What We Are Selling
By Bill Walsh
For most workers, contract negotiations are something of a mystery. One of my jobs as a union activist, and I hope as a union leader, is to tear away some of that mystery. Leading groups, in particular rank and file leaders, like stewards,[i] have to know the nature of negotiations, to know what they are all about.
If you are heading into a fight, it’s wise to know the kind of fight you are getting into. Then, you have a damn sight better chance of coming out ahead, than if you go in without knowing the nature of the fight. And negotiations are a fight. And I’m going to advance some views from my experiences, as to what kind of fight it is.
Actually, negotiations are bargaining for a price. You are selling something: somebody else is buying something; you bargain for the price.
When we enter into negotiations with the Company, we have something to sell them. We are selling our ability to work, our muscle and our brain. We make a promise that we are going to come to work on time, according to our schedule and to work five days in every week, and maybe even some overtime on occasion.
Really, what we are selling is our ability to work, our labour power[ii]. We sell that to the Company, and to a certain degree, we also sell our commitment-our promise during the life of the contract, for the price we are to get for our labour, we won’t strike. So that’s what we sell to the boss when we negotiate.
What is he buying? He’s buying that: your work, your services, your promise that you will be there every morning-barring sickness, accident, snowstorm, or the like. He’s buying your promise that you will not conspire with your fellow workers to stop work (He’s got that written into the contract. As a matter of fact, he has also had it written into the law!)
But you are not only bargaining for direct wages. Part of the price of your labour power is paid in the form of vacations, pensions, and statutory holidays, premiums for overtime and shift work, and things like that. They are all part of the price.
It even includes agreeing on matters such as seniority rights[iii]: for example, if there is going to be a cut-back, which workers are to be laid off, and in what order: what weight will seniority have in promotions, etc…It is all part of the price we get in return for selling our ability to work, and the Company buys it. The argument is about the price. And that’s what it’s all about.
When a contract is reached and signed, the workers[iv], acting through their union, agree that they will not strike during the life of the contract. They have sold their ability to work for a given period of time-the life of the contract. Part of the contract provides that negotiations for a new contract will commence usually two or three months before the expiry date of the present contract. According to the law, you are not allowed to strike during the life of the contract, and even after the expiry date, except if you have gone through the conciliation procedure. Since you are selling your most vital asset-your ability to do useful work, your means to earn a living-it is a very serious process. The price you are going to get will be critical for you and your family during the two or three years of the contract.
THE NICE GUYS
Some people would have us think collective bargaining is really something like a pleasant debate among friends: that the side that scores the debating points is the winner. That it is anything but harsh. They would have us believe that workers and management are really partners. You know, after all, the big thing is we are all working together for the same company! We have the same interests! Since we are all in this together: all that is needed is an exchange of ideas on what’s right and what’s wrong-a meeting of minds-for the common good of all: owners, management and workers!
When you listen to your own company spokesmen opposite you at the bargaining table, you realize they are very able people. They are gentlemen; speak with courtesy, even considerate and friendly. Dollars aren’t the most important thing: friendship, partnership, co-operation, those are the most important things to keep us going as a big happy family! Just about every company in many industries I have dealt with as part of a union team representing workers-just about every company sought to create the same illusion. I must confess I was somewhat surprised to find that after so many years of negotiating with Mine Mill, your Company was still talking that way in 1969, in the first set of negotiations in which I was involved with them.
Falconbridge Company and Falconbridge workers, it seems, had a special kind of love relationship, different from other companies. Other companies may be interested in higher profits and lower labour costs, but not this Company! Their interest in producing nickel is not because of profits but because it’s a useful product and satisfies the needs of certain people. Their interests in workers is not because they are essential to produce profit for the Company, but because the workers are people, and they are interested in people! Well, that is hokum! Companies are in business to make profit. They hire people to make profit for them. Everything else is secondary to that. If Falconbridge and INCO weren’t making profits out of their business, they would get out of nickel and get into something else where they would make a profit.
The owners of General Motors, the owners of Ford, the owners of General Electric, Westinghouse, and Firestone-they’re no different. If General Motors stopped making profits from automobiles, they would stop producing automobiles. If there was more profit in making shoes, they would make shoes. Then you would be able to buy General Motors shoes or General Electric shoes!
Falconbridge is not in the mining business because nickel makes people happy with shining things. They’re in business for profits.
IN BUSINESS FOR PROFIT
Profit is the amount our guys add to the value of the ores. In the ground, the ores aren’t worth anything until somebody digs them up and smelts them, refines them, and so on.
Until they get the product to market, it won’t be sold at a profit.
