Troy Media – By Amela Karabegovic and Charles Lammam
Now that the Labour Day celebrations are done, we should look beyond the picnics and parades, and reflect on the country’s labour laws and in particular, whether they actually serve the interests of workers. Unfortunately, such legislation restricts worker choice and gives disproportionate power to unions.
That’s certainly not an anti-union statement; we believe workers should have the freedom to organize and be represented by a union. But the problem with many provincial and federal labour laws in Canada is that the playing field is often tilted in favour of unions at the expense of ordinary workers. As a result, the rate of unionization in Canada is higher than it otherwise would be. And the implications are significant: studies show that increased unionization hinders the growth of employment opportunities, investment, and productivity.
Need for more balanced labour laws
Enacting more balanced labour laws would not only expand worker choice but also lead to a stronger labour market and economy; all things that would truly benefit workers.
One important way to make Canada’s labour laws more balanced is through “worker choice” laws. Such laws allow workers to choose whether they want to join and financially support a union. Yet current federal and provincial labour laws permit mandatory union membership and dues payment clauses in collective agreements, meaning workers that join unionized firms can be forced to become union members and provide financial support as a condition of employment.
By contrast, federal legislation in the United States makes it illegal to require union membership as a condition of employment. Workers can also opt-out of union dues that are not related to representation. So, if unions financially support political parties, workers can have their union dues reduced proportionately. Twenty-two U.S. states have expanded on federal legislation to allow workers to opt-out entirely of union dues through the adoption of worker choice laws.
It turns out that when workers are given a choice with respect to union membership and dues payment, they choose unions less often. In 2010, the unionization rate in U.S. states with worker choice laws (8 per cent) was about half that of states without such laws (15.8 per cent) and almost one quarter of the Canadian national rate (31.5 per cent).
Research on worker choice laws suggests Canada has much to gain from adopting them. Richard Vedder, a professor at Ohio University, has found that worker choice states have higher rates of labour force participation, lower unemployment rates, greater investment, and higher rates of economic growth.
Other studies buttress these findings, including research by Paul Kersey who found that, between 2001 and 2006, state economies that enacted worker choice laws grew by an average of 3.4 per cent compared to 2.6 per cent for those that hadn’t. In addition, jobs grew by 1.2 per cent annually in worker choice states compared to 0.6 per cent for the others.
While worker choice laws would provide real economic stimulus in Canada, other reforms are also needed to bring balance to Canadian labour laws. Among them is instituting secret ballot voting for union certification in all provinces.
Currently, four provinces (Manitoba, Quebec, New Brunswick, and Prince Edward Island) and federal law (applicable to federally regulated industries such as transportation and banking) allow unions to be certified automatically – without a secret ballot vote – if, for example, a union gets a certain percentage of workers to sign union membership cards.
Automatic certification gives unions an undue advantage over individual workers since workers can be pressured by co-workers or union representatives to sign a union card or petition. Requiring a secret ballot vote reduces those pressures and allows workers to make their decision anonymously. Like worker choice laws, research shows that secret ballot voting results in workers choosing unions less frequently.
Secret ballots reduce union participation rates
UBC professor Chris Riddell investigated British Columbia’s experience with secret ballot voting between 1978 and 1998, a period when secret ballot voting was introduced, eliminated, and reintroduced. He found that union success rates fell dramatically after mandatory secret ballot voting was introduced. Similarly, Professor Sara Slinn of Queen’s University found a decline in the likelihood of certification in Ontario’s construction sector after secret ballot voting was introduced in 1995. Susan Johnson’s 2002 examination of the differences in unionization rates among Canadian provinces found the same: secret ballot voting reduces union certification success rates.
After all the Labour Day picnics and parades, let’s really celebrate workers by giving them more choice. Reforming biased labour laws would be a well-deserved gift for all hard-working Canadians.
Amela Karabegovic and Charles Lammam are economists at the Fraser Institute.