Employers will be holding the line on labour cost; private sector will outstrip public sector
Unionized workers are unlikely to see substantial wage gains in the coming year, according to a recent report by the Conference Board of Canada.
The organization’s Compensation Outlook for 2012 anticipates wage increases for unionized employees to be two per cent next year: 1.5 per cent in the public sector and 2.3 in the private sector, roughly the same as the increases negotiated in 2011.
Chris Roberts, a senior researcher with the Canadian Labour Congress, says even that may be optimistic given the report is based on data collected in June when the economic outlook was slightly more optimistic.
“Since then the U.S. market has plunged and there’s been a flare up of the European crisis,” he says. “The climate has darkened considerably and currently workers are under a lot of pressure.”
For the first time, the Conference Board also surveyed employers about overall salary increases for unionized workers, including in-range adjustments, merit, step progression, etc.
In 2011, unionized workers saw an overall average increase of 2.5 per cent. For 2012, the private sector is projecting a similar increase, with the public sector seeing slightly lower gains at 2.2 per cent.
Karla Thorpe, director, leadership and human resources research at the Conference Board, expects collective bargaining to be focused primarily on wages in 2012 given the concessions and wage freezes seen by unionized workers over the past few years.
“Workers feel they’ve been patient, so that’s cause for tension,” she says, adding there may be less focus on pensions and benefits as workers seek to make up the monetary gap.
CAW president Ken Lewenza says it’s a “real struggle to reach out beyond two per cent in these times” and expects workers will have to look for gains elsewhere.
“Employers don’t want to increase fixed costs so they’re saying whatever gains you make need to be offset by something else,” he says. “They’re basically saying if you want to move the pie around a little bit, go ahead, but the pie won’t get any bigger.”
At the same time, Lewenza expects to see more pressure in terms of productivity or benefit cost-sharing.
Roberts says against this backdrop it will be a challenge for union leaders to please their members. He says the situation with Air Canada’s flight attendants, who turned down a negotiated offer twice, may be a harbinger of things to come.
“Unions are doing their best to stickhandle after dealing with years of sticky issues,” he says. “But it’s an impossible situation.”
Roberts says with private sector investment sluggish and the public sector in a period of austerity, it’s unlikely there will be aggressive wage expectations. But the challenge could be meeting “high” employer demands, such as converting from DB pensions to DC plans for new hires.
He agrees there will be higher expectations for trade-offs, such as the 2011 settlement that saw some members of PSAC give up severance in exchange for wage increases.
Roberts says there’s a lot of talk about finding “innovative” solutions but that may not be easily done.
“You’re seeing a level of frustration,” he says. “We’re running out of opportunities to squeeze blood out of a stone.”
Both Roberts and Lewenza expect to see more labour unrest in the year ahead, despite the study’s finding that 56 per cent of organizations surveyed viewed the overall labour-management climate as co-operative, with only five per cent finding it unco-operative. Almost three-quarters of organizations (71 per cent) anticipate their relationships will remain the same in 2012.
