The Fraser Institute

The Fraser Institute

August 31, 2005 07:00 ET

The Fraser Institute: Media Release; Unbalanced Labour Laws and a Large Public Sector Key Reasons for Canada's High Unionization Rate

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 31, 2005) - A larger public sector and biased labour laws are key reasons for Canada's high unionization rate, which is more than twice that of the United States, according to Explaining Canada's High Unionization Rates, released today by The Fraser Institute.

In 2004, the unionization rate in Canada was 31.8 percent, significantly higher than the United States' 13.8 percent.

According to the authors, differences in labour relations law-the regulations that govern the interactions between employers and their employees and union representatives-have a particularly strong influence on unionization rates.

"The manner in which unions are certified or approved to represent workers collectively is a key explanation for the differences in unionization rates," said Jason Clemens, co-author and the Institute's director of fiscal studies.

For example, the independent research reviewed as part of the study concluded that requiring secret ballot votes to approve or certify a union lowered unionization rates. All 50 U.S. states and 5 of the Canadian provinces require secret ballot votes to certify a union while the remaining 5 provinces (Saskatchewan, Manitoba, Quebec, New Brunswick, and PEI) allow unions to be certified without a secret ballot vote.

The average unionization rate for the five provinces that do not require a secret ballot vote (34.7 percent) is nearly 14 percent higher than that of the provinces that do require mandatory secret ballot voting (30.5 percent).

The second aspect of labour laws seen to influence unionization rates was allowing mandatory dues payments to be part of collective agreements. All Canadian provinces, in one way or another, allow the inclusion of mandatory union dues in collective agreements. This provides unions with a secure source of revenue and the ongoing resources needed to promote collective representation.

Clemens pointed out that the United States, on the other hand, only allows partial mandatory dues payments; U.S. workers covered by collective agreements cannot be required to pay union dues for political and social initiatives that are unrelated to representation under the collective agreement. In addition, 22 U.S. states-the so-called Right-to-Work states-have expanded the U.S. law to prohibit any mandatory dues payment as a condition of employment.

The Right-to-Work states maintain much lower average rates of unionization (8.2 percent), than other states (16.2 percent) and the Canadian total (31.8 percent).

"There are stark differences in unionization rates between not only Canada and the U.S. but also between Right-to-Work and non-RTW states," commented Clemens. "Clearly, the ability of workers to voluntarily choose to financially support union activities has a dramatic impact on unionization rates."

The final area of labour laws reviewed in the study was mandatory union membership clauses; no Canadian jurisdiction prohibits mandatory union membership clauses while all U.S. states prohibit such requirements.

Another key reason for Canada's high unionization rates is our relatively large public sector compared to the United States. Canada's public sector is 25.9 percent larger than the U.S. public sector: 18.0 percent of total employment versus 14.3 percent.

Research shows that the public sectors in both countries have a much higher propensity for unionization. The public sector unionization rate in Canada and the United States is 75.5 percent and 40.7 percent, respectively. In contrast, the private sector unionization rate is 19.0 percent and 8.6 percent, respectively.

"Canada's high unionization rate is largely the result of our unbalanced labour laws and the size of our public sector-two explanations that have generally been ignored. Many Canadians support the notion that our unionization rate is the result of a democratic choice but these other key factors need to be considered," concluded Clemens.

Established in 1974, The Fraser Institute is an independent public policy organization with offices in Vancouver, Calgary, and Toronto. The news release and study are available at www.fraserinstitute.ca.

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