It is you fellows who dig up the muck, who get it to the surface, crush it, smelt it, refine it-make it into something useful that can be sold. If this company pays the men four dollars an hour for the work, their profits come from the fact that the workers, by their labour, have added more than $4 an hour in value to the product. The company pockets that additional value that you added to the muck by your labour, and for which you were not paid.
That’s the only source of profit. The greatest economists have come up with no other explanation that makes sense. Any other explanation for the source of profits is nonsense. The workers at work are the source of profits. Profits come from their “unpaid” labour.[v]
I would like to tell you a story. I told the company during negotiations in 1969 I was not interested in educating them, but just trying to get rid of some of the smoke screen about them only being interested in the good of our people, and all that sort of stuff.
I told your negotiating committee and the company a true story of something that happened to me in another set of negotiations, with another company. Some of you will remember there was a big strike wave across Canada in 1946. After the war, workers in big steel companies, big electrical manufacturers, auto plants, seamen and lumber workers in Canada were on strike.
As it happened, I was a representative of a large number of workers in one of the largest companies in the electrical manufacturing industry. By that time we had been on strike about three months, but we weren’t getting very far trying to negotiate a settlement of the strike-trying to get a contract.
We had no such thing as a strike fund in those days, and our people were having a tough time. But we were determined to keep fighting. We knew the company’s profits were cut off so long as they didn’t have workers in the plant producing for them.
On the agenda for negotiations that particular day was the subject of paid vacations. Some of you may remember, but in those days, the sum total of vacations was one week with pay for most workers. I don’t recall for certain, but I believe it took about ten years of service to get two weeks of paid vacation.
That morning in negotiations, the company had their regular crew of experts there. But sitting behind them was a man I had never seen before. He sat quietly for some time. Then I began talking about wanting three weeks’ vacation for old time workers. “You have a man working for you for ten, fifteen, twenty or even thirty or more years-and he can never look forward to three weeks’ vacation before he dies.”
I was making a big pitch about this old time worker, his wife and kids[vi] who didn’t have the right to a decent vacation during his entire working life. As I said, this new fellow on the company side had been sitting quietly behind the company experts, patiently listening for a couple of hours. Then he moved his chair forward. The other company people made room for him. Then we knew this was the big boy. The guy with authority.
He spoke with an American accent. He said: “Now listen, Mr. Walsh. My name is so-and-so. I was sent here from the head office of the company in the U.S.A. We want to get this plant back into operation. We recognize that the only way we can do it is to settle the strike and sign a contract…” Those are not his exact words, but they’re close enough. “We operate plants to make a profit, and we can’t make a profit if the plants don’t operate. “
“I’ve listened carefully to your remarks and what you’ve said about the old-timers who ought to have three weeks paid vacations with their families. Sounds O.K. But to be honest, I’m not really interested in this old-timer and his family. I don’t even know him and probably never will. What really interests me is how much it will cost to give the old-time workers three weeks of paid vacation.”
The big man from the U.S.A. made himself perfectly clear. “You see, in this electrical industry, we have to buy many commodities. We have to buy copper, rubber. We have to buy steel. We buy enamel, paint and many other commodities. When we buy these things, we pay the lowest possible price.”
“We also need to buy your labour. That’s what we’re here for, to end the strike so your people will start working for us. So let’s talk about the price you’re asking. To us, labour is just like copper, rubber, steel, paint and so on. It’s a commodity. And we’re going to buy it for the lowest price we can-including the cost of vacations, if that is part of the price.”
I have to thank that gentleman from the U.S.A for teaching me something. He taught me that at the moment of truth, when the smoke is cleared, when decisions have to be made, employers recognize the facts of life too. What was so surprising was that he said it to me and to the rest of the workers’ committee. By clearing the air, he speeded up the time it took to settle the price of our labour-to settle the strike and sign the contract.
The Settlement- A Power Struggle
We’ve talked a little bit about negotiations, what they are about. We’ve discussed where profits come from. Now I want to talk about what is really the most important thing in negotiations.
I’m going to put the same question to you that I asked your Local Union Executive and Negotiating Committee at the leadership school we held a short while back.
I asked them to consider this: after about 4 ½ years of World War II, a settlement was negotiated. But what kind of negotiations was held between the so-called Western Allies, our side and the other side-the high command of the German general staff?
Hitler was dead. Admiral Doenitz was in charge. Eisenhower, Zhukov and some others represented the Western Allies. After more than four years of war with more than 25 million killed, the entire negotiations lasted less than an hour. A document was set before the German command and they were told to read it and sign it. They read it and signed it. That was the negotiations!
On the other hand, if you remember the Korean War, you will recall that those negotiations took three years. The two sides sat opposite one another for all that time, before the paper was signed, the important clause was the boundary line between North and South Korea. The boundary line was set very close to the battle lines, where the fighting had actually stopped. It was adjusted a few yards or so on one end, and a compensating hundred yards on the other end.
