Union membership a ticket to the upper middle class, says CCPA study

Canadian organized labour got another slap in the face this week when General Motors said it will cut production at its huge plant in Oshawa. That means pink slips for workers and, according to a new study by the Canadian Centre for Policy Alternatives, a further hollowing out of the middle class.

The CCPA study concludes that a reduction of unionized jobs over the past few decades is closely tied to declining private-sector incomes and less upward mobility, or the ability to improve your lot in life.

“We can expect the middle class to shrink and upward mobility to stall, as long as union representation continues to decline,” says economist and study co-author Hugh Mackenzie.

The study, released to coincide with International Workers Day, looks at income and union participation going back 30 years, focusing on where union workers stand on the income spectrum, and how steadily they move higher.

The report shows that the majority of unionized workers in the country occupy the higher levels of income earners, and that the amount of private sector unionized workers has been dropping, from 21 percent in 1997 to 14 percent in 2011, with the bulk of the drop happening in the upper income groups.

It also shows workers with one or more member in a unionized job also fare better than non-unionized families.

And workers who join unions typically experience a sizable increase in income, and that the opposite is true for workers that leave a unionized job for a non-union one.

Throw a economic crisis into the mix, and the differences are starker.

“The findings suggest that there is a huge opportunity cost for workers who lose a unionized position, especially during recessionary periods,” says Mackenzie.

Of course, maybe it’s not rocket science to figure out that people with unionized jobs have a more stable income, and this isn’t the first study to say so. But it does put it in a distinctly Canadian perspective, looking at a broad swath of data.

And of course, the hollowing out of the middle class has been a red-hot issue since the 2008 financial crisis, and subsequent movements such as Occupy Wall Street.

Hassan Yussef, president of the Canadian Labour Congress, says the study reinforces the notion that governments need to enact union-friendly legislation.

“If you really want to grow the middle class in this country, you have to actually make it possible for workers to join unions, because it’s the one way you can help redistribute some of the wealth we’ve been creating in our society,” he says.

Experts point to several reasons why union membership has fallen, including the decline of the manufacturing sector, the impact of free trade, and government austerity programs, among others. And of course employers are always going to want to have more freedom in their hiring and compensation practices.

On the other hand, common sense says a stronger middle class buys more cars and blue jeans, which is just good business.