After ending strike action in early September following “significant progress” at the bargaining table, the British Columbia General Employees’ Union (BCGEU) last week announced the details of the tentative agreement reached with the B.C. NDP government.
Unfortunately for the 33,000 workers of the BCGEU, the details of the agreement are not looking good. The main demand of the union, reflecting pressure from the rank-and-file workers, was for a cost-of-living adjustment (COLA) to be included in the agreement.
Workers, facing wage cuts across the board due to inflation rates not seen in decades, rightly demanded COLA protection. This would guarantee that wage increases would at least match the rate of inflation.
Winning COLA protection for the workers was the whole point of the strike. Strike action was mobilized with picket lines established at liquor and cannabis distribution centres, and overtime work was banned by the union to fight for this demand.
In what is sure to be a source of major disappointment and frustration for the rank-and-file workers of the BCGEU, the union leadership has capitulated precisely on the demand for COLA protection.
According to the information released on the BCGEU’s website, the general wage increases for the three-year deal are as follows:
- Year 1 – Effective April 1, 2022 increase all rates of pay by 25 cents per hour and then increase all rates of pay by 3.24%.
- Year 2 – Effective April 1, 2023 increase rates of pay by the annualized average of BC CPI over 12 months starting on March 1, 2022 to a minimum of 5.5% and a maximum of 6.75%.
- Year 3 – Effective April 1, 2024 increase rates of pay by the annualized average of BC CPI over 12 months starting on March 1, 2023 to a minimum of 2% and a maximum of 3%.
The wage increases in the proposed deal are nominally tied to the annualized average of the B.C. Consumer Price Index (CPI). This makes it appear like a cost-of-living adjustment, i.e. that wages will be tied to the rate of inflation. Indeed, the union leadership is portraying these increases in a positive light, as if they amount to COLA protection (or at least “meaningful wage protections”), in an attempt to convince the rank and file to ratify the agreement.
However, if wage increases are capped, it cannot be considered a cost-of-living adjustment. COLA means tying wages to the rate of inflation—without any caps.
Right off the bat, it can plainly be seen that the wage increase for the first year of the deal is already below inflation. With inflation at seven to eight per cent this year, a wage increase of 3.24 per cent amounts to a reduction in wages, even with the additional 25 cents per hour.
There is also no reason to assume that inflation will be lower for years 2 or 3 of the agreement. A real COLA agreement would not have any caps and would tie wage increases directly to the inflation rate. If inflation drops to five to seven per cent or lower for year 2, and drops to between two to three per cent for year 3, then the union leadership might be able to get away with their capitulation. In this best-case scenario, it would appear that the workers were getting COLA protection despite the cap on wage increases.
However, what does this deal look like if inflation does not drop, or if the rate of inflation even increases in the next couple years? In those cases, the fact that this deal does not offer COLA protection, or even “meaningful wage protections”, will be clear to everyone and the workers will continue to suffer objective wage cuts.
There are other components to the tentative agreement between the BCGEU and the government. These include temporary market adjustments for wages and shifts in wage grids. However, given the cap in general wage increases, it can in no way be argued that the tentative agreement has won COLA protection for the workers.
Et tu, HEU?
It was clear from the beginning that the BCGEU negotiations would set a precedent one way or another for the other public sector unions at the bargaining table in B.C. If the BCGEU were to win COLA, this would encourage the other unions to fight for a similar deal. On the other hand, a capitulation on COLA would also serve as a precedent for the other unions. A capitulation by the BCGEU would give an easy out to the unions with weaker leaderships already looking to back down from the fight, such as the Hospital Employees’ Union (HEU).
On the same day that the BCGEU announced the details of its tentative agreement, the HEU, another major public sector union at the bargaining table in B.C., also released the details of its tentative agreement with the NDP government.
The proposed general wage increases in the HEU agreement are the exact same as those in the BCGEU agreement. Just like the BCGEU leadership, the HEU leadership has completely capitulated on winning COLA protection, and is presiding over effective wage cuts for the workers.
If the BCGEU leadership had stuck to its guns it was entirely possible that the workers could have won the COLA protection they were demanding. This would have required determined and militant methods of struggle, which the BCGEU leadership consistently shied away from. The strike action itself was timid. The sad fact is that the BCGEU leadership capitulated before even bringing out all 33,000 workers in the union for strike action. Having some 1,000 workers picketing liquor and cannabis distribution centres hit government pocket books, but also didn’t help with public opinion. Even when strike action was escalated, it didn’t include setting up more pickets or job action by more workers, but was limited to an overtime ban of all BCGEU employees—something that probably should have been done before pickets went up, along with other work-to-rule measures.
The various public sector unions negotiating this year in B.C. needed to establish a common front to fight for common demands, COLA agreements, and guarantee solidarity actions in the event of strikes. This would have put the unions in a very powerful position. This combined with militant, determined strike action could have easily won COLA protection for public sector workers in the province.
Sadly, the union leaderships shied away from anything resembling this. There were no moves to form a real common front and rather than pushing forward with militant action, the union leaderships rolled out frankly timid negotiating tactics and strike actions. Selling the workers down the river, they have now capitulated to the B.C. NDP government and have agreed to deals without COLA protection for the workers.
