BC Business Matters:
Jock Finlayson >>
Long-Term Downward Trend in Unionization Rates
The proportion of unionized employees in BC has trended lower since 1983. The trend has persisted through multiple business cycles and several changes in government. In the early 1980s, amid heightened levels of labour strife, the unionization rate increased by five percentage points. But since then it has fallen more or less steadily.
The unionization rate – sometimes called “union density” – is the share of employees in the workforce who belong to a union. Statistics Canada tracks and reports on “union coverage,” which is a similar concept but also includes workers who are not union members but are covered by a collective agreement.
Labour leaders understandably are concerned about the declining share of employed workers who belong to trade unions. To that end, they have been pressing for changes to the provincial Labour Code that would make it easier for unions to certify workplaces. However, the decline in union density is not mainly about public policy. Instead, it reflects a shifting industrial structure, rapid growth in the number of small businesses, changing worker attitudes, and a different labour relations climate than the one that prevailed a few decades ago.
A quick look at the first figure below suggests that the decline in unionization speaks to changing market conditions for the services that unions offer, rather than the effect of modifications to the legislation that establishes the rules around certifying a workplace:
- Unionization across Canada has trended lower for nearly four decades (a period that covers numerous modifications to the BC Labour Code);
- Since 1992, the downward trend in BC has been essentially uninterrupted;
- Changes to the provincial Labour Code do not appear to have had an identifiable impact on unionization rates – the Code was amended in 1992, making it easier for unions to certify workplaces with a card-check system; and it was then changed again, a decade later, returning to a secret ballot vote and a more balanced framework for union certification;
- It is worth noting that union density in BC is now closely aligned with the Canadian rate.
To understand the dynamics and forces affecting unionization, it is important to recognize the differences across sectors. Unionization is much more common in the public sector than in the private sector, not only in Canada but in the United States as well. While coverage has edged lower over the past two decades, approximately 77% of public sector employees in British Columbia are covered by collective agreements. The share has been fairly stable in the past decade.
The picture is very different in the BC private sector: there, union coverage has dropped and now sits at 17%, down from 24% twenty years ago. Of note, the BC private sector has converged to the national benchmark in union density.
Looking at the number of employees covered by collective agreements (rather than the proportion covered) further underscores the difference between the public and private sectors. In the private sector, the number of employees covered by a collective agreement has edged lower over the past two decades even though the total number of employees rose by 36% over the same period. The pattern in the public sector is quite different. As evident in the left panel of the next figure, the number of employees covered by collective agreements in the public and private sectors was essentially the same in 1998. But by 2017, another 65,000 public sector employees were toiling in unionized workplaces across the province. The right panel shows both total employment and the number of workers covered by collective agreements in the public and private sectors, with each series indexed to 100 in 1997.
The table below confirms that, in most industries, union coverage in BC is now similar to the national rate. There are a few exceptions: coverage rates in BC are higher in the forestry, mining and oil and gas industries, as well as in the transportation and warehousing sector. On the other hand, union density in BC’s construction industry is lower than the Canadian figure. That partly reflects the growth and large absolute size of the residential construction industry within the broader construction sector – unions generally have a smaller “market share” in residential construction.
Within the private sector, job creation in the last 20-25 years has been strongly driven by industries that traditionally are difficult to organize and therefore have lower unionization rates. The professional, scientific and technical services industry, for example, has a unionization rate of just 5%, yet the total number of employees in this segment of the BC economy has jumped by 90% since 1997. Similarly, the number of employees in the business, building and support services industry has risen by 73% since 1997; this sector, too, is characterized by a comparatively low unionization rate (around 16%).
The process of industrial change has also impacted unionization. Manufacturing provides the starkest example: total manufacturing employment in BC has dwindled by 20,000 since 1997, amid the spread of automation in the province’s natural resource processing sectors, among other factors. While overall manufacturing employment has decreased by 11%, the number of manufacturing employees who belong to unions slumped by nearly 50% over the same period. The size of the unionized manufacturing workforce has dwindled more quickly than total employment, because jobs have been disappearing in large processing facilities that have invested heavily in capital equipment and automation. At the same time, the number of people employed in smaller non-resource manufacturing businesses has expanded. This segment of the overall manufacturing sector is harder for unions to organize – not only in BC, but in many other jurisdictions as well.
With the number of employees climbing by almost 108% in the last two decades, BC’s construction industry has experienced robust growth. The ranks of unionized construction workers have also increased, but at a more subdued pace (38%). As a result, union coverage in construction as a whole has diminished from 31% to 21%.
All industries have seen the share of the unionized workers trend lower, albeit to varying degrees. In each case, the decline has been gradual. As with overall unionization rates, in no instance is there evidence of large increases or decreases in union density in a specific industry in the wake of changes to the BC Labour Code, including after the overhauls to the Code in 1992 and 2002. Importantly, union density rates in almost every BC industry have converged to the Canadian averages over time, suggesting that larger market forces – including changes in technology and in industrial structure – are the dominant factors at play. The steady growth of employment in many service-producing industries and in the small business sector arguably is the key reason behind the longer-term downward trend in private sector union density in the province.
Finally, it should be noted that the long-term decline in unionization rates is also evident in most advanced economies. The figure below shows the union coverage (the share of employees with the right to bargain) across the countries that are members of the Organization for Economic Cooperation and Development (OECD). The basic trend mirrors what has occurred in BC (and Canada) – providing further confirmation that market forces, a shifting industrial structure and changes in employee preferences and in the nature of work are the principal factors behind lower rates of unionization.
 For example, some workers who are covered by collective agreements do not actually belong to unions for religious reasons.