Immigration, Ethnicity and Unionization: Recent Evidence for Canada

Department of Sociology and Centre for Industrial Relations

University of Toronto

Rotman School of Management and Centre for Industrial Relations

University of Toronto

Racial minorities in Canada, particularly men, have somewhat lower rates of unionization, defined as union membership and/or coverage by a collective agreement. Analysis of data from the 1994 (second) wave of the Survey of Labour and Income Dynamics (N=14,740) shows two reasons. First, immigrant men, among whom racial minorities are prominent, have assimilated slowly into unionization, more slowly than immigrant women. And second, among persons born in Canada, racial minorities, particularly men, have lower rates of unionization. A further analysis of wages and earnings suggests that lower unionization rates for immigrant men appears to slow their wage assimilation, but does not appear to affect racial minority immigrants in other ways. For racial minorities born in Canada, lower unionization rates for native-born racial minority men may directly affect their earnings. The fact that union wage and earnings premiums are similar across racial groups suggests that in Canada, collective bargaining processes have neither positive nor negative effects on the extent of any discriminatory disadvantage facing racial minorities. Implications for Canadian unions in addressing issues of diversity are discussed.

Introduction

Immigration in recent decades has increased the ethnic and racial diversity⁽¹⁾ of the workforce across urban centres both in the United States and in Canada. In the U.S., where racial issues have long been prominent in discussion of labour markets, recent immigration has added new dimensions to such discussions (Waters and Eschbach 1995; see also Borjas 1985, Chiswick 1986, Lieberson and Waters 1988, Portes and Rumbaut 1990, Schlesinger 1992, and Waldinger 1996). In Canada, recent immigration has been similar in its diversity, and in proportion to population has been even greater in volume (Halli 1990; Reitz 1998, 8-13). This immigration since 1970 has propelled race to prominence as an issue in urban Canada for the first time (Satzewich 1992; Henry et al. 1994). Research on the labour market experience of immigrants, therefore, has been of much interest to researchers and policymakers. This concern about the integration of immigrant and ethnic minority workers naturally raises the issue of another labour market institution, namely, labour unions whose role and impacts have been studied extensively in both Canada and the U.S. Since labour unions were founded on the principles of social justice and workplace fairness, it is only natural to ask what impact they may have on ethnic and immigrant workers. Equally, has the increase in the proportion of ethnic and immigrant workers had any impact on unions and their policies?

More specifically, one would like to know if unions impact the integration of new immigrants, particularly for those coming from a non-European background, into the labour market. Even though both Canada and the U.S. have received large inflows of immigrants since their founding, it is only in the last twenty years that significant numbers have come from countries outside Europe. There is considerable evidence indicating that non-white immigrant minorities experience significantly lower success in the labour market, compared to immigrants from Europe, and compared to the native-born workforce. Every labour force analysis of the earnings of immigrants in Canada (for example, Li 1988; Reitz and Breton 1994, Baker and Benjamin 1997) has shown that, as in the U.S., after account is taken of measured qualifications such as education, language knowledge and work experience, those of non-European origin earn substantially less than immigrants of European origins, and less than the native-born members of the workforce. There is also lots of evidence, both systematic and anecdotal, suggesting at least some of this disparity is due to direct racial discrimination (Henry and Ginzberg 1985). It would be useful to know what role, if any, unions play in affecting (i.e., improving or otherwise) the labour market experiences of such people.

In this paper, we use recently-available data from a large-scale national survey to address two questions. First, is there a difference between union coverage of racial minorities, both immigrant and native-born, and that of the white majority? If yes, what factors account for this difference? Second, to what extent does union coverage account for the differences in earnings of racial minorities compared to the rest of the workforce? We estimate the gross difference in union coverage and earnings and then try to decompose it by controlling for factors such as gender, recency of immigration, education and occupation.

