Canadian unionisation and the class-war story

Tell me if you've heard this one before: DIA's blogs are turning into hourly spam. How much organized labour angst can there be?

This seems like half a post. Very unsatisfying.

Union power is always a double-edged sword and, as the dual stories in the US and Canada show, it's not a particularly sharp sword either.

WW points out that union power doesn't yield the kind of gains for working class that the left believe. However, it doesn't lead to the kind of economic stagnation the right believe it does either, as union decline has not lead to economic strength in the US, nor has union empowerment lead to economic malaise in Canada.

This is not to say unions are inconsequential, in either direction. Indeed, here in Canada, I've seen private-sector union overreach hurt productivity and quality, and public-sector union overreach shut down essential services, or make them extremely inefficient. On the flip side, union power for things like education and health care. Indeed, many smart people are drawn to those fields in no small part due to the pay, benefits and job security that come from the negotiating power of those unions (especially in the case of the Ontario Teachers' Union), and the results of that brain gain are notable in the results between the two countries.

What a lazy piece of reporting. Repeat: correlation is not causality.

Canada is largely a resource economy. This is reflected that from 1980 to 2000, the three provinces with the largest drop in income were: British Columbia, Alberta, and Saskatchewan with a drop of 10%. Due to a decline n the resource sector. With the increase in resource prices since 2000 those provinces have experienced a growth of 7% on average, to gain back some of the lost ground.

A better metric would be to look at manufacturing and union heavy Ontario. There median incomes rose 8.1% from 1980 to 2005. I will not commit the same error as you and claim that unions are to take credit. for this.

Interesting data but I'm curious to see something more detailed. Excluding benefits from income calculations may throw this off a bit, some American workers undoubtedly receive higher pay than they would otherwise so they can buy health insurance off private markets for instance. The value of Canadian universal health care has undoubtedly increased over those decades.

I'd also add that from living in Canada a minor scandal that popped up now and then was that the government gave very heavy handouts to some small communities that couldn't otherwise survive (as well as larger equalization payments to poorer provinces) so this is probably keeping some people in areas with depressed wages that would otherwise leave.

All that said, I have absolutely no idea how large these impacts would be for actually assessing overall median compensation (I'm also curious about dependency ratios, as always). It certainly does point out an area worth digging into more.

I dont know colm5, detroit looks pretty fing stagnated to me.

You omit to tell us how the overall income distribution in Canada compares to that in the US. That seems strange. Are they back to 1928 ?

It's natural that Canadian worker fortunes would follow those of the U.S. worker, given the extreme interconnectedness of their industrial complex.

Show me what's happened to German, Australian and Japanese middle swath wages since 1980 and we might learn something from this exercise.

Unions are just too weak to play a deciding role in the macroeconomic system. I think there is more fertile prospect in looking at the percentage of profits accruing to the financial sector and how that tracks with wages. My theory is that unionized labor is following the fortunes of nonfinancial industries in general--automation, thinner margins, and more of the spoils of production being skimmed by the money traders before they ever reach the rest of the economy. Tech and healthcare might be the two exceptions, but I suspect only the owners/financiers and the highest level managers/innovators have been gaining ground in those arenas.

The increase in union membership over that time is very likely connected to NAFTA.

Once there were no trade barriers, American manufacturers, particularly auto manufacturers, liked workers that seemed virtually identical to Americans but came with pre-paid health care and worked for 65 cents on the dollar. Therefore, there would have been an explosion of unionized jobs.

The effect on median wages over time is obviously a more complicated affair. There would be all sorts of changes to various sectors over this time period including the resource sector, agricultural sector, manufacturing and services. I'm not sure if the union figures do much to explain the overall picture.

We have our own Michael Moore? Awesome.

I love her use of statistics: "In the 1950s and 1960s, for instance, the real median family income in Canada was growing fast enough to double every 20 years."

Umm, that's not every 20 years, that's just 20 years. You can't poach an up-cycle period of high growth and extrapolate it as if it should continue forever.

Her main problem is with the soaring incomes of CEO's and the like. The solution to that is easy. If everyone incorporates and declares themselves to be CEO, the average CEO income will come down to earth.

Okay, WW, then you're on the bubble.

How do we repair the vertiginous loss of the middle class?

I'm happy to agree it's not the unions' fault.

Shall we call it the middle class's fault, then, instead?

Just as importantly and taking your perspective on whatever the facts might be, since Canadian union membership has increased so dramatically and, by your account, Canadian incomes haven't swooned worse than US ones, then union membership has no effect.

If unions were the evil distorting things I keep hearing they are, then why didn't Canada get dramatically poorer?

Companiers Like US steel and Vale are at war with Canadian unions.

Compare this with ESSAR Steel that has a long term goal. That goal is to be in buisness in 10 years.
The logical conclusion is that the smaller family owned buisness that deals with a union treats them like a child and looks for ways to guide and grow the buisness.

Companies like US steel and Vale never were intersted in growing a buisness but rather making as much money as possible before they walk away.

There is something to be said about working with your employees. If your honest and treat them fairly they will work hard in an union enviroment. And a union wage atracts the best most productive people.

Vale can't even pay their bills on time and hire qualified employees, while Essar attracts the best and brightest by offering a future.