Workplace Wire

Connecting employers to developments in labour, employment & pension law

Labour Law as protection for vested interests against “social equality”


The Economist recently ran an article in which it advocated three policy priorities that are intended to advance the cause of social equality:

  1. A “Rooseveltian” [Teddy, that is] attack on monopolies and vested interests.   Included in the Economist’s list of targets are: “school reform” and introducing choice in education; and getting rid of distortions, such as “labour laws in Europe”.
  2. Targeting government spending on the poor and the young, especially “the welfare states of the rich world”, with a re-focus of resources into education for the young and retraining for the jobless.
  3. Tax reform, especially eliminating deductions that particularly benefit the wealthy; narrowing the gap between tax rates on wages and capital income; and relying more on efficient taxes that are paid disproportionately by the rich, such as some property taxes.

What is interesting about the article is that labour law in its traditional form is seen as protecting “monopolies” and “vested interests”, rather than as a driver of social equality.  This contradicts the Obama- and NDP-style rhetoric that Unions and regulations “grow the middle class”.

Many would criticize (or praise) The Economist as an apologist for the free market, and this article promoting social equality will not dissuade its detractors. But it does raise interesting questions about one of the ostensible purposes of labour and employment law — that it is to redress economic inequality, not generate it.

These days, there is no doubt a widespread perception in North America that people who benefit from labour law’s traditional protections enjoy a privileged position that is maintained by imposing burdens on everyone else.  Labour’s traditional answer to this argument has been that everyone should have the benefits of collective bargaining, an answer that has hardened into the defensive position that collective bargaining amounts to a constitutional right for those who already have access to it.

But in an era of $15 billion provincial deficits, deindustrialization, and work-to-rule campaigns by monopolistic providers of public services, one wonders whether this will be good enough to beat back coming demands for major reform.

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