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The State of Canadian Unions—Down but Not Out

January 31, 2013
Karla Thorpe

Leadership and Human Resources Research

Employees who are covered by a collective agreement or a union contract earn higher wages than employees who are not. In 2012, the average hourly wage for unionized employees was $27.36, compared to $22.25 for non-unionized employees. However, after adjusting for variances by occupation, education, and experience, the union wage premium has declined in recent decades to less than 8 per cent—nonetheless, a clear benefit still flows to unionized workers.

Union coverage in Canada, 1997 to 2011Despite this advantage, the proportion of workers covered by a collective agreement has been slowly trending downward in Canada over the last twenty years. Union coverage now sits at 31 per cent, down from close to 34 per cent in 1997.

In order for union membership to grow, the labour movement must find a way to make strides in organizing some industries that have traditionally remained elusive—such as the services, agriculture, and financial sectors. And, as business continues to boom in the resources sector, companies in the mining and oil and gas sector may present opportunities to expand.

The first bold step taken by the labour movement has been the merger of the Canadian Auto Workers (CAW) and the Communications, Energy and Paperworkers Union of Canada (CEP). The merged entity will be Canada’s largest private-sector union, representing roughly 300,000 workers right out of the gate. The new conglomerate will not only have more clout thanks to its larger size, but will be better able to focus its resources to support organizing efforts. The union leadership plans to grow the union—to about double its current membership—in relatively short order and will devote 10 per cent of its revenue to these activities. Membership may be expanded to include students, retirees, and the unemployed, demonstrating its commitment to move beyond the limits of the traditional union model. The impact could be significant.

Unions know they need to adapt to the new realities of the Canadian landscape—the economy will grow only slowly over the medium term, technological change will continue at a rapid pace and international competition will intensify. This will make gains at the bargaining table increasingly difficult. In the public sector, concessions are likely as governments grapple with budget deficits and growing levels of debt. In response, unions will need to be creative in growing their membership base to secure their social and political power but also their financial future. So, while unions may be down, don’t count them out quite yet.

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