Canada Post Debate Rife with Misinformation

Commentary

Canada Post Debate Rife with Misinformation

The public and political debate over the Canada Post labour issue has been fueled by resentment and misinformation instead of factual analysis.

By Ryan McGreal
Published June 26, 2011

With Sunday night's Senate approval of the bill ordering locked-out Canada Post employees back to work and mandating a new contract with lower wage increases than the company's final offer, it's worth looking back at the media coverage and public discussion of the labour conflict.

Let's set aside, for a moment, the notion that Canada Post workers are simultaneously so irrelevant they should be chided for attempting to negotiate a good contract, and yet so essential that the government had to intervene to legislate them back to work.

In the public debate over the Canada Post labour dispute, I've been surprised at the sheer volume of misinformation flying around - even from media 'authorities' that are supposed to know better.

I should disclose at the outset that my wife works for Canada Post as one of the locked-out letter carriers. That makes me an interested party, but it also gives me something of an inside perspective on what's actually going on.

The first thing we need to do is squash the false information kicking around in letters to the editor, website comments and even some op-eds and editorials. Following are some important facts everyone should who wants to pontificate should first understand:

1. Canada Post is not taxpayer funded.

That's right: your taxes do not pay for Canada Post employees. The company is 100% funded from its own revenues in lettermail stamps, parcel delivery, direct marketing and so on. The wages and benefits that Canada Post employees are fighting to protect cost you nothing as a taxpayer.

2. Canada Post is a crown corporation.

The Post has not been a department of the government since the Canada Post Corporation Act was implemented in 1981. It operates at arm's length from the government but is subject to federal regulations around service levels, pricing and so on.

3. Canada Post is profitable.

Canada Post has turned a net profit for each of the past fifteen years. For the fiscal year ending in December 2009, the corporation reported a profit of $281 million and paid $38 million in taxes. Profits were up $191 million over the previous year, despite a 5 percent reduction in operational revenue.

4. Canada Post has one of the lowest stamp prices in the industrialized world.

Federal regulations cap lettermamil stamp price increases below the rate of inflation, so the real, inflation-adjusted price of a stamp tends to fall over time.

5. Employees do not start at seven weeks vacation.

When an employee is promoted to regular full time, generally after several years as a "casual" part time employee with no guaranteed hours, they get three weeks of vacation. Under the previous contract, employees do not reach seven weeks vacation until they have 28 years of employment.

6. The unionized employees were locked out.

After talks broke down, the union instituted rolling strikes to make a point without stopping mail delivery. It was Canada Post that locked the workers out and completely shut down mail operations.

7. The job is hard.

A lot of commentary in op-eds, letters to the editor and online discussion suggests that letter carriers are "lazy", "overpaid", "uneducated" and so on. However, the job itself is extremely difficult. It isn't the stroll-through-the-neighbourhood sinecure that many people seem to think it is, and it hasn't been for years.

Most routes in the lower city, for example, are around 15 kilometres in length and include hundreds of points of call. If a route has 500 houses and each house has four steps to the mailbox, that's 2,000 stairs up and down.

That much walking would be tiring enough on its own, but letter carriers have to do it while carrying 20-30 lbs. of mail as well.

8. Letter carriers will go on extended leave.

When you walk 15 kilometres a day, every day around the year, the likelihood of a serious injury approaches certainty. Between back injuries, hip and knee damage, slips, trips, falls, and dog attacks, it is all but inevitable that a letter carrier will be off work at some point.

By accumulating sick time, letter carriers can top up their short term disability payments so they continue to receive full pay during an extended leave.

It's also important to note that letter carriers do not get paid out for remaining sick time when they retire. Any time not used up is simply lost.

Revenge Egalitarianism and Income Equality

I also want to comment on what I've come to regard as revenge egalitarianism among those people who are incensed that the decent wages and benefits letter carriers enjoy haven't yet been stripped away.

There was once a time when public sentiment on wages and benefits turned around the idea that they should trend upwards. You know, for everyone - not just a thin crust of the deserving rich.

Over the past three decades, the postwar goal of a broadly affluent middle class has eroded steadily. Overall, the median income has stagnated, despite steady growth in labour productivity and gross domestic product.

In the same way that Hamilton's middle-of-the-road income statistics mask the two solitudes of affluent suburbs and desperately poor "Code Red" inner city neighbourhoods", the national income statistics mask a dramatic transformation in the distribution of wealth away from the middle.

Families on the upper end of the middle class have accelerated into tremendous and growing wealth, while families on the lower end of the middle class have dropped into deepening poverty.

Between 1980 and 2005, the top one-fifth of working Canadians by income saw their inflation-adjusted earnings rise by 16.4 percent. The number of people earning more than $100,000 a year (in 2005 dollars) doubled over that time, from 3.4 percent to 6.5 percent.

Meanwhile, the bottom one-fifth of working Canadians by income - the working poor - have seen their inflation-adjusted median incomes fall by more than 20%.

Our economy has generated strong growth in overall wealth, but most of that wealth has accrued to the very wealthy, while the wealth of Canadians below the median has actually fallen in real terms.

It's no coincidence that this trend coincides with two major changes:

A steady flattening of our income tax structure that lowered tax rates for the wealthy and extended exemptions and tax shelters for the wealthy, while actually increasing tax rates on the poor.
The rate of unionized workers fell from 34.6 percent in 1997 to 29.3 percent in 2009. Unionized workers tend to earn more than non-unionized workers, so a falling unionization rate is a drag on overall median incomes.

Organized labour achieved some remarkable successes during the 20th century in carving out a fair share of profits for workers - money those workers were able to reinvest in the economy to buy goods and services that generated positive multiplier effects on total economic activity.

The postwar era of strong union membership and very high top marginal tax rates was also an era of very strong, sustained economic growth. The steady annual increases in wealth were distributed much more evenly among Canadians than they are today. The economy was strong because workers could afford to buy things.

Again, as incomes have stagnated over the past 30 years, personal savings have steadily fallen to zero while personal debts have skyrocketed. Our economy today is so fragile that a significant increase in an inflationary commodity like oil is enough to trigger a sharp recession due to falling consumer spending.

The bottom line is that every time a corporation (or government) breaks the back of another union, we all lose out. The median income further stagnates, and the workers whose wages and benefits have been cut have less money to inject into the economy.

Finally, the labour market in general shifts more bargaining power from employees to employers, resulting in downward pressure on wages right across the broad middle class.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan wrote a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. His articles have also been published in The Walrus, HuffPost and Behind the Numbers. He maintains a personal website, has been known to share passing thoughts on Twitter and Facebook, and posts the occasional cat photo on Instagram.

82 Comments

View Comments: Nested | Flat

Read Comments

[ - ]

By jason (registered) | Posted June 26, 2011 at 22:04:08

Thanks for the info. I rarely get any information from old media outlets (TV, paper, radio etc...) but I was completely unaware of points 1, 2, 3 and 5.
Interesting stuff to say the least....

Raise the Hammer

Commentary