The Economic Crisis and Labour Disputes

Jim has written a couple of posts about “the current mini wave of industrial unrest in Canada.” My union recently joined the fray by striking against Vale Inco.

While several prominent strikes have recently captured Canadian headlines, I wondered whether the economic crisis has actually led to more labour disputes. On the one hand, concessionary demands from employers typically provoke resistance from unions.

On the other hand, workers have less leverage and less to gain by striking when their employer’s revenue is limited by an economic downturn. From a purely theoretical perspective, it is difficult to determine whether a recession would increase or decrease labour disputes.

Fortunately, the federal government has been keeping statistics on work stoppages since the end of World War II. The number of days lost to work stoppages reflects both the frequency and duration of strikes and/or lock-outs.

During the fourth quarter of 2008 and the first quarter of 2009, about 90,000 person-days per month have been lost to labour disputes. This constitutes twice the level of labour disputes that prevailed during the first half of 2008.

However, it is an extremely low of level of labour disputes by historical standards. Prior to 2006, one would have to go all the way back to the early 1960s (when Canada’s total unionized workforce was much smaller) to find a year in which lost person-days averaged below 100,000 per month. Today’s level of labour disputes is only around one-seventh of the 1970s average.

What about previous recessions? Canada had a rising level of labour disputes going into the early 1980s, but that recession appeared to cut this level approximately in half. The early 1990s recession also seemed to cut the level of labour disputes by about half.

In both cases, labour disputes peaked the year before economic output contracted. Labour disputes then declined during the contraction and the subsequent years of high unemployment.

Although the Great Depression is remembered as a period of union organizing and militancy, post-war history seems to indicate that recessions tend to reduce the prevalence of labour disputes. There is some preliminary evidence that the current economic crisis may be characterized by a rise in labour disputes, albeit from a very low level.

UPDATE (July 16): Quoted by Canadian Press

 Labour Disputes in Canada (thousands of person-days lost per month) 

Late 1940s

183 

1950s 

144  

1960s 

252 

1970s  

608 

1980 

761 

1981 

738 

1982 

475 

1983 

370 

1984 

324 

1985 

260 

1986 

596 

1987 

318 

1988 

408 

1989 

308 

1990 

423 

1991 

210 

1992 

176 

1993 

126 

1994 

134 

1995 

132 

1996 

272 

1997 

301 

1998 

204 

1999 

203 

2000 

137 

2001 

184 

2002 

249 

2003 

144 

2004 

265 

2005 

346 

2006 

 66 

2007 

148 

2008Q1 

 46 

2008Q2 

 51 

2008Q3 

 73 

2008Q4 

 95 

2009Q1 

 90 

2 comments

  • Geoff Bickerton

    One of the reasons for the reduction in labour disputes during the recession of the early 1980’s was the imposition of wage controls on the public sector by the fedeal government and many of the provinces.

  • Erin:

    In Economics for Everyone, Jim writes that when “unemployment is very low, workers (individually and collectively) feel confident to demand higher wages.” In such cases, employers often have little choice but to give them the wage increases they demand. Otherwise, they may lose workers to other employers or face a strike or both (p. 153).

    Your posting substantiates what Jim writes and is of great assistance to me as I prepare notes for a guest lecture I’m giving next week at Carleton’s School of Social Work.

    Cheers,

    Nick

Leave a Reply

Your email address will not be published.