Monday, June 10, 2013

Presentation: Worker Safety in Alberta: Trading Health for Profit

Worker Safety in Alberta: Trading Health for Profit
Bob Barnetson, Associate Professor, Labour Relations
Faculty of Humanities and Social Sciences, Athabasca University
Paper Presented at the Canadian Political Science Association 85th Annual Conference, June 6, 2013, Victoria, British Columbia, Canada

Full Paper Here

Good afternoon. I’m Bob Barnetson and I teach labour relations at Athabasca University. What I’d like to talk about today is how Alberta employers’ disproportionately influence provincial labour policy. I’m going to particularly focus on occupational health and safety (OHS) because, despite a very high level of workplace injury, Alberta has taken virtually no meaningful steps to regulate workplace safety—indeed, there is less regulation now than there was 20 years ago. In my view, this reflects the regulatory capture of Alberta’s OHS system by employers which itself is a manifestation of the political influence of corporate Alberta on labour policy—basically an elite-theory argument. This dynamic undermines workers’ right to safe and healthy workplaces.

Workplace injury in Alberta So let’s start with workplace injury. When the government of Alberta talks injury, it typically says there are 53,000 injuries each year. But a bit of digging reveals that this injury count is, in fact, a count of accepted workers’ compensation claims where workers couldn’t do some or all of their jobs the next day. We call these disabling injuries. By talking only about disabling injuries, the government is understating the true level of workplace injury.

When you factor in claims that required some sort of medical aid, injuries that aren’t reported to the WCB, injuries to those not covered by WCB, and injuries that don’t have to be reported, the true number of injury in Alberta is more like 500,000 per year. And with a workforce of about 2 million, that is roughly one worker in four.

That is an astounding level of injury and it tells us a couple of important things. First, Alberta workplaces are 10 times as dangerous as the government would have workers believe. And second, government injury-prevention efforts are clearly a total failure.

Injury prevention in Alberta Alberta’s injury-prevention efforts don’t work for two pretty simple reasons. First, employers have little chance of getting caught violating the rules. For example, on average, an Alberta workplaces will be inspected once every 14 years.

Second, when employers do get caught, there is no penalty imposed. Most typically, an employer is simply told “fix it”. Prosecution is rare and the employer can usually plead out the case and pay a fine to a community group. The fine is tax-deductable (that is to say it is subsidized by the state) and the community group is often an employer-run safety association (so the fine is paid to other employers).

Not surprisingly, the result is widespread non-compliance and very unsafe workplaces. This allows employers to externalize some of the costs of production onto workers, their families and taxpayers through workplace injury—the very outcome that statutory OHS laws were enacted to prevent.

Alberta’s weak labour movement
When I discuss Alberta’s health and safety system with people in other provinces, the question that most often comes up is how can this possibly be?

A part of the explanation is that organized labour in Alberta is weak, politically irrelevant and is largely excluded from public policy making. Only 25% of Alberta workers are covered by a collective agreement—the lowest rate of Canada. And, in Alberta’s private sector, the rate hovers around 12%.

Alberta’s weak labour movement is the result of what other researchers have characterized as decades of employer-friendly labour law, orginally designed to attract and retain investment by American oil companies. These laws aid employers to resist union organizing by creating well-known barriers to certification such as requiring a vote, no automatic certification when an employer interferes in organizing, no first-contract arbitration, and limitations on the right to strike (or even being a union member).

Additionally, the government frequently intervenes directly to benefit “friendly” unions and punish combative ones, to render illegal effective organizing tactics, and to resolve collective bargaining in ways that benefit the employer which, given the distribution of unionized workers, is often the government itself. By contrast, the government generally refused to intervene in labour disputes characterized by employer intransigence and, in some cases, violence.

For its part, the union movement is largely conservative and internally divided. Further, many Alberta workers don’t see trade unions as useful. Alberta’s energy-driven boom-and-bust cycles mean that workers have substantial individual labour market power during the booms (i.e., they do not need unions). And during the busts, unions have experienced difficulty protecting workers’ interests. Further, Canadian migrant workers often return to their home province during a bust, creating an exit option.

Electoral benefits of repressive labour relations
The other reason for Alberta’s repressive labour relations system is that it benefits Alberta politicians. As I noted, Alberta’s system of labour relations developed during the 1950s and 1960s as a means to attract American investment in the oil industry. Contemporary corporate Alberta is dominated by the energy industry and it continues to exert significant direct and indirect pressure upon the government.

