Does the NTUC have “teeth”?

(This article was written in response to another written by one Kirsten Han, see here: http://wagingnonviolence.org/2012/06/the-sorry-state-of-unions-in-singapore/)

Do two countries wage full-scale war on each other the very minute they cannot find agreement? It is also for this reason, I believe industrial action should only be taken as an action of last resort, or even, never at all.

Mention the word “Trade Union” and many people would think of this:

One might think that picketing, strikes and demonstrations would be the supreme method of getting employers (especially large ones) to bend and buckle to their demands. Perhaps. But let’s look at some of the consequences:

–    If wages are rise above competitive levels, businesses will not find it profitable, maybe even impossible to continue business. They shut and everyone suffers.

–    If industrial action happens on public services ie. trains, airports, communications, then it brings about ripple effect that makes life more difficult for innocent by-standers like you and me.

–    Union-won wage increases cause an mis-allocation of resources by causing companies to hire fewer workers, to use more capital per worker, and to hire workers of higher quality than is socially optimal.

–    Strikes called to force management to accept union demands reduce gross national product.

–    Political influence can put unrealistic limits on the loads that can be handled by workers, restriction on tasks performed, altogether lowering the productivity of labor and capital.

Have a read at this paragraph by Milton Friedman:

“If unions raise wage rates in a particular occupation or industry, they necessarily make the amount of employment available in that occupation or industry less than it otherwise would be – just as any higher price cuts down the amount purchased. The effect is an increased number of persons seeking other jobs, which forces down wages in other occupations.”

We’re not saying that industrial action doesn’t work – we’re saying that it does work and is so effective in doing so that it ends up bullying an employer into, possibly unreasonable demands. The employers are the hands that feed that nation and provide jobs. Granted – they should not behave like slave drivers, but at the same time, they should also be defended against a Union that has political agenda.

Worse if a Government takes the side of the union and makes it illegal for an employer to fire a union, the government would have breached the employer’s right to contract. This tilts “negotiation” in favor of the employee. At that point, you are no longer bargaining with your employer, you are extorting and the government is the one holding up the gun.

Does our NTUC have teeth?
I think the analogy of “teeth” has been far too overused. Consider this thought by Sun Tzu, in the Art of War:

“The supreme art of war is to subdue the enemy without fighting”

The end goal is to protect worker’s welfare. Yet, not at the expense of the country at large.

NTUC has for the longest time, not resorted to industrial action. (Although, there is nothing stopping the NTUC from moving a strike – this stance is the least desirable and is akin to declaring war on the employer)

Rather, behind the scenes, away from public eyes and in cold, mundane court rooms, you will see the following:

–    Collective bargaining and negotiation

–    Low key private negotiations, so as to maintain healthy relationships between employee-employer

–    Tripartism: Creating an ecosystem between Government, Union and Employers. This takes the purpose of the Union beyond negotiating for worker’s welfare and furthers it to promote the creation of jobs for a national good.

Maybe the concept of industrial action as the guard dog of worker’s welfare may work in larger countries, I am not of the belief that it should be introduced here. Our country has a bigger goal of preserving peace, harmony and stability – in like faith, our actions should be civil, peaceful, yet not necessarily weak.

Tripartite partners from the Ministry of Manpower, the Singapore National Employers Federation, the National Trade Union Congress at the May Day Rally 2012. Photo credit: NTUC

 

 

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About the author

Benjamin Chiang

Benjamin Chiang is an enthusiast of good advertising, deep thinking, labour issues and chocolate. He writes also at www.rangosteen.com and occasionally on Yahoo!

The views expressed are his own.

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