Manufacturing-sector job seekers face lower wages in new employment
Unionized employees who lose their jobs are just as likely to be in a union workplace in their next position, according to a recent report by Statistics Canada.
The study looked at layoffs in Canada from 2002 to 2006. It found seven in 10 displaced workers were not unionized when they got their layoff notice and were still not unionized after finding a new job. Similarly, unionized workers managed to find a subsequent job within a unionized environment.
However, Victor Carrozzino, executive assistant to the national president of the United Food and Commercial Workers Union (UFCW), says that’s not the reality for many union members, especially in certain regions of Canada. He cites the former textile “corridor” along the Quebec-Ontario border.
“It used to be very heavy-duty textile and apparel production. Those union jobs dried up and there are no other union jobs available,” he says.
According to the Statistics Canada report, people who found a job after a layoff — whether unionized or not — were 60 per cent more likely to experience a reduction in their hourly wage, often by as much as 20 per cent.
However, the report concludes that, given the tendency for union workers to find another unionized job, wage decreases experienced by laid-off workers cannot be attributed to a shift toward non-union jobs.
Carrozzino says the issue is more connected with the type of job workers find next. In the case of employees in the manufacturing sector, they’ve lost the well-paying jobs they once held and are now forced to take lower-paying jobs — some of which may be unionized.
“Quite often the person that left manufacturing doesn’t go strictly back to manufacturing because those jobs are disappearing and they’re going into the service sector,” he says. “On average, we know pay in the service sector is lower than in the manufacturing or industrial side.”
The study noted that during this period, workers in the manufacturing sector were 1.5 to 2.7 times more likely to experience a layoff than workers in other sectors of the economy. The sector, largely concentrated in southern Ontario, has lost more than half a million jobs since 2002 and a recent study by the Canadian Auto Workers (CAW) found 70 per cent of workers were shifting to positions with no union.
The study also compared layoffs in this period against those from 1993 to 1997, on the heels of the recession of the early 1990s. It found people laid off between 2002 and 2006 were more likely to find another job than those laid off in the mid-1990s, with average employment rates of 81 per cent and 73 per cent respectively.
Carrozzino says workers may not fare so well during the recovery from the most recent economic downturn.
“The number of options unemployed workers have today has decreased dramatically compared to 10, 20 or 30 years ago,” he says. “I don’t have to do a study. Life experience will tell you that promptly.”
According to Carrozzino, the difficulty facing many unemployed workers this time around is that they have to start over in new careers or new sectors, and that often puts them at the bottom of the pay scale.
“When you start as the new person, you normally start with a lower rate of pay,” he says. “You’re not the one who has accumulated the better position, the better qualifications, etc. It takes some time to climb up — even within a union workplace.”
The study also indicated that about one-fifth of all laid-off workers lost their pension plan coverage by changing jobs. Carrozzino says this statistic should not be ignored in the current discussion of pension reform in Canada.
