The Effect of Unionization on Employment Growth of Canadian Companies

Abstract

This longitudinal analysis of employment in 510 Canadian firms over the period 1980 to 1985 provides evidence that union firms in both the manufacturing and nonmanufacturing sectors experienced substantially slower employment growth than comparable nonunion firms. Controlling for industry sector, firm size, and firm age, the author finds that within the manufacturing sector, union firms grew 3.7% more slowly per year than nonunion firms, and within the nonmanufacturing sector, union firms grew 3.9% more slowly than nonunion firms. Small firms in both sectors, however, appear to have escaped any negative union effect on employment growth. Of the control variables, firm age appears to be much more important than firm size in explaining employment growth.The past decade or so has witnessed a dramatic surge of interest in and research on the impact of unions on various aspects of company performance, such as productivity and profitability. Surprisingly, however, relatively few empirical studies have examined the impact of unionization on employment growth within established firms, despite the obvious importance of this issue,

Is the Union Employment Suppression Effect Diminishing? Further Evidence from Canada

“…Toutefois, tous les résultats empiriques sur lesquels cette conclusion repose découlent de données colligées en 1998 ou avant, tandis que les résultats pour le Canada (Long, 1993) remontent à plus de vingt-cinq ans. Tenant compte de cela, Walsworth (2010a) a utilisé les données de l'enquête de Statistique Canada sur le milieu de travail et les employés (EMTE) couvrant la période 1999-2005 pour étudier la plus récente ampleur de l'effet de suppression d'emplois au Canada.…”

“…Tenant compte de cela, Walsworth (2010a) a utilisé les données de l'enquête de Statistique Canada sur le milieu de travail et les employés (EMTE) couvrant la période 1999-2005 pour étudier la plus récente ampleur de l'effet de suppression d'emplois au Canada. L'auteur a observé, comparativement aux résultats obtenus par Long (1993), que l'effet de la baisse de l'emploi syndiqué avait apparemment ralenti. Nous notons toutefois que l'analyse de Walsworth (2010a) n'est pas comparable à celle menée par Long (1993) à plusieurs égards.…”

What Do Unions Do to Innovation? An Empirical Examination of the Canadian Private Sector

“…There have been no U.S. follow-up empirical studies since Leonard's (1992) article. In Canada, Long (1993) analyzed a sample of 510 Canadian workplaces from the period of 1980 to 1985, and reported that union firms grew 3.7 percent more slowly per year within the manufacturing industries and 3.9 percent more slowly per year within the nonmanufacturing industry. Also using Canadian data, Walsworth (2010) finds evidence of a diminished union employment effect in a sample covering 1999 to 2005.…”

What effect do unions have on wages now and would freeman and medoff be surprised?

“…There is a growing body of evidence that employment growth rates are lower in the union sector, suggesting (2) or (3). The evidence is for the United States (Leonard, 1992), Canada (Long, 1993), and Australia (Wooden and Hawke, 2000) and Britain (Blanchflower et al, 1991;Bryson, 2001). However, Freeman and Kleiner (1999) and DiNardo and Lee (2001) find no clear link between unionization and closure.…”