithecomb once stated, "When you resort to attacking the messenger and not the message, you have lost the debate."