The dangerous allure of concession bargaining


IT'S ALMOST A LAW OF NATURE: WORKERS ARE ALWAYS EXPECTED TO "TAKE ONE FOR THE TEAM."  When the economy, or a sector of it, takes a dive, unionized workers are expected to ease the business pain with wage and benefits cuts—with “concessions.” COVID-19 has given employers a fresh excuse to demand concessions. We’re all in this together, right?

Well, not really. When the economy is thriving, and profits are soaring, that togetherness seems to vanish like morning mist. Unions have to bargain just as hard for every nickel and dime as they always have.

Concessions always on the table

Indeed, concessions are demanded in both fair weather and foul: remember the profitable Caterpillar Electro-Motive plant in Windsor and its insistence upon 50% wage cuts? And how it left Canada in 2012 to set up shop in Indiana, a right-to-work state, when the Canadian workers said no to concessions? (What union in its right mind could have agreed to an ultimatum like that?)

But in hard times, some workers (and unions) see more merit in concession demands. Mostly it’s about employment, and the (obviously real) fear that jobs will be lost when the private sector is in trouble. By taking wage cuts and poorer pension plans, and agreeing to reduced benefits, so the reasoning goes, workers will at least avoid the unemployment rolls.

The problem is, that’s a myth. Concessions can’t fix a tanked market. In the short term, in a very few cases, jobs may be saved, especially if the union bargains a no-layoff agreement in exchange, but in far too many others, the jobs will disappear anyway

Concessions lead to more concessions

Take the current crisis in the aviation industry, for example. Covid-19 was not the first major blow it has suffered in recent years: the major 2008 recession sparked demands for concessions, which were granted, but that didn’t stop mass layoffs, nor did employers become generous at the bargaining table after building their way back to profitability.

Now that the industry has taken a brutal hit from the pandemic, concessions are once again on the table, even though the money to be saved would be a tiny fraction of the amount lost to cancelled flights, and have little or no effect on the mass layoffs now occurring.

The larger picture, a dismal one, is this: once concessions are granted, employers smell blood. The demands for more concessions escalates, and competitors are encouraged to extract the same from their own employees. The snowball effect drives down wages and benefits, sometimes to the point that the workers never recover in subsequent contracts what they have lost.

Concessions are forever

Concessions are never temporary. Ford workers discovered this in 2012 when they tried to recoup some of the losses they had accepted in an earlier bargaining round. “There is no catch-up to be had,” said a senior Ford official. “That’s what we have to help our employees understand.”

Concessions affect every worker covered under the collective agreement, and their families. Pension concessions hurt union retirees forever, and two-tier wage agreements discriminate against the younger members of a bargaining unit, pitting worker against worker.  

As long ago as 1985, labour researchers observed that union solidarity and union leadership credibility are weakened as a direct result of concession bargaining. After all, members may well say, why do we need unions to give away what we fought for and won in the past? As Canadian Autoworkers Union (CAW) president Bob White once famously said when he categorically rejected an employer demand for concessions: “You don’t need a union to walk backwards.”

Fight back and win

White went on to lead Canadians out of the United Autoworkers Union to avoid the concessions promoted by the UAW American leaders. The CAW arguments against concessions inspired others: Newfoundland fishers, West Coast industrial workers, railway carmen, and Ontario electrical workers all looked to join the new CAW in order take on employers.

Relatively small bargaining units have won major victories in the face of concession demands. CUPE 2424, for example, represents approximately 850 administrative, technical, library, counselling, and nursing staff at Carleton University in Ottawa. In 2018, the Carleton board of governors tried to remove union bargaining rights over pensions.

That was a major issue for the members. They took to the picket lines for four weeks in the dead of winter, and they won some of the best pension contract language in Canada in their sector.

It’s always worth organizing to fight back and reject concessions. And, realistically, looking at the past and the future, we have no choice not to.


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