Partisanship, Globalization, and Canadian Labour Market Policy: Four Provinces in Comparative Perspective, by Rodney Haddow and Thomas Klassen, Toronto: University of Toronto Press, 2006, 390 pp., ISBN-13: 978-0-802090-90-4 and ISBN-10: 0-802090-90-7

This book asks two basic questions about the determinants and trajectories of labour market policy in four Canadian provinces since 1990. First, to what extent does the ideological orientation of governing parties (centre-left or centre-right) affect policy outcomes? Second, have the goals and strategies of labour market policy been restructured along neoliberal lines? Six aspects of provincial labour market policy are systematically examined over the period 1990-2004: industrial relations, employment standards, occupational health and safety, workers’ compensation, job training, and transfers to employable persons (principally unemployment insurance and “welfare”). The provinces examined are Quebec, Ontario, Alberta and British Columbia. A chapter by Steffen Schneider then offers a wider comparative perspective by examining the same labour market policies in three quite different German Länder – Bavaria, North Rhineland-Westphalia, and Saxony-Anhelt (in former East Germany) – in the post-unification period.

As the book’s title suggests, the authors are particularly interested in how economic globalization intersects with the questions they pose. They want to assess the often-made claims that globalization has rendered partisan political differences increasingly irrelevant (Q1) and that labour market policies in all countries are under inexorable pressure to shift in a neoliberal direction (Q2). Haddow and Klassen draw on the historical institutionalist current within the comparative political economy literature to generate hypothetical responses to their questions. Following Kitschelt, they predict that political ideology will matter most in the provinces that combine relatively liberal economies with two competitive parties, polarized along class issues (i.e., it should result in the widest policy swings in B.C., followed by Ontario). Extrapolating from Soskice, they predict that neoliberal restructuring of labour market policy will proceed furthest in the provinces that were already relatively liberal before globalization began to reinforce that orientation (i.e., it should change most in Alberta, followed by B.C. and Ontario). They expect political party to matter least, and change from a relatively “cooperative” model of labour market regulation to be least pronounced, in Quebec.

The authors find that shifts between governing parties do indeed result in larger policy “swings” in British Columbia and Ontario than in Alberta (where the party in government never changes) and Quebec (where the major difference between the PQ and the Parti libéral is their stance on federalism, not their position on the best form of market regulation). However, on the question of longer term policy trajectory, the pattern that emerges in Alberta and Quebec is contrary to their expectations. Except for extensive cutbacks in welfare payments and the new “workfare” conditionality, there is no intensification of the liberal orientation of Alberta’s labour market policy in the 1990s. Conversely, in Quebec, the authors find Charest’s Liberal government pursuing more neoliberal retrenchment than they had anticipated. (This result is presumably reinforced by the growing voter support for the Action démocratique du Québec party since 2004.)

In their concluding reflections, the authors offer a number of possible reasons for these differences between predicated and actual results with respect to the degree of neoliberal retrenchment. These suggestions – most importantly, paying more attention to the balance of economic and political power between organized labour and business – are well taken. This power balance is a critical determinant of changes in labour market policy, and to changes in what constant policies actually mean on the ground. This is no small demand, however: a systematic exploration of this sort would require much more attention to the goals, strategies and power resources of labour and business organizations in their interactions with political parties, effectively decentering the book’s current focus on policy reforms.

The book would also have been better if the authors had more fully specified the conception of economic globalization they employ. This would require a more detailed discussion and defense of their decision to limit their examination of globalization’s impacts to whatever they might be after 1990. This is much too late. Neoliberal globalization begins with the end of the Bretton Woods system of fixed exchange rates in 1974. It is deepened by the structural adjustment programs (SAPs) of the 1980s, imposed by the International Monetary Fund and the World Bank in much of the global South in the wake of the Third World debt crisis (which began in 1982). The neoliberal trade agreements of the late 1980s (CUSFTA) and early 1990s (NAFTA, WTO) then lock in reforms introduced in the 1980s via SAPs in the global South and by governments committed to the neoliberal model of economic regulation (including Reagan, Mulroney, and Thatcher) in the global North. Thus, we should begin looking for the impacts of neoliberal globalization from the mid-1970s.

If we take the three post-war decades ending in 1975 as our baseline, and start measuring change from there, we arrive at a very different sense of the trajectory of labour market policy reform. Consider, for example, industrial relations. Up to the mid-1970s, the trend in this period is the extension of worker rights, and a corresponding growth of union density and labour movement power, even in the most conservative Canadian jurisdictions. From that point forward, there are (from labour’s standpoint) momentary advances in labour laws, but the overall trajectory is erosion. It should also be noted that the erosion of worker rights and union power – as measured by labour market outcomes (e.g., collective bargaining outcomes, the efficacy of strikes) – is much greater than it might appear if we focus solely on legislative change. (The US case is the best illustration of this point: there has been no legal reform to the National Labor Relations Act since 1959, but workers’ freedom of association rights are protected much less effectively in the US today than they were in the 1960s.)

By looking at such a short time slice, and by focusing exclusively on amendments to labour laws (in the industrial relations component of their discussion), Haddow and Klassen find plenty of fluctuation but little net change in the legal rights and powers of workers and their unions in the fifteen years that they examine. The implication is that globalization can’t be exerting much downward pressure on these policies. But if globalization began fifteen years before the authors begin looking for its impact, this assessment is clearly problematic … unless globalization had little or nothing to do with the erosion of worker rights and union power that began in the late 1970s.

How would we know whether this is so? For that matter, how would we know whether globalization had anything to do with policy changes over the last fifteen years? To answer these questions, we need to establish causality. Pointing to a coincidence between the onset of globalization – whenever we think it begins – and policy changes does not do this. We need to specify the causal pathways by which economic globalization (however defined) is thought to induce changes in such policies. We can then determine whether changes in the intermediate variables specified by our causal model occured, and if they did, whether they occurred because of the specified aspect of globalization.

For example, one important aspect of globalization is increased international capital mobility. Suppose our model stipulates that the main mechanism by which an increase in capital mobility affects labour market policy is by inducing governments to compete more intensely for private investment. In that case, we should look at data on trends in capital investment in the relevant sectors, and for evidence that the government was responding to the demands for these policy changes made by actual or prospective investors. In reality, economic globalization is a complex phenomenon, connected by multiple pathways to government policy, but the authors never specify a causal model, simple or complex.

In sum, Haddow and Klassen do not provide a satisfactory answer to the second, very important question that they pose. Such an answer requires a much longer time horizon (at least 30 years instead of 15) and a causal analysis that focuses not just on policy changes, but on intervening economic and power variables, and actual labour market outcomes. Haddow and Klassen acknowledge that their time horizon is too short, but seem largely unaware of this second problem with their analysis. Nonetheless, they provide a systematic and useful analysis of their first question – whether politics still matters – for the 15-year period that they cover and (in the case of industrial relations) the private sector workers that are their exclusive focus. They also provide one important part of what is required for an adequate answer to their second question. For both reasons, their book is well worth reading.