BUSINESS

Right-To-Work Laws Would Drive Down Ontario Wages: Study

01/29/2014 03:15 EST | Updated 01/29/2014 05:59 EST
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Right-to-work laws in Ontario would reduce wages and make working life worse for everyone, a new report by North America’s largest construction union says.

The group is taking aim at proponents of so-called right-to-work legislation, including Ontario’s Progressive Conservative party and members of the federal Tory caucus who have argued that the laws would create jobs and bolster the economy.

The union’s report paints another picture. Laws that make union dues optional would reduce wages for unionized and non-unionized workers alike, says the paper released Tuesday by LiUNA Local 183, citing research from U.S. right-to-work states. They would also lead to an increase in workplace injuries and an erosion of pensions and benefits, it adds.

Ontario PC leader Tim Hudak has contended that General Motors moved its Camaro production to Michigan because of the state’s right-to-work laws and says Ontario must follow Michigan’s example to prevent the loss of more jobs.

The Fraser Institute, a right-leaning think tank, has argued that right-to-work states have seen more rapid employment growth than those without. But the union’s research questions the quality and pay rate of those jobs — citing 17 per cent lower wages in right-to-work states.

“The Conservative policy would make Ontario the most regressive jurisdiction in North America in terms of its treatment of workers’ rights to improve their working conditions through collective bargaining with their employer,” economist John O’Grady wrote.

Such laws would return Ontario to labour conditions not seen since the 1920s, he added.

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Canadians' Attitudes On Unions (2013)

The report is the latest defensive move by Canadian unions as they raise the alarm about the labour laws that exist in 24 U.S. states. The laws have been gaining traction among Conservative politicians in Canada.

The debate over the legislation is centred on a 1946 legal decision in which Supreme Court Justice Ivan Rand ruled that Canadian workers in unionized workplaces must pay union dues because they benefit from the union’s services, whether or not they choose to join.

Right-to-work laws could overturn that decision, known as the Rand formula. Unions say a reversal of the Rand formula would mean workers could refuse to pay dues, yet still receive the benefits that a union provides in a workplace.

Supporters of the laws argue that the expense of benefit and compensation packages demanded by unions hurts the economy and encourages employers to ship jobs to cheaper jurisdictions where non-unionized workers are willing to work for less. They argue that the laws prevent forced membership in a union as a requirement for employment and point to manufacturing job creation in states that have enacted such laws.

A report from The Fraser Institute argued that right-to-work legislation would create 57,000 jobs and add $11.8 billion to GDP in Ontario, which has seen several big companies close up shop and shift operations to right-to-work states.

O’Grady argues, however, that the gain represents a mere one per cent of the projected workforce 25 years from now.

“Nothing will bring low-skilled and semi-skilled manufacturing jobs back to Ontario. Those jobs have moved and will continue to move to countries that offer labour costs that are a small fraction of Ontario’s costs,” he wrote.

“Promising to bring back those jobs by waving the magic wand of deunionization is deceitful nonsense.”

The union, which represents 40,000 construction workers, worries about the impact of such laws on construction jobs. The industry has been a big driver of the provincial economy, especially in the years since the 2008-2009 Great Recession, when jobs were slashed in auto and manufacturing sectors, traditionally a stalwart of the province’s economy.

In the years since, Ontario has gone from being a “have” province to a “have not” province. And as the economy falters, politicians are scrambling for a solution to stop the bleeding.

Right-to-work laws, the union report warns, could further strain Ontario’s debt-burdened government by reducing unionization rates and the power of unions to push for higher working wages. That will increase the number of working poor and put even more pressure on government programs, they say.

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