Over the past few weeks of labour strife between school teachers and the government I've faced my own internal wrestling match as well. When a new issue or angle on union negotiations surfaces I naturally apply my business sensibilities to the situation. In simple terms, I view the teachers as the employees, the government as the employer, the students and parents as the customers, and BC residents as the angel investors.
With a business-like filter, I try desperately to understand how the situation and contract offers will fit within the existing provincial budget. I worry about the toxic relationship developing between the employees and the employer. How can any semblance of trust and respect, absolutely necessary in a successful business environment, exist after all is said and done?
No matter how I struggle to apply business logic to the situation, it never fits quite right. Even private sector union examples don't fit the public sector union case.
Why? Because the funding elements are different. In a private sector, union demands such as wage increases mean one of two things: increased expenses will be passed onto the customer through increased product prices or, if prices remain the same, the employer will recognize decreased profits. But in the public sector, union negotiations may see different results. There is no such thing as profit with public funds so increased expenses will either be passed onto the taxpayer or the funds will be skimmed from some other interest group or area of the defined budget.
In a situation like we face with the teacher's union demands, not only will the expenses increase due to wage gains but also due to the demands for smaller class sizes and greater educational services.
Perhaps the most obvious and effectual difference is the 'opt out' consumption clause for the customer. In the private sector, the customer has the power to reject price increases by not purchasing the product or by buying it elsewhere. But in the public sector, taxes are paid universally. There is no opt-out clause for us.
Here in lies the true reason that a business model has no place for public union negotiations. The funding structure is inherently different. Public sector unions are negotiating with the government over funds paid by every one of us, not some angel investors who believe in the business, the product, or the service. It doesn't matter if the taxpayers believe in the education system or whether students recognize the additional value provided by their teachers. We will pay either way. There is no place for business values in this equation, which is why the power of public sector unions is such a big deal.
Until next week, stay in the black and keep coming back.
