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Leaders Serious About Tackling Low-Wage Work Should Embrace Unions

Enshrining the power to organize is a sure way to reverse the trend of shrinking paycheques.

With little more than a month to go before the next federal election, party leaders have proposed a laundry list of measures (here and here) to deal with Canada’s growing low-waged workforce.

Following changes to the Canada Labour Code, the Liberals continue to mull a guaranteed national minimum income. Short on details, the Conservatives have vowed to improve credential recognition for new immigrants to help them get jobs. Both the NDP and Green parties have promised to raise the federal minimum wage to $15 an hour, among other guaranteed worker benefits.

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While each of these proposals have their merits, none of them really get to the meat of the matter, which is that wages are inextricably tied to union density. Canada’s descent into a low-wage workforce is a result of the erosion of collective bargaining coverage as a proportion of total employment.

Canada failed to crack the top 20 countries when it comes to the rate of collective bargaining coverage as a proportion of total employment. For decades, employers have been increasing profit margins by cheapening labour via subcontracting, offshoring, converting full-time jobs to part-time and temporary work, automation, and misclassifying direct employees as independent contractors.

Employers and policymakers, working hand in hand, have rewritten laws and regulations; the result is greater rights for employers and investors, and fewer rights for workers (as countless examples of pension swindles and demands for concessions remind). Finally, employers and their associations have actively worked to weaken labour unions turning ”union avoidance” into a multibillion-dollar international industry.

Unions and worker’s rights

Because unions raise wage and benefit floors, these gains are undoubtedly one of the main reasons why unions have been continually opposed by employers and governments alike. Collective bargaining rights, like out-of-court grievance-arbitration mechanisms that grant workers due process and fair treatment, place limits on the arbitrary power of employers.

“Low-waged work has emerged as a significant political concern.”

Unions also create a presence in local labour markets or sectors — “spillover effects” — that can create pressure to raise wages in surrounding non-unionized workplaces. Aside from the socio-economic advantages to being unionized — higher wages, pensions and benefits, job security, training, transparency and due process — organized labour has a long history of pushing for improvements to Canada’s rarely discussed social wage, or public services and benefits that supplement wages.

Compensation in unionized workplaces tends to be more equitable overall, with relatively higher wages for lower-paid workers and less of a wage gap for women, younger workers and racialized groups. Unionized workers are more likely to be full-time, permanent and to work longer for their employers, and safer.

While the ability of workers’ organizations to influence government decisions pales in comparison to that of employer associations, they have nevertheless fought for and won important gains, bringing to light issues of pay equity, the undervaluation and occupational segregation of women and other groups, changes to human rights legislation and same-sex spousal benefits.

Low-wage work on the rise

With an election around the corner, it is worthwhile to recall that higher rates of unionization are linked to increased democratic participation. And it’s easy to see why: democratic governance at work tends to contribute to a lifelong attachment to democratic politics outside of it. With union density stagnant or shrinking across much of North America and Europe, low-waged work has emerged as a significant political concern.

A recent Statistics Canada report paints a grim picture of Canada’s growing minimum-wage workforce. While the proportion of employees who earned minimum wage in Canada hovered between four and five per cent for the decade preceding the 2008 Great Recession, in the decade since that number has swelled to more than 10 per cent of all workers.

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No matter how you slice it, whether isolating for immigration status, family type, educational attainment or full- and part-time work, all groups have seen the proportion of minimum wage workers as a percentage of total employees nearly double. For men, this rate has grown from just four to 8.5 per cent over the last 20 years, while women have seen this rate increase from 6.4 to more than 12 per cent.

Seniors working for minimum wage have seen the fastest growth, followed by those between 24 and 54 years old. Among the provinces, Ontario leads as the undistinguished epicentre of low-waged work, which grew in virtually every industry sector. While small- and medium sized firms have reduced their low-waged workforces, companies with over 500 employees have doubled down, accounting for 45 per cent of all minimum-wage jobs. Besides lower wages, minimum-wage workers are also less likely to receive non-wage benefits such as a pension, health benefits or paid sick leave.

A 2018 study by the Government of Alberta found that, using $15 per hour or less as a low-wage cutoff, more than 20 per cent of all Canadian workers were low waged. The OECD found that roughly one-fifth of full-time workers in Canada were in low-wage jobs, defined as earning less than two-thirds of the national median hourly wage.

Time to get serious

And here’s the rub: public policies matter. They can extend or ameliorate the most harmful effects of low-wage work and labour market inequality. And, while unions are by no means perfect, they are the best shot workers have at securing long-term, full-time employment with benefits and wages that rise steadily over time. Countries that have “inclusive” labour-market institutions and regulatory mechanisms to extend the wages, benefits, and working conditions negotiated by workers in industries and occupations with strong bargaining power to workers with less bargaining power have far lower levels of low-wage work and much greater levels of income equality.

This includes other important inclusive institutions like living wages, employment-protection legislation and benefit systems for the jobless and low-income households, which also ensure that workers can find jobs with better wages and benefits.

For the last 40 years, parties and policymakers have near singularly emphasized cutting back: whether it’s taxes, public services, “red tape” and other regulations crucial to maintaining a decent quality of life. It is little wonder, then, that a growing number of Canadians feel alienated from the political process. They have seen a steady decline in the quality of their work and lives year after year, while the wages of the wealthy continue their steep climb.

If federal party leaders are serious about addressing the root problems of low-wage work in Canada, improving workers’ rights to organize a union in their workplaces without fear of retribution is as good a place as any to start.

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