The Economic Crisis and Labour Disputes

Jim has written a couple of posts about “the current mini wave of industrial unrest in Canada.” My union recently joined the fray by striking against Vale Inco.

While several prominent strikes have recently captured Canadian headlines, I wondered whether the economic crisis has actually led to more labour disputes. On the one hand, concessionary demands from employers typically provoke resistance from unions.

On the other hand, workers have less leverage and less to gain by striking when their employer’s revenue is limited by an economic downturn. From a purely theoretical perspective, it is difficult to determine whether a recession would increase or decrease labour disputes.

Fortunately, the federal government has been keeping statistics on work stoppages since the end of World War II. The number of days lost to work stoppages reflects both the frequency and duration of strikes and/or lock-outs.

During the fourth quarter of 2008 and the first quarter of 2009, about 90,000 person-days per month have been lost to labour disputes. This constitutes twice the level of labour disputes that prevailed during the first half of 2008.

However, it is an extremely low of level of labour disputes by historical standards. Prior to 2006, one would have to go all the way back to the early 1960s (when Canada’s total unionized workforce was much smaller) to find a year in which lost person-days averaged below 100,000 per month. Today’s level of labour disputes is only around one-seventh of the 1970s average.

What about previous recessions? Canada had a rising level of labour disputes going into the early 1980s, but that recession appeared to cut this level approximately in half. The early 1990s recession also seemed to cut the level of labour disputes by about half.

In both cases, labour disputes peaked the year before economic output contracted. Labour disputes then declined during the contraction and the subsequent years of high unemployment.

Although the Great Depression is remembered as a period of union organizing and militancy, post-war history seems to indicate that recessions tend to reduce the prevalence of labour disputes. There is some preliminary evidence that the current economic crisis may be characterized by a rise in labour disputes, albeit from a very low level.

UPDATE (July 16): Quoted by Canadian Press