Tuesday, December 13, 2011

On the (alleged) effects of strikes.

It seems every time anyone goes on strike, whether public sector or private, there's a predictable chorus amongst the pundit class. No, not the one that says the right to strike should be removed, unions abolished, people reduced to serfdom or penury. No one needs to prove that one's dumb.

No, I want to apply a little critical pressure to the other chorus, the one which bewails the damaging effects of strikes. It's getting to the point that governments, not just idiot media, are blithely quoting billions of dollars in damages, lost profits, economic consequences due to people daring to insist they be treated as better than cogs in the corporate machine. (This actually has spread far beyond just strikes -- look at the propaganda spewed forth from the content industries on the supposedly damaging effects of media piracy.)

After all, it's on the basis of this supposed damage that we're currently experiencing pushes to strip collective bargaining rights, deem industries essential, intervene in strikes at blinding speed, and contract work out.

Here's the thing. Does no one think before dutifully writing these numbers down? Or before blindly insisting that there's a problem which needs to be solved?

Suppose that some workers go on strike -- public or private sector, whatever industry you like. How do you tell what the economic impact of this strike actually is? How much damage does it actually do?

It seems to me that you'd first want to know what economic activity is directly generated by the workers. That is, how much profit is generated by their labour. That's an immediate loss, and it would be fair to attribute that to the strike.

On the other hand, there are also costs associated with workers doing their jobs. Transit workers drive buses, which burn gas, require maintenance, eventually need to be replaced. Teachers require schools, which require electricity, heating/cooling, janitorial services, and so on. In short, to be fair, you not only have to count the immediate losses following the strike, but also the immediate gains -- how much doesn't need to be paid, and thus how much is saved, by the workers not going on strike.

After that, you'd want to know about indirect costs, whatever economic activity is not directly generated by the striking workers, but depends on their labour. As well as, similar to the point above, indirect benefits. Here things get very tricky, though. If we're talking transit workers, you can't simply assume -- as often is assumed -- that people who normally rely on transit to go to work do not go to work during the strike. Of course people still go to work; they just do so by alternate means. If people are walking or taking their bikes, that seems like a net benefit rather than a cost -- they may take longer to go to work, but aren't paying anything significant to do so. If people are taking taxis, then that generates economic benefit to the taxi companies. If people are carpooling, then that is probably pure cost -- but how much, really?

Whatever workers we're talking about, it's important to view the numbers with a good skeptical eye. It's fairly easy to calculate the direct costs and benefits of a strike. But the numbers given are never just direct costs; they include every possible indirect cost -- a worst-case scenario if there ever were one -- and blame that entirely on the strike. The numbers also almost never count benefits at all, direct or indirect, which is completely arbitrary.

Final point: even if the numbers given to criticize the economic impact of a strike were accurate, that still doesn't justify removing bargaining rights, dubbing industries essential, hammering through back to work laws or contracting work out. The honest way to make that argument, even limiting it to just economic issues (so, ignoring civil liberties or basic justice issues), would be to compare the two scenarios: bargaining rights vs. no bargaining rights, non-essential vs. essential, strike continues vs. back to work, work done in-house vs. contracting out.

And no one in our pundit class is that honest.

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