Unions, Strikes, and Executive Pay
Posted in Unit 2 on Jul.18, 2008
There’s been a spate of strikes recently over pay. Teachers, postal workers, and fire-fighters have all walked out over in protest at the pay deals they’ve been offered. On Wednesday, several hundred thousand council staff became the latest disgruntled employees to down tools, resulting in schools and libraries closing, flights and driving tests being cancelled, and bins being left unemptied, among other things.
BBC journalist (and Dragons’ Den presenter) Evan Davis explains on his blog how the argument goes whenever he interviews union representatives in the midst of industrial action at the moment:
I put what I think of as the obvious points about strikes: “we have to avoid wage price spirals”; “if the money isn’t there for a pay rise, it isn’t there”; “there’s no entitlement to an inflation-matching pay rise” etc.
But on each occasion, the answer comes back that chief executives have not shown the same level of restraint, so why should workers?
Davis admits to being perplexed about how to take things from there. He seems to find the union representatives’ argument persuasive.
He shouldn’t. The union officials aren’t disputing the argument that he offers for pay restraint. Instead, they are attempting to justify workers ignoring the argument on the ground that executives have ignored it. This is a tu quoque. Just because the executives have taken more than they should doesn’t mean that everyone else can too. Pointing the finger at someone else who has done something wrong doesn’t get you off the hook if you’re doing it as well.
Admittedly the situation is a bit of a mess. The economy can’t sustain the pay rises that the unions are asking for, but the unions won’t stand for workers having to exercise pay restraint when executive pay is spiralling upwards. So what’s the best way out? What should the unions be calling for?
Lower executive pay would get the unions the consistency between workers’ and executives’ pay deals that they’re after without destroying the economy. They shouldn’t be striking for higher pay for themselves, but perhaps they could strike for lower pay for their bosses instead.