Canada Shows the Power of Unions


Jim Stanford  Jim Stanford is an economist with Unifor.

December 4, 2013

The dream of a decent, “middle class” life still exerts a powerful influence in North American culture. But we often forget that the middle class is actually a relatively recent creation. It was largely a result of working people organizing to win a decent share of prosperity, especially through unionization and collective bargaining.

A major reason for Canada’s greater income equality is that unions represent 31 percent of its workers, compared to 12 percent in the U.S.

There is an inherent asymmetry between employers and workers. Without institutional structures to strengthen workers’ position, workers get enough to survive, while owners, investors and a few professionals pocket the lion’s share of economic growth.

Auto factory wages and working conditions were traditionally poor. Unionization and collective bargaining improved incomes and security, so workers could afford home ownership, a comfortable retirement and college tuition for their kids. In other industries, too, lousy jobs became middle-class jobs, thanks largely to unions.

Many assume that a restaurant job is inherently a poverty-level job. But collective bargaining could help restaurant workers improve wages and working conditions and attain a better life.

Income distribution is far more equal in Canada than in the United States, despite the similarity of their economies. That’s largely because unions represent 31 percent of workers in Canada, compared to 12 percent in the United States. (The minimum wage is Canada is generally around $10 an hour.) Prosperity is shared more broadly.

Higher unionization in Canada is the culmination of many small differences in labor law. In most jurisdictions, unions can be certified when a clear majority of workers sign union cards. There are stronger protections against being fired for union activity (including organizing drives and strikes). Union dues are usually deducted at source by the employer and forwarded to the union. Contracts can be settled by arbitration for new bargaining units or in the event of long work stoppages. In some provinces, employers are not permitted to hire replacement workers during strikes. All of this means that Canadian workers have a better chance to form a union and negotiate a fair deal with their employers.

To be sure, unions are under pressure in Canada (as in the United States) from globalization and hostile employers, and the erosion of unionization would undermine Canada’s social equality. But the positive impact of collective bargaining on equality and social inclusion is still evident.

The collective action of restaurant workers brought public attention to their low pay and insecurity. By formalizing that collective power they could turn their lousy jobs into decent ones.


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