Good morning, Mr. Chair.
I thank the members of the committee very much for inviting me to testify. I have provided a lengthy presentation in hard copy, which should subsequently be translated into English and forwarded to committee members.
Following Ms. Bégin's and Ms. Marchand's presentations, I'm going to dispense with re-demonstrating the union movement's impact on improved wages and greater access to various benefits, and instead address the issue of the declining union advantage in wages, which Ms. Marchand and Ms. Bégin have demonstrated. I will briefly explain the reasons for this decline.
Next, I'll look at whether the union advantage comes at the expense of other workers. In fact, I'll show that it's quite the opposite.
Simply put, union presence in Canada has declined from 38% in 1981 to less than 29% in 2022. This may explain some of the decline in the union advantage, and therefore all of what you call “wage disparity”. However, it's more the changing composition of the union membership that may explain this phenomenon.
In fact, when you look at the statistics, since 1997, the biggest drop in unionized jobs has been among men with lower levels of education, so those in jobs that require a high school diploma or post-secondary education. When we really look at the union presence rate, it's among men, private sector jobs and workers with fewer diplomas that the decline in unionization has been greatest. Yet union impact is stronger among this type of workforce. And when you look at the wage differential, it's really in these jobs that unionization makes the biggest difference. By having a lower proportion of members in these sectors, the influence of unionization has been weaker. Examples include construction, manufacturing, natural resources, transportation and utilities.
In parallel to this, we have also seen the arrival of a large number of jobs in sectors which, historically or by their structure, are less inclined to unionization. Take, for example, the finance, software and IT sectors, which offer high salaries and very little union representation.
The other question I want to address is: Does union advantage come at the expense of other employees? The reality is more complex than what we are taught in Economics 101. The impact of unions is not a zero-sum game. In developed countries, union advantage does not come at the expense of non-unionized workers. On the contrary, union action leads to a reduction in social and income inequalities throughout society.
The first reason is highly intuitive. The mere threat of unionization will drive employers to improve the working conditions of their non-unionized employees, in order to discourage them from organizing collectively. The best example of this was recently seen in the USA, when GM and the United Auto Workers (UAW) signed an agreement leading to wage increases of 33%. In the weeks that followed, non-unionized U.S. automakers unilaterally decreed wage increases ranging from 10% to 25% to avoid the UAW coming after their employees.
In studies, we find that the stronger the threat of unionization, the more non-union members see their working conditions approaching those of union members. The stronger the unions, the less the union advantage is statistically visible.
The other way unions improve working conditions for all workers, whether unionized or not, is of course through participation in democratic activities. They can take part in debates, which will put policies in place and bring about greater social justice, as well as a reduction in inequalities. They can also work in coalition with grassroots and feminist groups, or exert pressure politically, including by proposing policies such as higher minimum wages, pay equity laws, better social protection measures or fairer taxation, to name but a few.
The good thing is that studies worldwide also show that this increase in equality and the rise in income for all workers does not come at the expense of economic growth.
After publishing an inventory of all the studies on the subject, the World Bank made a finding that I find disappointing, because neither I—a staunch advocate of unionization—nor the denunciators of unionism can rely on this work to argue for or against unionism.
The results of these studies show that the impact of union presence on economic growth, investment levels, inflation, unemployment and productivity levels is often negligible.
This last element is surprising, because it has been demonstrated that unions contribute to increasing the cost of labour. This increase is offset by other union actions within the company. For example, union presence often promotes efficiency within the company. Indeed, job security for workers facilitates the adoption and adaptation of new technologies. A stable workforce encourages investment in training and development. The presence of unions enables openness in what are now called quality groups—