The Conference Board of Canada recently reported that, since the mid-1990s, income inequality has increased faster in Canada than in the United States and most other comparable countries. The board observes that forces such as “declines in unionization rates, stagnating minimum wage rates, deregulation, and national policies that favour the wealthy” are responsible for increasing inequality.
All Canadians should be concerned about this trend. Says the Canadian Centre for policy Alternatives (CCPA): “The international evidence shows unequivocally that where unions are strong they reduce the pay gap” and act as a “major force in reducing inequality and poverty, and broadening access to basic supports for everyone.”An International Labor Organization study shows that higher union densities are associated with less low-wage employment. A study by the Organization for Economic Cooperation and Development produced similar findings, while the World Bank also found that unions reduce income inequality.
But the most dramatic evidence is from the U.S., where longstanding attacks on the labour movement and the remnants of the welfare state have recently redoubled. A recently published study shows that “the decline of organized labor explains a fifth to a third of the growth in [American] inequality”. The latest U.S. census data, coupled with an historical analysis showing declining union membership coinciding with middle-income earners’ decreasing share of aggregate income, demonstrate just how relevant unions remain.
An ILO report, moreover, points to the importance of the other redistributive mechanisms that unions fought for. A CCPA publication reminds us it was unions that fought for 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 and ensured these achievements were extended to the whole workforce through legislation.
A shout-out to the CCPA and the Canadian Labour Congress Trade Union Research Collective for identifying relevant research on this topic.