Economy needs generous wage increases - prof

SMU prof Larry Haiven says, “In the middle of a recession, one of the worst things you can do is cut wages.”

NSCC's Truro campus.

The details of the agreement reached for employees of the Nova Scotia Community College have not been released, but the implications of any outcome have incited speculation.

Larry Haiven, a professor in the Department of Management at Saint Mary's University's Sobey School of Business, specializes in labour economics and union-management relations. He is also a lead researcher for the Canadian Centre for Policy Alternatives. He thinks an NDP government could be problematic for the union.

"The NDP tends to act tougher with unions than you'd expect," says Haiven.

But a settlement at this stage could mean a compromise has been reached.

The details can't be released because the collective bargaining agreement requires that members of the Nova Scotia Teachers Union at NSCC ratify the agreement.

Union president Alexis Allen is optimistic about the settlement, although she won't reveal its terms.

"Our negotiation team did indicate unanimously to support it," she says. "And it wasn't through binding arbitration, which is actually surprising."

If that positive sentiment is any indication of an outcome, Haiven would be satisfied.

That's because he thinks the NDP's logic of only being able to afford a one per cent wage increase is faulty.

"That is going backwards," he says. "It's not keeping up with inflation."

Throughout the lead-up to Tuesday's decision, the government argued that one per cent was all it could afford. But running a deficit in a recession, says Haiven, isn't such a bad thing - even the federal government is doing it. Cutting wage increases is far more shortsighted.

"In the middle of a recession, one of the worst things you can do is cut wages," he says. "People don't have the buying power to keep the economy going."

As for the union, he hopes they didn't settle for even the 2.9 per cent people have been talking about.

"Unions are too nice," he says. "They haven't fought hard enough. That's why workers have fallen back recently."

As people such as Haiven speculate, NSCC employees will be deciding whether they agree. Gina Brown, director of marketing and communications at NSCC, is optimistic. "We're delighted," she said. "Of course it still has to be ratified."

And that means she won't say what the terms might be. The details will be heard by the executive of the union tonight, and in the next few days union members will have time to consider it and vote.

For now, school continues at the NSCC. That's what this was all about, said Brown. But it might not be until the end of the week that there's a clearer idea of what to expect.

"Lessons" from Saskatchewan

Haiven says the agreement may follow a precedent set in Saskatchewan.

"This is almost a play-by-play replay of Saskatchewan," he says.

Haiven is referring to Saskatchewan's NDP government of the 1990s. The government was elected in 1991 and by 1999 had to deal with an illegal nurses' strike that radically shook the province.

Haiven discusses Saskatchewan's debacle in his report "The Sky is Falling. The Sky is Falling. Or is it?" published by the Canadian Centre for Policy Alternatives.

The problem began after the government took power and commissioned an independent financial assessment for the province. That statement put the province's dire financial situation in the words of a third party. The government acted accordingly to eliminate the deficit rather than, as Haiven argues, in the interests of the province's workers.

That led to an illegal nurses' strike in 1999 that almost cost the NDP the election in a province that had traditionally been socially progressive.

Darrell Dexter's government in Nova Scotia commissioned a similar independent assessment in July, and has proceeded to act in a similar manner.

James Sentance is an economist who critiqued the Saskatchewan situation. Haiven paraphrases his assessment in his report: "Applying drastic measures to an economy in a recession can actually make the recession last longer."

That's what makes Haiven scared. But until the terms of the deal are announced, we won't know if Nova Scotia's NDP government has learned from the past, or if prairie history is repeating itself by the Atlantic region.

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