Unions Matter
Apr 02, 2013
The Canadian Foundation for Labour Rights has just released a paper entitled Unions Matter: How the Ability of Labour Unions to Reduce Income Inequality and Influence Public Policy Has Been Affected by Regressive Labour Laws.
We are all aware of the debate over the last few years around increasing income inequality in Canada and the United States. The paper points out the negative effects that result – higher crime rates, more people in prison, lower educational scores, and lower levels of life expectancy. While economic inequality has in the past been viewed as a matter of social justice, there is much evidence to indicate that it in fact damages economic growth.
As the report’s authors point out, income inequality is not a new phenomenon. It has happened before and it has been successfully addressed and remedied before. In the 1940s and 1950s, income inequality was reduced through government policies that included a progressive taxation system, adequate levels of public spending on education, health and infrastructure, and protective labour and employment standards.
Today, even conservative institutions such as the World Bank and the International Monetary Fund have conceded that higher levels of unionization lead to greater income equality, lower unemployment and inflation, higher productivity and quicker adjustments to economic shocks.
Unfortunately, as the paper makes evident, regressive labour laws over the last 30 years have contributed significantly to declining unionization rates. And during that very same period, income inequality has been steadily rising.
The number of restrictive labour laws enacted in the past three decades in Canada is higher than any other period in the history of labour relations in Canada. As the authors remind us, the federal government has passed 19 pieces of back-to-work legislation during this time, while provincial governments have enacted 69 such pieces. A host of other restrictive laws were passed as well over this period, ones that suspended bargaining rights, restricted the certification process, denied the rights of workers to join a union, or restricted the scope of bargaining and other activities of unions.
Not surprisingly, the paper finds that higher rates of unionization are associated with lower income inequality. Thus, in order to reduce income inequality, the federal and provincial governments should be encouraged to strengthen labour rights.
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