The potential for labour market regulation to address income inequality does not end with the Temporary Foreign Workers Program, or the federal government.
Workers in low wage jobs are no longer able to unionize at the same rates as earlier generations, as evidenced by decreasing union density rates in the private sector. The history of Canadian manufacturing and mining sectors includes employees unionizing to improve poorly paid and dangerous jobs. Over time, unionized employees in these industries were able to increase their wages and benefits, and achieve fairness at work, and safety on the job. The data shows that workers in unionized workplaces are able to negotiate higher wages than non-unionized workers. Further, the gap between lower paid employees and higher paid employees is smaller for unionized workers. Higher levels of unionization also have an important spill over effect, increasing wages in non-union workplaces. Increased inequality and decreased levels of unionization have been correlated in many countries –including Canada.
Employment standards establish a minimum floor so that workers with the least ability to negotiate fair wages and working conditions are protected from having to endure working conditions that we collectively determine are unacceptable. Because fewer private-sector employees have the protection of unions, employment standards legislation has an increasingly important role. There is evidence of widespread violations of current legislation. These include workers being paid less than the minimum wage, unpaid wages, uncompensated overtime, and late payment of wages. Recent immigrants and racialized workers are more likely to be subjected to these violations. These widespread violations tell us that we need more effective enforcement.
However, the problems with employment standards legislation don’t end with enforcement. The legislation should be modernized to protect workers more effectively. Minimum standards laws are full of exceptions and qualifications which effectively permit many employers not to apply the law. And in many cases, authorize employers to make “agreements” with their employees for exemptions from the law. Most non union workers are not in an equal bargaining position with their employer. In these circumstances, an “agreement” between a worker and an employer is more likely to be a deal which favours the employer.
Legislation governing labour relations and employment standards in Canada was written in and for an era of large workplaces (like those of the mining and manufacturing industries) where most employees worked full time in the same location and commonly spent their entire working lives with the same employer. Workplaces have changed. Today, employees are more likely to work in the service sector, in smaller workplaces, and have shorter job tenure. Employees may be geographically disparate in a number of different locations, they may not report to the traditional workplace on a regular basis like one would in an office or a factory. Often working two or three jobs, employees are less likely to know each other and may not be proficient in a common language. There has also been a change in structure of employment relationships. Production of services and goods that used to be integrated into one employer is now provided by contract services providers. This change in structure has a profound impact on the effectiveness of labour legislation in protecting workers.
Labour legislation has not kept up with these changes in the labour market either. In current labour relations legislation, the basic building block of a union is a single workplace with a single geographic location. That is a building block that better describes General Motors than it does Wal-Mart or McDonald’s, making it much harder for this generation of employees to exercise their rights. Labour laws must be changed so that the structural and other changes in workplaces are not barriers to organizing. Labour laws acknowledge and protect the right of workers to form and join unions. The laws need to be updated so that in today’s workplaces, workers can meaningfully exercise those rights. These changes in the labour market, along with changes in government policies and decisions that have shifted power from employees to employers, have contributed to falling union density in the private sector. However, decreasing union density cannot be solely laid at the feet of changing employment patterns, outdated legislation and government policies. Unions have had difficulty in adapting their structures and organizing activities to changed labour market conditions. Efforts to address these difficulties are ongoing; one of the most recent is the CAW CEP discussions and document.
The share of unionized employees in the private sector has dropped, from 21 percent in 1997 to 17percent in 2011. In 2011, union density in the goods producing sector was almost twice as high as l in private-sector services. However, the service sector accounted for a much larger share of total employment — 78 percent of total employees in Canada as compared with the goods producing sector’s 22 percent.
This generation should have the same protections and opportunities to improve their working lives as previous generations. To make this a reality, labour laws need to be updated. These are complex issues, and complex pieces of legislation. But, concrete steps can be taken. Some of these will be outlined in a future contribution to this series by Mary Gellatly.
Making progress on these issues does not require a wholesale rewriting of the legislation. There are smaller steps that could be taken to reduce inequality. For example, labour relations acts across Canada protect the collective bargaining rights of employees when a business is sold or transferred. If a unionized business is sold in the manufacturing sector, workers are able to keep their union and their contract. However, if the same business uses contract cleaners and the current contractor is replaced with new contractor; those cleaners are not able to keep their union and their contract.
Employees in contract services sector are some of the most marginalized workers and low paid workers. They are more likely to be racialized Canadians and new immigrants. Employees in this sector who unionize have already overcome enormous hurdles. When they achieve a collective agreement that offers even modest improvements in wages and working conditions, it can make a profound difference. The loopholes that allow contract service workers to suddenly lose these modest improvements in wages and working conditions, while they are doing the same work, in the same location, is a legislative gap that should be corrected.
In Saskatchewan this protection is extended to workers whose employers have contracts with in the public sector. Adopting and extending this section of the Saskatchewan Act to the private sector across the country would provide unionized workers in the contract services—food services, cleaning and security with the same rights as workers in other sectors of the economy.
Sheila Block is the Director of Economic Analysis at the Wellesley Institute in Toronto.