In World War Two negotiations, one side had all the power, the other side had none. In Korea, the balance of power was pretty nearly equal. Nobody has been able to win. The question is one of power: and what was achieved through power. That’s what made the big difference!
Let’s put it another way. The most brainy man who ever lived was probably Albert Einstein, a brilliant mathematician and outstanding thinker. Let’s say that when General MacArthur and the Allied high command went on that battle ship in the Pacific Ocean in 1945, they found Albert Einstein as one of the negotiating team of the Japanese Imperial Command.
In other words, let us assume that the Japanese had on their side the most brilliant genius that ever lived. How much difference would that have made in the result of those negotiations? Very little. The fact is that the Japanese armies were crushed and destroyed. Einstein might have been able to get a settlement that was a tiny bit less tough, but that is all. Brilliance is important, but it can never make up for power. It can’t change the facts of life.
The facts of life are that power[vii] is the main determinant in any struggle. Intelligence, knowledge, brilliance are of vast importance, since they are important in building up power, knowing how to use it-understanding timing and other factors. And they are important in knowing when not to use power. But these skills can hardly fill in when all power is gone.
That’s not much different from the essentials when unions negotiate with big companies. Skill, experience, intelligence, understanding of strategy and tactics, these are important in helping to build up, to recognize, power, to know how and when to use power-or to avoid using power. On both sides, those who recognize the facts of life know that it is the balances of power which will decide the outcome-the balance of power and the knowledge of how to use it.
The Real Meaning of Leadership
Does that mean there’s no value to skill and even brilliance in the negotiating room: that what happens in the negotiating room is of no consequence, since it is only power that counts? I think it would be a mistake to come to that conclusion. It would be quite wrong to say what happened in the negotiating room and in the private meetings of the committee is not important: that the outcome is decided only by naked power. What happens (or does not happen) in the negotiating room is important largely because of the way it helps or hinders the building up of power in the struggle as it reaches the critical period. [viii]
To Strike or Not To Strike
Quite often during negotiations, the top leadership of the Union is physically separated from the remainder of the executive and of course from the membership. The negotiating committee is sometimes compelled to spend days on end locked up in the bargaining room or close to it. Things are required to be done to develop the power of the membership, so as to peak that power at the most decisive time. At such times, particularly, a great responsibility rests on the stewards. Your function as part of the over-all leadership of the Union becomes tremendously critical at such times.
You may conclude from all I am saying that all I can see ahead in the next set of negotiations is a strike. I’m not saying there’s going to be a strike in the up-coming negotiations or in any set of negotiations. I’m in no position to know it at this time, and neither is anybody else.
What’s important to bear in mind that the employer wants to buy our ability to work, and to have us continue to work. He bargains for the price he has to pay to get our work. But if he concludes there’s no possibility that we will strike, or that we can’t strike-then he knows he does not have to pay as much for our labour power.
Therefore, the job in building up power is not for the purpose of going on strike-although we may have to-but to build up power so that we don’t need to go on strike. So long as the other side knows that we can and, if necessary, we will-that often will be enough. Sometimes there are mistakes and miscalculations-but generally speaking, that’s the key.
So companies have power. It is important to remember that, because the result of the contract negotiations struggle is to a large extent dependent on the balance of power-the relative power at the time.
How much do we have compared to them-in terms of power? What determines the outcome of the struggle is who is strong enough and can hold out longer.
That doesn’t mean we want to hold out. It doesn’t mean we want to suffer. But we have to show them we are prepared.
All of the things I have said now regarding building power and strengthening our own ranks can be referred to as the subjective forces, i.e. mainly the people in our own leadership and our members. Without their understanding, their strength, we have very little(power) indeed in any serious struggle. It follows that if we work properly, honestly, wisely in a planned way, we can do a tremendous amount to give us the maximum possible power.
Nevertheless, I must draw your attention to another set of factors that are very important when you try to estimate the balance of power. In sharing my thinking with you up to now, I have no doubt indicated something of this already, what can be called the objective factors, e.g. the state of the economy. Is it on the upgrade or the downgrade? What are the trends in the labour movement generally, and particularly with regard to struggles and settlements, etc. etc.?
This is the other big aspect of the question of power which every leadership worth its salt must do its best to know and keep tabs on. In this talk to this group of stewards, I’m not developing this question of the objective factors[ix], since I regard the main problem now as having to do with the subjective factors, as we move closer to the time of preparation for the next negotiations.
