By Ali Shamie· On March 30, 2017

In the early 1900s, the Industrial Revolution produced a massive shift in Canadian social and economic life. The introduction of new technology, transportation, and manufacturing created a focus from agricultural to industrial production, which subsequently generated considerable emphasis in class distinctions between workers and factory owners. As the demand for manufactured goods increased, workers became significantly dependent on factory owners for job security and wages. Ultimately, the unjust working conditions experienced by workers led to the formation of unions and the proliferation of worker’s rights. The importance of unionization during the industrial era is undisputed: unionization was essential to equalizing the widening gap in affluence and power and providing workers with a platform to effectively voice concerns.

However, unions today do not work to address social disparities and worker rights. The regimented rules and procedures of unions, once implemented to prevent the threat of inequitable management practices, are economically inefficient when presented in the context of today’s business landscape.

Unions have been successful in attaining seniority rights that effectively reward senior employees in a variety of ways. Long serving employees are given higher wages, promotions, and are protected from lay offs. Union seniority is hugely problematic, especially when it is enforced in a highly skilled, highly technological industry. Seniority presents the practical issue of excluding members of the incoming work force who are highly skilled, technologically proficient and appreciate the complexities of an interconnected global market. In order to stay competitively relevant, businesses cannot operate in the same manner as they did in the past. The implementation of new technology, and the skills that it requires, has ultimately changed the needs of employers for a more adaptive and innovative workforce.

Consider the example of news media, an industry that has historically been heavily unionized in Canada. The way in which consumers receive the news today is through online websites and social media. The process of publishing news articles online that cater to certain consumer demographics requires the implementation of complex algorithms and a comprehensive technological understanding of the Internet. The workers who are best equipped with the skills to facilitate the delivery of news on an online platform are not often those who are senior bargaining unit employees. The deeply entrenched and static policies and procedures of a union are so inflexible that they do not allow organizations to adapt their human capital requirements to meet the demands of the modern day consumer.

Another inefficient component of unions is that is they create an adversarial relationship that does not need to exist by breaking down communication between management and employees. In essence, unions are a third party that are no longer needed in the modern day workforce. When a union member wants to file a grievance or voice any particular complaint, the message is communicated to management through the organization’s respective union leader. The real issue in communicating through a non-neutral representative on behalf of a large number of employees is the message from the single employee can often be lost depending on the way it is conveyed by the union representative. Furthermore, individual issues can take a back seat depending on the political whims of a union leader.

Critics of this argument will say that union leaders are catalysts for fair working conditions and that these representatives ensure management practices are equitable. A simple response to this is that there are already multiple legislative statues that codify fair labour practices, such as: the Employment Standards Act , Canada Labour Code , Occupational Health and Safety Act , and the Ontario Human Rights Code . Therefore, in the instance where management is allegedly exercising unjust or discriminatory practices over workers, there are legislative avenues in which employees can seek retribution without a union.

Finally, unions hinder the growth of the national economy by encouraging outsourcing. Unionization does not present a convincing argument for Canadian businesses to maintain production in Canada because the labour costs imposed by a union will be more expensive than outsourcing production in some cases. It is not reasonable to assume that Canadian businesses will keep production local if unions impose a financial burden on the organization; there are limits to the argument of providing jobs for Canadians if a union makes it nonsensical to do so. In addition, foreign businesses are discouraged from expanding into Canada if they are presented with the possibility of unionization for the same reasons Canadian businesses do not want a unionized workforce.

Moreover, the prospect of unionization does not foster an attractive work environment for young employees. The needs of the young workforce are at odds with the structure of a union because wages correspond to both seniority and position within the organization in a union. In addition, depending on how negotiations are conducted, organizations are limited to the terms outlined in the collective bargaining agreement. Therefore, if an employer wishes to implement a new policy or program that better caters to the needs of the young workforce, management must get the consent of the union leaders who will always have an interest in preserving the seniority rights inherent in an unionized setting.

It is important not to diminish the role unions have played in Canadian history. Unions were effective in equalizing the distribution of wealth in society and no doubt have protected a number of employees from mistreatment. However, set against the background of today’s business landscape, unionization is economically inefficient because the static policies and procedures of a union are incompatible with the direction the Canadian economy is moving.