The importance of unions.
Research by Centre for Future Work
Dear Members,
Here is an update on recent research from the Centre for Future Work.
The Importance of Unions in Winning Racial Wage Equality: The most recent report from our ongoing PowerShare project was published in early August. The report analyzes new Statistics Canada data on union coverage and wages across different racialized categories of Canadian workers. It also contains a review of efforts by Canadian unions to improve their representation of Black and racialized workers, and recommendations for strengthening the union movement’s practices.
Please see the full report, The Importance of Unions in Reducing Racial Inequality: New Data and Best Practices, by Winnie Ng, Salmaan Khan, and Jim Stanford.
The report generated considerable media attention, including this story by Rosa Saba of Canadian Press, which appeared in hundreds of newspapers and other platforms, and ably summarized the main findings of the report. See also this CTV television interview with co-author Jim Stanford and Leslie McCurdy (chair of the Black Council of Windsor-Essex).
A one-hour webinar with the three co-authors, chaired by Larry Rousseau (Executive Vice-President of the Canadian Labour Congress) reviewed the report’s main findings and recommendations; a full recording is viewable here. Stand by for a companion report this autumn from the Centre providing similar analysis of Statistics Canada’s separate data on unionization and wage inequality for indigenous workers.
Capital Gains Tax Reform: The federal government has proposed to reform capital gains taxation, by increasing the inclusion rate for large capital gains for individuals, and all capital gains for corporations. The reform has elicited loud opposition from financial investors and advisors, other business groups, and Conservatives. That’s more than twice as fast as the growth in consumer prices (2.5%) in the same time. That means that real wages (adjusted for purchasing power) are now growing significantly – repairing the damage done by initial post-pandemic inflation, and restoring the pre-2020 trend of gradually increasing real wages.
However, contrary to claims the reform will be a ‘job-killer’ and hurt the ‘middle class’, new research from the Centre for Future Work (co-published with l’Institut de recherche et d’informations socioéconomiques, IRIS, in Québec) shows the existing capital gains loophole is incredibly expensive, concentrated in sectors that create no new jobs, and overwhelmingly delivered to the richest households in Canada. Most capital gains are received by the richest 1.5% of Canadian households, and by corporations in sectors (like financial intermediation and real estate) that focus on buying and re-selling assets – not production, innovation, and jobs.
Please see the full report, Fact and Fiction on Capital Gains Taxation: A Chartbook, by Jim Stanford. This report also generated widespread media coverage, including this report by Nojoud al Mallees that appeared in dozens of newspapers and other platforms.
Price Regulations Could Help Prevent a Future Outbreak of Inflation: As economies around the world grappled with inflation after the pandemic, one idea spurred both interest and controversy. The traditional medicine for inflation is to forcibly slow the whole economy with high interest rates. But that further punishes the victims of the profit-led price hikes that started this inflation. Could government instead use pre-emptive price caps on strategic commodities to prevent initial shocks from spreading into economy-wide inflation?
The idea has been debated by many economists. It has received added profile thanks to the surging Presidential campaign of Kamala Harris—who included a pledge to implement nation-wide laws against unfair price-gouging (including on groceries) in her economic platform. In a column (originally published in the Toronto Star), Centre for Future Work Director Jim Stanford argues the idea has both economic and political merit.
In fact, price regulations are already in effect in many Canadian industries (including utilities, pharmaceuticals, rents, public services, and child care), and have already played an important role restraining recent inflation. Price regulations should be used more pro-actively in response to potential future supply shocks (from war, climate disaster, or disease). Please see Jim’s commentary, Regulating Prices Not Such a Crazy Idea.
Wages are Growing Faster than Prices—And That’s Good! The latest economic data from Statistics Canada confirms that wage growth in Canada is continuing at a strong pace, despite the dampening effects of high interest rates and rising unemployment. In the 12 months to July 2024, average hourly wages (measured by the Labour Force Survey) grew 5.2%. That’s more than twice as fast as the growth in consumer prices (2.5%) in the same time.
Strong wage growth reflects efforts by workers to make up for past inflation, and to win back a share of record profits companies captured during the initial years of the pandemic. In this effort, workers are buttressed by labour market institutions—like higher minimum wages in most provinces (although not Alberta), and free collective bargaining (although not for railway workers).
Conservative leader Pierre Poilievre recently posted a misleading chart with outdated and mis-labelled information on the comparison between wages and prices. In a commentary for rabble.ca, Centre for Future Work Director Jim Stanford re-created Mr. Poilievre’s chart with more recent data, and listed several other mathematical and economic errors in the original post. Please see the complete commentary, Lies, Damned Lies, and Conservative Charts.
These are just some of the projects we have been progressing at the Centre for Future Work. Please visit our website or follow our ‘X’ feed for further updates. I welcome your comments and ideas. And thank you again for your interest and support for a fairer world of work in Canada!
In Solidarity,
Jim Stanford
Economist and Director
Centre for Future Work
Vancouver, B.C. Canada