November 2001
Unions in British Columbia March into Obscurity
by Jock Finlayson
British Columbia’s Liberal government won a sweeping victory in the May 2001 provincial election on a platform that pledged to bring about significant changes in the province’s labour laws. The new government wasted little time in acting. In July, the cabinet restored open tendering on all government contracts. In doing so, it reversed the policy put in place by the former New Democratic Party (NDP) government, which sought to use public sector procurement to bolster the market power of trade unions by circumscribing the ability of nonunion suppliers to win contracts and obtain work on government funded capital projects. In a closely related move, the Liberal administration also eliminated the NDP’s union-only "hiring hall" requirement for both highway construction projects and government-sponsored forest silviculture contracts. Over time, the just-cited policy initiatives should shave hundreds of millions of dollars from the cost of public sector procurement and construction projects, thereby delivering a benefit to BC’s longsuffering taxpayers.
During the summer 2001 session of the Legislature, the Liberal government passed Bill 18, the Skills Development and Labour Statutes Amendment Act, 2001. Bill 18 heralds an important shift in government policy toward collective bargaining and union organizing. Among the legislation’s various elements, four stand out:
- Restoration of a mandatory secret ballot vote for all union organizing drives under the provincial Labour Code. In 1992, the then NDP government eliminated workers’ democratic right to a secret ballot vote by enshrining in law a "card-based" sign-up system for determining the level of workplace support for union certification. That system simplified the task of union leaders by allowing them to organize workplaces without actually having to go the trouble of showing majority employee support for union certification through a free democratic vote.
- Repeal of the sectoral bargaining provisions of the Labour Code introduced by the previous government in 1998. These provisions had provided for a form of sectoral collective bargaining in parts of the construction industry.
- Repeal of the NDP’s legislation that permitted certain union-controlled pension plans to suspend pensions for early retirees if those individuals chose to continue working in their previous field of employment.
- Designation of education as an "essential service" under the provincial Labour Code, a step that will prevent future strikes and lockouts in the public school system.
All of these measures were explicitly promised by the Liberals during the 2001 election, but vigorously opposed by British Columbia’s always-vocal union leaders. The interesting question is how these changes in the province’s labour law regime will affect the fortunes of trade unions. The irony is that despite the NDP’s efforts to foster the growth of trade unions throughout the 1990s, organized labour has in fact continued to lose ground within the economy (Finlayson, 2001).
According to an update published earlier this year by the B.C. Ministry of Labour, unions now represent just 30.4 percent of total employment in the province (table 1). That is down from 33 percent when the NDP took office in 1991, and well down from more than 40 percent 25 years ago. While hundreds of BC workplaces—mostly small businesses with fewer than 100 workers—were successfully organized by unions between 1992 and 2000, this has had no discernible impact on the aggregate "density ratio," defined as the proportion of all workers (employed plus self-employed) who are members of unions.
Indeed, the data show quite conclusively that unions are a dwindling presence in virtually all parts of the economy that lie outside of the direct control of government (Statistics Canada, 2000). In the private sector as a whole, union members today make up less than 15 percent of employment. In contrast, more than 75 percent of public sector workers hold union cards. As a result of this pattern, unions whose roots lie firmly in the public sector increasingly dominate the labour movement. By 2000, four of the six largest unions in British Columbia mainly represented workers toiling in the broadly defined public sector (table 2): the Canadian Union of Public Employees, the BC Government Employees Union, the BC Teachers’ Federation, and the BC Nurses Union. Moreover, of the 387,000 workers who belong to the province’s 10 biggest unions, well over 60 percent are employed in either public administration or the health care, education, or social service sectors.
Most of the factors contributing to the erosion of union influence are structural in nature—i.e., they are in many ways impervious to government interventions aimed at buttressing unions’ legal rights or facilitating their organizing efforts. The structural forces undermining the market power of unions include the following:
- A continuing gradual shift of employment away from manufacturing and resource extraction, where unions traditionally have been strong, toward industries that produce "services." Three quarters of all jobs in BC are in service industries (BC Stats, 2000).
- The expanding role of small businesses as employers. In BC, upwards of 95 percent of all businesses are classified as “small,” and these firms are responsible for roughly 4 out of 10 paid jobs. Small businesses tend to be far costlier for unions to organize and to service than are larger enterprises.
- Rapid growth of part-time, contract, and self-employment—together, these now account for more than one-third of all jobs in BC. These are areas of the job market where unions have found it difficult to make inroads.
- Privatization of formerly state-owned enterprises and the deregulation of some sectors of the economy where unions are particularly well entrenched (e.g., transportation and utilities). This helps to explain unions’ unremitting hostility to deregulation and their strident opposition to all proposals to widen the scope for private sector provision of services in health care and education.
- Growing global competition and the lowering of barriers to cross-border trade and investment flows. As national economies become more intertwined and more open to external forces, it becomes harder for unions to maintain above-market pay levels. Over time, this weakens what is perhaps the most compelling argument for joining a union in the first place.
Perhaps the biggest challenge facing unions, particularly in North America, stems from the relentless expansion of service jobs, coupled with relatively feeble net job growth in resource industries and much of manufacturing. Most of the industries that are net employment generators are characterized by low union density ratios. Industries in BC in which organized labour wields little influence include business services, finance and insurance, communications, accommodation and food-services, computer services, scientific and technical services, high tech manufacturing, and the pharmaceuticals/biotech sector. All of these industries are growing at above-average rates, suggesting that their importance within the economy will continue to increase.
None of this implies that trade unions are going to disappear. Many unions are accelerating their organizing efforts and exploring innovative ways to add value for their members. At the same time, a substantial number of workers will always seek the collective protection and bargaining clout that can come from belonging to a union. Having said that, with a government in office that is less sympathetic to the union cause, and with the provincial economy and labour market continuing to evolve in line with the structural trends identified above, it would not be surprising to see union density within BC’s private sector fall to as low as 10 percent by the end of the current decade.
References
BC Stats (2000). Employment by Industry
(NAICS), Revised, 1987-1999 (February).
Finlayson, Jock (2001). "The Decline of
Unions in the British Columbia Econ-omy."
Policy Perspectives, Business Council
of BC (June). Available at
www.bcbc.com.
Statistics Canada (2000). "Unionization: An
Update." Perspectives on Labour and
Income. Special 2000 Labour Day Release.
Cat. 75-001-XPE (September).
Jock Finlayson is Vice-President of Policy at the Business Council of British Columbia. He holds a Master’s degree in Management from Yale University and undergraduate and MA degrees from the University of British Columbia.
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