Government Interventions in Labour Disputes Have Unforeseen Costs: C.D. Howe
Institute

TORONTO, June 17 /CNW/ - When politicians consider intervening in labour disputes, they should also consider the long-term, potentially unintended results of such action, according to a study released today by the C.D. Howe Institute. In "The Laws of Unintended Consequence: The Effect of Labour Legislation on Wages and Strikes," authors Benjamin Dachis and Robert Hebdon investigate the lessons from previous government legislative interventions, whether through compulsory arbitration, "back-to-work" legislation or bans on replacement workers during strikes, and find these actions have unintended results that give reason for sober second thought.

    
    Among their findings:

    -   Banning strikes increases public-sector wage levels appreciably.
        Legislation requiring compulsory arbitration in disputes involving
        public employees has increased wages by about 1.2 percent per
        settlement.

    -   "Back-to-work" legislation reduces the likelihood of a freely settled
        contract in the next round of negotiations, perpetuating the cycle of
        government intervention.

    -   Bans on temporary replacement workers reduce wages, contrary to
        previous evidence, and increase the likelihood and length of strikes,
        as do reinstatement rights for striking workers.

    -   Allowing union certification only through a secret ballot decreases
        the number of strikes and lowers the wage costs of unionized
        employees.
    

This Commentary provides policymakers with a fresh perspective on their potential actions and consequences in the minefield of labour disputes. Whether governments seek to shift the balance of labour-employer power, end work stoppages or prevent them in the first place, policymakers should weigh the unintended consequences before acting.

For the study go to: http://www.cdhowe.org/pdf/commentary_304.pdf

For further information: Ben Dachis, Policy Analyst, C.D. Howe Institute or Robert Hebdon, Professor, McGill University, Phone [phone], email: [email protected]