[i] Networks of voluntary rank and file leaders prior to the Rand Formula, sometimes called shop stewards, were essential to starting and maintaining unions. Most often they operated clandestinely to prevent firing, blacklisting and employer and government disruption. They were referred to as the “backbone of the union”. They were a two-way transmission belt between the union leadership and membership. When unionism was eventually forced on employers, and historic compromises enacted by governments, steward’s bodies became more formalized. Over time as labour relations and worker safety and other issues became more professionalized, the role of stewards bodies shrank and the relationship between leadership and membership was more limited. Often the role of the steward was confined to policing the first few levels of standardized grievance procedure. Sometimes they were even eliminated in favour of full-time or part-time worker representatives, paid for by the employer.
[ii] Bill’s uses “labour power” is in its simplest form. But that little moniker also carries with a great historic political economic background that is particularly necessary for understanding labour relations in Canada in the 21st Century. Walsh refers to a time when the working class was largely confined to the private sector, while today’s “labour power” and the “working class” needs a much wider application to embrace the very large public sector work force along with working people in brand new sectors of society that are every bit as much “working class”, and the buying and selling of “labour power” is every bit as relevant .
[iii][iii] Seniority is often the aspect of the union contract that causes the most friction within a union, but in the early years of Union negotiations, it remained the only method open to unionists to prevent employer discrimination designed to undermine the union’s solidarity.
[iv] One aspect, often forgotten, is that when workers agree to band together to force employers to negotiate with them collectively, they hand over some of their individual rights to the collective. For example, the “carriage” of grievances now rests with the Union rather than the individual worker. If it was otherwise and every individual was free to approach the employer individually to make their own settlement of their grievance, the purpose of unionism is defeated.
[v] This is easiest understood in the private sector. For example, in my own industry, fishing, it was easy to see what pink salmon was being sold for in the market place, while we could see the pittance we were being paid, especially during negotiations leading to my first strike when the companies opened negotiations by cutting our price from 11 cents per pound the previous year to 7. This concept may not be so easily understood in the public or service sector, that are now even more critical to the production and marketing of products and the making of profit, even if those sectors are more remote from the point of commodity production, e.g. education, health, day care, etc. The division of labour in society has expanded exponentially since the time Walsh was giving his stewards’ class.
[vi] This was a time when the working class was bombarded with tv shows such as “Leave It To Beaver” in which the male was the sole breadwinner and the woman stayed at home, looking after the 2.3 children and applying the skills she learned in Home Economics at high school. It was reflected in the character of the work force and the trade union movement, with a few honourable exceptions. This stewards class that Walsh was addressing was likely all male.
[vii] This is the most bedeviling question facing trade union leaders and members alike. Underestimating power can have disastrous consequences that a number of strike struggles I was involved in could illustrate. Similarly, overestimating power can also produce equally disastrous results. Today’s huge labour relations battles and divisions within labour’s ranks reflect differing estimations of both labour and capital’s strengths and weaknesses. Charges of “sell-out” or calls for a “general strike” without an estimation of balance of forces is sheer demagogy and political posturing. Correctly bridging estimations within labour’s ranks is the key to moving forward, and it has now become job one, and it is not easy and history is replete with so many examples where we have mis-calculated. Unfortunately, we now have a culture where admitting mistakes (and correcting them) are seen as a weakness. We have a culture of inner-union and inter-union competition where admissions of mistakes are pounced on for political gain. That, too, MUST change.
[viii] This is possibly the most important lesson from Bill’s presentation, and not unrelated to the previous footnote. Members in unions have become more passive, except at bargaining and strike time. Leaders are elected to deliver results, and see themselves less and and less as THE union. The real power is always vested in the membership and more responsibility for the fate of the union must devolve back to the
[ix] When Bill Walsh was giving this talk, the labour movement was in a post-WWII transition to the Rand Formula and a virulent anti-communism that constituted some of the “objective factors” facing Mine Mill in its negotiations. A long series of raids on Mine-Mill had hived off the largest part of Local 598 (at INCO) and feelings among workers in Sudbury were bitter. In this truncated version of Walsh’ talk, I have had to omit large sections dealing with Mine Mill specifics. In the process, unfortunately, I had to limit a very important message Walsh delivered with respect to “that other union” and the need to get past subjectivity and make common cause in the fight against a common opponent. Today, the effects of global so-called trade agreements, neo-conservatism, and renewed assaults on collective bargaining have changed the political and economic landscape for workers and would be considered part of the new “objective factors” facing labour. Some leaders have failed to grasp these new “objective factors” and conduct union business in the much the same way as before. Where there is little appreciation of the changed objective landscape, labour unity becomes a casualty to union competition and bruised egos and dynastic aspirations of labour leaders. Meanwhile, the whole movement is imperilled.