News & information


NAFTA renegotiations show differences between Canadian and U.S. wages and unions

Will Canada help end right-to-work? That is the topic of a recent op-ed by labor journalist Steven Greenhouse in the Los Angeles Times which offers a fascinating perspective on Canadian vs. American wages and labor practices.

In the recent talks regarding the renegotiation of NAFTA among the three parties, the Canadian government has argued that the low wages and labor standards in the United States are creating pressure on Canadian wages, as firms struggle to compete with lower-wage American workers. The Canadian government is therefore insisting that the United States end so-called right-to-work laws. The concerted effort to smash labor unions in the United States has been so effective that the country is increasingly regarded as “low-wage” by other industrialized nations, such as Canada. 

The low wages caused by right-to-work laws have been well documented. According to the Economic Policy Institute, states that have enacted these laws have wages 3.1 percent lower than in non-RTW states.

While the efforts on behalf of the Canadian government are no doubt self-interested, it is a highly revealing look into how the two countries, both very similar economically, diverged with regard to wages, benefits and union rights. It underscores previous data shown below published in the Summer 2016 issue of Jacobin magazine showing the divergence in union density between Canada and the United States over the past 50 years.

The Bureau of Labor Statistics estimates that union density in the United States was 10.7 percent in 2016, down from 20.1 percent in 1983. Union density in Canada by contrast was 28.8 percent in 2014, down from 37.6 percent in 1981 according to Statistics Canada.

Return to our Economics Blog