BIG LABOUR DAY NOTHING TO CELEBRATE.

Every Labour Day we’re reminded by union groups how our society relies on them to protect poor and downtrodden workers from rapacious businesses and their conservative political cronies. According to labour leaders, the well-being of workers is only secured through strict employment regulations, which are championed by unions — for example, the former Ontario Wynne government’s that would supposedly result in higher pay and “fairer” workplaces.

On the Ontario Federation of Labour’s website you can download a vast assortment of Labour Day 2018 paraphernalia, from placards that read “Message to Doug Ford — We are the people!” to petitions demanding the new government uphold the Liberals’ union-friendly labour laws. Workers are in jeopardy, is the message, now that a probusiness government has arrived.

All the Labour Day fearmongering by Big Labour is contradicted by the last four decades of Canadian experience. Workers do quite well without the help of unions, and probably get more benefits without them. From 1976 to 1996, the percentage of workers in Canada who were covered by unions hovered around 38 per cent. But over those 20 years, incomes stagnated among those at the upper limit of the lowest quintile — those you might call the upwardly mobile working poor.

In the mid-1990s, unionization and government spending both fell sharply. And suddenly incomes at the bottom began lifting. For the next 20 years, from 1996 to 2016, union coverage declined steadily to 30 per cent of workers, while the real after-tax incomes at the upper limit of the lowest quintile increased by 36 per cent.

Since correlation is not causation, some might wonder if incomes might have grown even faster if unionization had not declined. This could hardly have been the case. Firstly, unions negotiate wages and benefits based on seniority instead of output, which shrinks the economy by discouraging work effort among unionized workers. Much more importantly, unions also make workers everywhere else in the economy less productive by campaigning for protectionism and labour restrictions that impede mutually beneficial employment arrangements.

For example, Unifor, which bills itself as “the most progressive union in Canada,” has supported using NAFTA’s renegotiation to impose higher trade barriers while demanding that any trade agreement preserve supply management for dairy, poultry and eggs, which costs the poorest working families more in groceries, and damages economic growth, all to benefit a privileged few in the dairy industry. How progressive.

Similarly, recently successful minimum-wage-hike campaigns by unions in Ontario, Alberta, and British Columbia have protected the privilege of a minority of unionized workers by obstructing competing job seekers who would take a job at lower wages. The result is to increase poverty in the long run by locking the most disadvantaged workers out of the job market and kicking inexperienced workers off the bottom of the economic ladder.

Union support government procurement to buy local or hire union-only shops, taxi regulations, and similar policies are more examples of how unions work. The union agenda is to lobby government to impose an artificial scarcity in supply — of labour, goods or service — to the benefit of some unionized workers and at the expense of people who are less politically powerful and usually poorer. The effect is a net economic loss and more poverty.

Union activists might argue that powerful unions help low-wage workers get a bigger slice of the pie from greedy corporations. But industries that provide jobs to unskilled workers tend to exist in fiercely competitive markets (retail and restaurants, for example), with low net profit margins, usually of only a few per cent. Squeezing these margins further to redistribute income through unionization only forces business closures and relocations, ultimately eliminating jobs.

And there is compelling evidence that powerful unions don’t even help the unionized workers themselves. A recent study from Stanford University’s Hoover Institution found that, after controlling for other factors, life satisfaction and economic optimism improved after states adopted right-to-work laws (which deny unions the ability to compel paid membership in a workplace and so result in lower unionization rates) and that the “bulk of the increase in well-being and economic sentiment is concentrated among… union workers.”

Given this evidence, we shouldn’t be celebrating Labour Day as some kind of tribute to unions. What we should celebrate instead is that workers at the bottom have seen much better income growth — a happy result that coincides with the decline of unionization.