Unionization rates, inequality, and poverty in Canadian provinces 2000–2020

Abstract

Unions can increase the power of workers through both collective bargaining and political avenues, potentially creating less income inequality and poverty. However, this potential may not be realized. Drawing on power resource theory, this study uses panel data to investigate the connection between unionization and two measures of after-tax inequality – the income share of the top 1% and the Gini coefficient – and three measures of poverty – the percentage of the population below the low-income cut-off, the average income of the bottom decile, and the percent of the population below the low-income measure – between Canadian provinces from 2000 to 2020. We find that unionization is negatively associated with income inequality in Canada. This relationship is statistically significant. However, we do not find evidence of any statistical association between unionization and poverty in Canada.