unionvote-thumb-1.png
unionvote-thumb-1.png This article is more than 6 years old

Rise of income inequality is linked to decline of unions: new IMF study

Unions have been given their due by the International Monetary Fund. Income inequality rises when unionization declines, according to a new global analysis of advanced economies — including Canada:   “The decline in unionization is strongly associated with the rise of income shares at the top,” according to an upcoming report from two IMF economists — accounting for about […]

Unions have been given their due by the International Monetary Fund.

Income inequality rises when unionization declines, according to a new global analysis of advanced economies — including Canada:

 imf3-screen-shot-2015-03-02-at-9.37.55-am.png

“The decline in unionization is strongly associated with the rise of income shares at the top,” according to an upcoming report from two IMF economists — accounting for about half of the 5% rise in the top 10% of the population’s income share since 1980.

The IMF report lines up with a Unifor analysis last year on the impact of unionization on the poverty rate in some of the world’s most developed countries.

The numbers are stark — the lower the unionization rate, the higher the poverty rate:

unions-poverty.jpg

In fact, Canada’s income gap is among the fastest growing in the developed world. The top 1% in Canada captured 37% of the overall income growth in the last three decades:.

3.pngThe IMF report argues that as “deunionization weakens” the earnings and bargaining power for middle- and low-income workers, it “increases the income share of corporate managers’ pay and shareholder returns.”  

So, when union membership grows, the middle class thrives

Meanwhile, 2014 studies in the U.K. and U.S. have also linked the decline in union membership to rising income inequality, with the latter estimating that every 10% increase in union membership would bring about a projected decline in income inequality of between 2.5 and 3%.

And finally, courtesy of the Canadian Centre for Policy Alternatives, this is how Canadian union membership levels since 1920 correspond with Canadian wages — when excluding the earnings of the top 1% of the population: 

4.png

Should someone explain all this to the Harper government?

Photo: Schoolnet digital collections.

Help us protect Canadians by holding the powerful accountable.

Journalism is an important public service. That’s why PressProgress is prioritizing stories aimed at keeping Canadians safe and holding the powerful accountable during the coronavirus pandemic.

Please consider supporting our award-winning non-profit news organization so we can keep making a positive impact for Canadians.

 

Support Our Journalism
PressProgress
PressProgress is an award-winning non-profit news organization focused on uncovering and unpacking the news through original investigative and explanatory journalism.

Most Shared

thumb-2022-01-014 Video

Ontario Schools Are Looking For ‘Unqualified People’ to Fill-In for Teachers Who Get Sick with COVID-19

Related Stories

Video

Fraser Institute Fellow Tom Flanagan: News Stories About Residential School Graves are ‘Fake News’

View the post
Announcement

PressProgress Awarded 100% Perfect Score From International Rating Service That Evaluates Credibility of News Sources

View the post
News

Government of Canada Collected $169 Million in ‘Revenue’ From Student Loan Interest Since Start of Pandemic

View the post

Explainers

Human rights & inclusion

Amira Elghawaby

Here’s The Problem With Hoping Corporations Will Be Socially and Environmentally Responsible On Their Own

View the post
Politics & strategy

Jeremy Appel

The battle of the PACs in Calgary’s municipal election

View the post
Politics & strategy

Jeremy Appel

27 Different Candidates are Vying to be Calgary’s Mayor. Here Are the Biggest Issues at Stake.

View the post