Direct pressure includes financial donations to the conservative party by individual companies and corporate-controlled lobby groups. Recent investigations have demonstrated the corporate Alberta expects favorable labour policy in return for such donations. When the conservative party has not delivered oil-friendly public policy (e.g., around resource taxation), the oil lobby has punished the conservatives by funding the wild rose party.

Indirect pressure is harder to see and has historically centred on the political power of rural Alberta. Previous conservative governments required the support of rural Alberta in order to form government and thus developed a symbiotic relationship with the rural electorate. Government support (in the form of programs and transfers) maintained the viability and infrastructure of rural communities in the face of growing urbanization. Rural communities almost always elected conservative candidates to the legislature and conservative governments ensured electoral boundaries were drawn so there were a disproportionately high number of rural constituencies.

This rural electoral relationship was funded, in large part, by the oil industry. In addition to petroleum revenues, the oil industry drives activity in other sectors, such as construction, manufacturing, automotive sales and servicing, and the service and hospitality industries. Declining oil production, exploration and construction ripples through Alberta’s economy causing widespread job losses and a large reduction in tax revenue. This dynamic gives corporate Alberta a significant lever with which to shape public policy. In this, we see echoes of elite theory—although I’m not entirely sure that elite theory typically recognizes the degree to which corporate elites can dominate political elites.

In any event, one outcome of these dynamics is that the government faces few political threats when it continues a long tradition of privileging employer interests. There are certainly some changes afoot. Rural Alberta is losing population (and thus seats) and the wild rose party has made significant electoral gains in rural southern Alberta. But rather than seeking to construct a centrist support base, the conservatives have veered sharply to the right, including in labour matters. This appears to reflect an effort to regain support that has drifted to the wild rose as well as to appease employer demands for minimal taxation and regulation.

Regulatory capture of OHS
Returning to the issue of workplace injury, there is significant evidence that Alberta’s OHS regulatory system has been captured by employers. There are lots of different views about what regulatory capture means. My view is that regulatory capture occurs when one stakeholder can exert enough influence upon a regulatory body to start imposing costs onto other stakeholders. Here is the evidence I can see:
  • Enforcement: As I noted earlier, the enforcement of existing OHS laws is so weak as to be effectively non-existent. This transfers production costs to workers, their families and taxpayers in the form of injury. 
  • Funding: Then there is the issue of funding. Although it can be hard to see, Alberta’s OHS system is almost entirely funded by employers via transfers from the workers’ compensation board. These transfers are contingent upon the continued good will of the employer-dominated WCB. Bureaucrats privately indicate that they fear this funding would disappear if OHS enforcement became more aggressive. Again, poor enforcement externalizes costs for employers. 
  • Policy Development: Finally we have policy development. Industry-funded safety associations increasingly play a formal role in determining policy and standards as well as performing safety auditing functions. A center-piece of the government’s OHS strategy is the partners in injury reduction system. This system financially incentivizes employers to minimize their workers’ compensation claim costs (which reinforces the WCB’s own experience-rating incentive structure). Incentive systems like this typically result in aggressive claims management rather than safer workplaces which, in turn, transfers injury costs onto workers. Alberta’s system has rebated more than $100m to employers over a decade despite significant questions about its performance. 
Overall, Alberta’s OHS system entails little actual oversight, allows a high rate of injury, is funded almost completely by employers, has standards determined largely by employers and its centre-piece program (partly operated by employers) serves to lower employer WCB premiums even when participating employers ignore OHS orders against them. This regulatory capture of Alberta’s OHS system is one instance whereby corporate Alberta is able to operationalize its political influence.

Workplace injury as a bellwether for democracy
Bringing this paper back to the theme of this panel, one implication of this analysis is that Alberta’s regulatory system appears to undermines basic rights and freedoms associated with democratic societies—such as workers’ right to health and freedom to associate. Such rights and freedoms comprise the main bulwark that workers have constructed against capital organizing work in an injurious manner. This pattern broadly follows Gary Teeple’s analysis of the hierarchy of human rights that predicts social rights are subject to weak (or no) enforcement due to political and economic pressure exerted upon the state by employers as well as conflicts among various human rights.

The government’s unwillingness to enforce worker rights appears to flow from a particular set of political arrangements between corporate Alberta (dominated by the oil industry), the governing conservative party, and rural Alberta. Specifically, the revenue generated from the oil industry has allowed the government to ensure electoral success via public expenditures in rural Alberta. Electoral success has allowed the government to operate ineffective regulatory systems that benefit employers and assure their continued support. In these ways, this case provides some support for the notion that there is a democratic deficit in Alberta, at least partly related to the prominence of the oil industry.

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