President's Commentary: Research affirms critical role of unions in reducing income inequality

We will be doing a disservice to our collective goal of achieving greater equality if all Canadians don't mount a spirited and vigorous offence in support of labour rights and unions.


Ottawa (18 December 2012) – Unions and unionization are critical factors in advancing democracy within nations, creating greater economic equality and promoting the social well-being of all citizens.

Yet, in Canada, labour rights are under intense assault. Egged on by powerful corporate interests, the Harper government and several provincial governments are determined to weaken labour rights and the labour movement's ability to lead and help shape public policy.

Let me just briefly touch on some of the research which affirms the critical role labour rights play in advancing greater income equality.

In the past decade, there have been many social science studies which have established a strong link between declining union density and rising income inequality. In May of this year, a study by five Univerity of British Columbia economists attributed 15 per cent of Canada’s growth in inequality during the 1980s and ’90s to declining unionization.

Union density in Canada rose from 28.4 per cent in 1951 to 41.8 per cent in 1984. During the same period, income growth was shared proportionally across all income groups. Research by the National Union of Public and General Employees (NUPGE) shows that this coincided with a major expansion of labour law.

Income inequality has grown steadily over the past three decades. NUPGE research has correlated this rising income inequality with the major erosion of labour rights over the same period. Between 1982 and 2012, there have been 206 labour laws passed in Canada. Of those 206 laws, 199 have restricted, suspended or denied the organizing and collective bargaining rights of Canadian workers.

This dramatic drop in union density and diminishment of Canada's labour laws has had profound implications for Canadian society. As Canadian labour law scholar Michael Lynk has pointed out, this should concern all Canadians. “Labour and employment rights and the laws that buttress them are not the accumulation of privileges by a vigorous lobby of special interests, but the expression of core constitutional and human rights that benefit, directly and indirectly, the majority of citizens living in a modern democratic society.”

Even the notoriously conservative World Bank has noted the positive role unions have on national economies. In a 2003 report which was based on more than a thousand studies of the effects of unions on the performance of national economies, the World Bank found that “high rates of unionization lead to greater income equality, lower unemployment and inflation, higher productivity, and speedier adjustments to economic shocks.”

More recently, a major 2008 International Labour Organization (ILO) study found the countries in which income inequality was lower tended to be those in which a greater proportion of workers were members of unions. The study also found that higher rates of union density had a positive impact on the range of social rights afforded to citizens. The report states, “The countries in which union density rates are higher are also the ones in which the welfare state is more developed, taxation levels higher and more progressive, collective bargaining more centralized and labour law both closer to international labour standards and better implemented.”

Social scientists have consistently shown that unions also play a significant political role in the distribution of incomes. Two American political scientists, Jacob Hacker and Paul Pierson, in their recent book, Winner-Take-All Politics show how strong unions are consistently associated with low levels of inequality and more generous social programs. As they point out, “On the one hand, they push policy makers to address issues of mounting inequality. On the other, they recognize, highlight and effectively resist policy changes that further inequality.”

This and other social science-based research should provide us with the arguments and the confidence to engage in a national conversation about the valuable role unions play in society. There's no doubt that strong labour rights are a critical factor in countering the increasing corporate power which has been the root of much of the income inequality Canadians face today.

We will be doing a disservice to our collective goal of achieving greater equality if all Canadians don't mount a spirited offence in support of labour rights and unions.

We need to vigorously promote and advance labour rights, not just to protect unions, but to ensure that labour rights continue to be an effective democratic counterweight to the growing power of corporations and the super wealthy.

We must ensure there's a public discussion in Canada about the role of unions in promoting higher levels of economic equality for all citizens. We should not shy away from asserting the critical role unions play in making societies more democratic, equal and just.

In solidarity,

James Clancy
National President


James Clancy is the National President of the National Union of Public and General Employees (NUPGE), one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE