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Collective Bargaining and Labour Market Outcomes for Canadian Working Women

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Collective Bargaining and Labour Market Outcomes for Canadian Working Women

I INTRODUCTION: UNIONS, LOW PAY, AND EARNINGS INEQUALITY

The major purposes of this paper are, first, to examine the impacts of collective bargaining on labour market outcomes for women workers in Canada, specifically with respect to pay, benefits coverage, the incidence of low pay and the extent of earnings inequality, and, second, to suggest ways in which positive impacts could be extended via the expansion of collective bargaining coverage. This part of the paper briefly reviews the literature on the impacts of collective bargaining on earnings, low pay, and earnings inequality, and Part II provides some background description of the labour market …show more content…

To indicate the extremes, the earnings gap between the top and bottom deciles of women earners in Canada is double that in Sweden (i.e. the ratio between the upper limit of D9 and the bottom limit of D2 is 3.7 compared to 1.8), and the incidence of low pay among full-time women workers (defined as earning below two-thirds of the economy wide median wage) is 34.3% in Canada compared to just 8.4% in Sweden. OECD countries such as Canada and Sweden are exposed to broadly comparable forces of "structural" change, such as exposure to international trade and investment flows and to rapid technological change, but differ significantly in terms of labour market institutions. This suggests that institutions such as collective bargaining can have significant impacts on the quality of jobs as well as on the level of inequality between wage earners.

As the OECD notes, a major explanation for large differences between countries is labour market institutions: "different institutional settings with regard to wage bargaining, legal minimum wages and the generosity of unemployment and other related benefits appear to account for some of the wide variation across countries in the over all incidence of low pay." More specifically, it was established in the OECD analysis that there is a high and negative correlation between collective bargaining coverage and the incidence of low pay. Similarly, a major set of Canada-U.S. comparative studies has showed that labour

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