Worker Choice for British Columbians: Gaining an Advantage

As labour and capital have become more and more mobile, jurisdictional competitiveness is becoming more important in securing and maintaining economic prosperity. A minimum requirement is to have taxes, regulations, and other important policies competitive with competing jurisdictions. To gain an advantage, jurisdictions need policies that differentiate themselves from competing jurisdictions.

As BC’s recently minted Clark government works through its economic priorities, it would be well advised to consider worker choice laws.

Unfortunately, these laws have tended to be caricatured rather than debated. In the U.S., federal laws prohibit workers from being forced to join a union and workers are allowed to opt-out of union dues that are not related to representation. That is, if unions want to pursue social or political activities, workers are permitted to have their union dues reduced proportionately.

Twenty-four U.S. states, including Indiana and shockingly Michigan in 2012, expanded on federal legislation in order to allow workers in these states to fully opt-out of union dues through the adoption of worker choice laws.

Labour laws in Canada are markedly different. In all Canadian provinces, mandatory union membership and full dues payments are permitted as a condition of employment. This means that workers at a unionized firm are required to become union members and financially support the union.

This has resulted in marked differences in unionization rates. In 2012, for instance, British Columbia maintained a private sector union rate of 18.1 per cent compared to union rates of 10.0 per cent in non-RTW states and 3.9 per cent in RTW states.

The economic benefits of worker choice laws come primarily through reductions in unionization. Perhaps not surprisingly, when workers are given choice with respect to union membership and dues payment, they choose unions less often. In addition, the ability of workers to choose means unions must be more responsive and sensitive to the wishes and demands of their members or risk losing them.

The benefits conferred on BC from adopting worker choice laws could be material. Our study, U.S. Worker Choice Laws and Implications for British Columbia and Ontario concluded that such laws in the U.S., on average, increase economic growth by about 1.8 per cent and employment by about 1 per cent. These results are in-line with most of the previous economic research completed on the effects of unionization.

If these findings on worker choice laws hold for BC, total economic output would increase by $3.9 billion a year (about $844 per British Columbian) and employment would increase by 19,000 jobs.

The opportunity for British Columbia goes beyond simply being the only Canadian province with worker choice laws. Such laws would also create a regional advantage for BC since Idaho is the only northwestern state with such laws.

Many of our most important industries could gain a significant advantage over similar industries in other provinces and bordering U.S. states including, forestry, fishing, mining, oil and gas, construction and manufacturing.

Applying the lessons learned in Oklahoma, which switched to RTW laws in 2001, and whose manufacturing sector benefited greatly, BC’s manufacturing sector alone could be expected to expand by over $200 million annually along with increased employment. Similar benefits could be expected in other heavily unionized sectors of the BC economy.

These predicted effects are not trivial, and the prospective benefits should stimulate a debate in BC about worker choice laws. As the BC government begins the process of drafting and implementing policies to ensure economic prosperity and competitiveness, it seems obvious that worker choice laws should be prominent among their considerations.