Why Unions Matter

Anti-union sentiment has accelerated since the global crisis of 2008 brought economies to their knees and left public finances in a mess.

Widespread frustration with fragile growth and soaring debt has been channeled towards unions, which are increasingly characterized as an elite, irrelevant, and a drag on the economy.

But consider this: No country has ever achieved widespread prosperity and created a large middle class without strong unions.

Generations of hard-fought union struggles brought Canadians the eight-hour day and the weekend; workplace health and safety legislation and employment standards; income supports for new parents and training for unemployed workers; public pensions and minimum wages; protections for injured workers and equal pay for equal work.

Unions helped organize the extension of these negotiated workplace-based achievements to the whole workforce through legislation.

The international evidence shows unequivocally that where unions are strong they reduce the pay gap between workers and management, men and women, racial minorities and other workers. All over the world unions are a major force in reducing inequality and poverty, and broadening access to basic supports for everyone.

But decades of watering down rules for capital investment and eroding workers’ statutory rights, combined with rapid globalization and technological change, has steadily shifted the balance of power towards employers.

As a result, median wages and incomes of those working full-time full-year are today no further ahead than they were in the late 1970s, taking inflation into account. The economy may have more than doubled since, but many workers without a collective voice have lost ground. Their numbers are rising.

Union density in Canada was 37.6% of the employed workforce in 1981. By 2010 it had fallen to 31.5%.

During that time, a rising share of the gains from economic growth went to higher corporate profits and elite pay-packages. In fact the richest 1% of Canadians took a stunning one-third of all income gains between 1997 and 2007. That compares to 8% in the 1960s.

Today, CEO pay packages swell by double digit increases every year – in good times and bad – even while Canada’s bosses put downward pressure on wages, pensions and benefits.

The future of the middle class is anything but assured, particularly for younger workers and newcomers who work in parts of the economy where unions have made little headway in organizing.

The stakes are huge, the path ahead uncertain.

A wave of corporate consolidation has emerged in the wake of the recession. As bigger corporations gobble up the smaller players and grow in market share and influence with governments, unions are increasingly the only countervailing voice to business interests.

Who else will speak out on behalf of the interests of the little guy, the people who need reliable public pensions and public goods like electricity, well-maintained roads and bridges, clean water, affordable health care and education, and good public transit?

Unions are key to ensuring gains from productivity improvements result in wide-spread prosperity, not just profits. A recent ILO study of 20 OECD countries found that a 1% increase in union density is associated with 1.5% reduction in incidence of low-wage employment.

To write off a strong union presence in Canada is to assure a smaller middle class and worsening inequality.

Ironically, domestic businesses need unions too: they ultimately rely on the rising purchasing power of the many, not the few, to deliver growth and profits.

Healthy and dynamic labour relations contribute to workplace innovation, economic development, and a large and vibrant middle class essential to a healthy democracy.

That’s exactly what’s in jeopardy for the next generation of Canadian workers. And that’s why Canada needs unions, now more than ever.

Bruce Campbell and Armine Yalnizyan are members of the Canadian Centre for Policy Alternatives (http://www.behindthenumbers.ca/2011/10/03/why-unions-matter/)