Kudos To Governor Walker! Will Businesses Follow His Lead to Do What’s Right, Not What’s Expedient?
Many labor relations' activities on the horizon could change the course of businesses and government and hike productivity. Here are two.
Despite major adverse publicity, high profile dissent, and massive demonstrations, to tackle his state’s deficit, the governor of Wisconsin passed a law that gives his state greater control over his workforce and his state’s budget, such as fixing salary increases at no more than inflation.
When the city's labor contract expires in December 2011, Toronto's mayor has vowed to get rid of "jobs for life." In response, the president of the local union said employment security is number one, and he doesn't intent to give up this clause.
I confess, I believe traditional unions operating in the established adversarial manner, handicap North American businesses. That said, I think there are a couple significant lessons we can learn from these union matters.
First, for too long, governments coddled unions and accepted situations that exacerbated bureaucratic environments. Labor conditions in Wisconsin were created by previous governments’ acceding to union demands. Now we have a fiscally responsible government ready to act, even if it isn't popular. Sadly, generally, it seems the press sides with unions and so, creates a greater challenge for management. Even so, it's refreshing to see the governor act in the best interest of his state. Time will tell whether an activist judge will overturn this decision. If that happens, the state will be the loser, as the people will be saddled with growing budget deficits.
Second, when we have ridiculous situations as in Toronto, we shouldn't blame unions because management agreed to those terms. How could a responsible management agree to jobs for life? The simple answer is expediency, short-term thinking. We need to be upfront with unions and tell them that no government or management can guarantee jobs. Only the marketplace provides job security. In North America where productivity is low, we should expect and embrace greater productivity, which could lead to declining employment, in manufacturing and services industries.Continued on the next page