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economy lab

It's Labour Day, so it's as good a day as any to reflect upon the recent trends in the labour movement in Canada, and to speculate upon what they mean for its future.

Firstly, there's the long-run trend in declining union density rates. The share of workers who were union members grew steadily until 1982, when it attained a peak of 38.6 per cent. By 2010, this share had declined to 27.5 per cent. But the more important trend is perhaps the increasing extent to which the union movement has been concentrated in the public sector.

In 1997 – the first year in which Statistics Canada's Labour Force Survey began asking such questions about union membership – 16.7 per cent of those who worked in the private sector were unionised; this rate had fallen to 14.1 per cent in 2010. And if we look at Canada outside Quebec – where the union movement is particularly strong – the decline is from 14.9 per cent to 12.2 per cent. (The US private-sector union density in 2010 was 6.9 per cent.) In contrast, 75 per cent of public-sector workers were unionised in 2010, a rate almost unchanged from the 74.6 per cent rate observed in 1997.

The decline in private sector union densities coupled with the relative stability of public sector union densities has led to an important shift in the structure of union membership: most union members now work in the public sector, even in Quebec. And this trend shows no sign of slowing.

The implications of this shift are profound. A traditional goal of private-sector unions is to increase labour's share of income, at the expense of the share of income that goes to capitalists. But this model translates badly to the public sector, to the extent that that the role of 'management' is played by the government, and the role of 'capitalists' is played by taxpayers. Put bluntly, an important objective of public-sector unions is to transfer income from those who don't work for the government to those who do. (Full disclosure: I am a member of a public-sector union.)

The objectives of public-sector unions are at best uncorrelated with those of their private-sector counterparts. Transforming these two disparate agendas into a common front is going to become a progressively thorny problem as time goes on.



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