Union wage premium

Tony Fang and Anil Verma

• In 1999, the average unionized worker earned $20.36 per hour while the average non-unionized worker earned $17.82, an overall union wage premium of 14.3%. After adjusting for employee and workplace characteristics, the differential was reduced to 7.7%.
• Differences between unionized and non-unionized workers may explain part of the wage differential. For example, unionized workers were somewhat better educated: more had trade school education (15% versus 11%) or undergraduate or higher education (21% versus 18%). They also had longer job tenure (9 versus 6 years).
• Workplace characteristics also differed. Unionized workers were more likely to be in primary manufacturing, communications and utilities, or education and health-care industries. They were also more likely to be found in larger firms (45% versus 11%).
• The greatest adjusted union wage premium was in the construction industry. Similarly, construction occupations showed the greatest adjusted wage premium (15%). Management and professional occupations had the smallest differential (-1%), followed by the financial, administrative and clerical group (2%).
• The adjusted union wage premium was higher than the average in British Columbia (14%), the Atlantic provinces (12%), Manitoba and Saskatchewan (9%), and Alberta (8%). Quebec, the most unionized region in Canada, showed a modest gap of 5%; Ontario, a relatively less unionized province, had a premium of 6%, somewhat below the national average.

Tony Fang is with the Business and Labour Market Analysis Division. He can be reached at (613) 951-4233 or perspectives@statcan.gc.ca.

Anil Verma is with the Centre for Industrial Relations and the Rotman School of Management at the University of Toronto. He can be reached at (416) 946-3602 or perspectives@statcan.gc.ca.