The retreat on COLA and the proposed general wage increases in the tentative public sector deals are a total capitulation across the board by the BCGEU and HEU leaderships. The deal signifies a capitulation to the general logic of capitalism and shows faith in the perspectives of the Bank of Canada. This is a capitulation to the interests and profits of the ruling class, which the B.C. NDP are desperate to protect.
As we explained in a recent article, the Bank of Canada has been telling businesses to attack the living and working conditions of workers for the sake of inflation, arguing that businesses should resist increasing wages to match inflation.
Bank of Canada Governor Tiff Macklem recently said in a speech to the Canadian Federation of Independent Business (CFIB), a right-wing corporate lobbying outfit, that “as a business, don’t plan on the current rate of inflation staying. Don’t build that into longer-term contracts. Don’t build that into wage contracts. It is going to take some time, but you can be confident that inflation will come down.”
Some have described this perspective as “wishful thinking”. But the B.C. NDP government and the BCGEU and HEU leadership appear to have taken these words to heart and capitulated to this perspective. Aside from the fact that the Bank of Canada is a key pillar in the capitalist system designed to manage and tinker with the system to guarantee and increase the profits of the capitalists, there are a number of things wrong with the Bank of Canada’s perspectives in relation to inflation.
To begin with, even the bourgeois press has noted that the predictions of central bankers and economists on inflation and interest rates have been consistently wrong. When discussing inflation and interest rates, Loretta Mester, president of the Federal Reserve for Cleveland, recently said, “Exactly how high rates will go will depend on the path of inflation. As we’ve seen over the past two years, with the exception of a few contrarian analysts, neither markets nor central bankers have been good at predicting that path.”
What’s more, if the rate of inflation were to drop in the next year or two, even to the usual rate of two per cent a year, the price increases we have seen recently due to inflation at seven to eight per cent are not likely going to be reversed. In other words, if and when inflation begins to lower, we are not going to see a reversal in price increases. These price increases are now built in. Even if inflation lowers, the capitalists will not want to lose those increased profits. In order to see a general decrease in prices, we would need to see not simply a lowering of the inflation rate, but actual deflation.
This means that unless workers receive wage increases that match inflation, they will never recover the wage reductions they suffered because of rising inflation. For the BCGEU and HEU workers, this means that even if inflation drops for years 2 and 3 of their agreement, they will not recover the wage cuts they suffered due to this year’s high inflation. It still amounts to a wage cut and this alone shatters any arguments about COLA by the BCGEU and HEU leaderships.
Fight for COLA
The NDP is supposed to be the party of labour. As such it should be legislating better working and living conditions for the working class. The bare minimum demand that the unions and NDP should be fighting for is COLA agreements for all workers. Especially in the face of high inflation rates not seen in decades, the B.C. NDP should have accepted COLA demands for all public sector unions, and also be fighting for COLA protection for all workers in the province.
Instead, the B.C. NDP has shown itself to be much more concerned about protecting the interests and profits of the ruling class. The B.C. NDP presented itself and acted not as the party of labour, but as the most efficient managers of capitalism. They are determined to please their masters in the ruling class at the expense of the workers. Following this logic, the B.C. NDP government rejected the demands for COLA agreements and offered deals that effectively amount to wage cuts for public sector workers.
This capitulation to the interests and profits of the capitalists by the B.C. NDP government, however, does not excuse the union leaderships who have accepted these tentative agreements and capitulated not only to the NDP and their corporate masters, but also to the perspectives of the Bank of Canada. If these deals are accepted, it means the workers will be sacrificing their living and working conditions for the sake of the profits of the capitalists and their system.
Both the BCGEU and HEU leaderships are naturally recommending that members vote yes to ratify the agreements. Workers should vote no. These deals mean effectively locking in wage cuts for workers for at least the next year or two in order to protect the profits of the capitalists. Ratification would be a setback in the struggle for COLA protection for all workers across the country.
However, there are signs of discontent in the BCGEU over the tentative agreement. The workers in the union demanded COLA protection and voted 95 per cent in favour of strike action to win it. The union leadership mobilized pickets and other strike action to fight specifically for this demand. Now the workers have been sold down the river by the union leadership and cannot be happy about it. How widespread these feelings of anger are amongst rank-and-file workers in the union is not known, and there is no way to know at this time whether the tentative agreement will be ratified or not by the members.
Opposition to the tentative agreement and the organizing of a “no” vote on the deal are underway. This will be an important battle inside the union. A victory for a “no” vote on this COLA capitulation would be a vote of no confidence in the union leadership. It would open the door for the removal of the leadership and raise the possibility of the election of a new leadership to launch a determined fight for COLA.
There have been calls for the setting up of members’ organizing committees at every worksite organized by the BCGEU to organize the “no” vote and reject the tentative deal. A well-organized opposition in the union with a solid political program could galvanize the rejection of this capitulation by the leadership. Rank-and-file committees should also be organized in the HEU and other public sector unions to join the fight. The battle has not been lost and the war is far from over!
Vote against the capitulation!
Say no to wage cuts!
Strike against inflation!
Fight for COLA!
Victory to the BCGEU and HEU workers!