Theoretical Concepts and Previous Research

Previous studies of the integration of immigrants in the labour movement, based on experiences in the United States (Rosenblum 1973; Parmet 1981; Collomp 1988; Mink 1986; Delgado 1993) as well as other countries (e.g. DeJongh 1985; Quinlan and Lever-Tracy 1990), have recognized that such integration is far from automatic. Rather, it is a social process which evolves over time, and depends on how immigrants enter or leave unionized occupations and workplaces, and how they are affected by on-going processes both of union certification, and of union job loss and de-certification. One study (Christofides and Swidinsky 1994) introduced union membership as a variable; it showed that visible minority males are only two-thirds as likely to be union members as majority group males. Here we want to examine this relationship further.

The entry of immigrants into already-unionized occupations and workplaces may be examined as part of a broader process of immigrant assimilation within economic institutions. This process may be affected by a number of reasons. On the one hand, immigrants may have little knowledge of their potential choices in the labour market. They may come from countries where unions are either not prevalent or less effective (less power, more corruption, more violent, etc.) compared to Canadian unions. They may also face more barriers to entering jobs with high unionization rates (usually the better-paid jobs) because of lack of Canadian education and experience. In many immigrant communities, social networks may direct new workers to specific occupations and industries which are often not unionized (DeFreitas 1988), and also toward positions within a local ethnic economy which may also be less unionized (Portes 1995). However, as immigrants gain more experience in and knowledge of the Canadian labour market, they may become more adept at gaining entry to more jobs and occupations as well as become more informed about the labour movement and the benefits of union membership.

Employment discrimination against immigrants or minorities may take the form of lack of access to certain jobs and occupations, discriminatory pay, promotions or dismissals. Such discrimination may also affect access to union jobs. If discrimination against visible minorities exists, it is reasonable to assume that when they first enter the labour market, they would not be able to obtain entry into certain jobs, occupations and industries. They would then be over-represented in some jobs and under- represented in other jobs. If unions happen to cover more of the jobs where minorities are under-represented then we may expect the unionization rate for racial minorities to be lower. This difference would be attributed correctly to labour market discrimination rather than to a lower preference for unionization among racial minorities. Similarly, if unions were strong in jobs where racial minorities were over-represented then the unionization rate for racial minorities would be higher.

Efforts to organize new workplaces may also affect immigrants and racial minorities differentially. While existing union members may perceive that immigrants pose a threat to their employment and earnings position, they also may recognize immigrant workers as potential recruits who may strengthen the overall labour position. However, some of the same factors that affect the entry of immigrants into already-unionized jobs, and perhaps others as well, may affect the success that unions have in efforts to organize workplaces in which immigrants may be disproportionately represented. Lack of knowledge of the union movement and available options for collective bargaining, and isolation from supportive social networks, may reduce the potential effectiveness of certification efforts.

Where there is a loss of unionized jobs, whether through layoffs, downsizing, plant closings, or de-certification, specific population groups may be affected differently. Clearly if at one point in time immigrants are less represented among union members, then a subsequent loss of union jobs may reduce that disparity by lowering unionization rates in the mainstream population.

These various processes may operate quite differently for men and women. In Canada, a gender gap in unionization has been closed in recent years (White 1993), signalling a gender difference in the processes determining overall unionization rates. These gender-specific processes affecting union representation may also affect newly-arriving immigrants, including racial minority immigrants.

Two studies done in the U.S. show racial minorities to have higher union coverage than the majority white population. Defreitas (1993) using a sample of 23-30-year-olds from the National Longitudinal Survey of Youth, reported higher unadjusted coverage rates for Blacks (29.4%) and Hispanics (20.5%) compared to the rate for Anglos (16.7%). Only Asians (12.5%) had a rate lower than the rate for Anglos. However, once the rates were adjusted for demand factors such as occupation and industry, the differences become insignificant. This study also found immigrants to have a higher rate of unionization.

Another study by Kim and Kim (1997) also reported higher levels of unionization among non-whites, using the March 1996 Current Population Survey. They found unadjusted rates for Asians (16.3%) and Blacks (21.6%) to be higher compared to Whites (13.9%). These differences remained significant even after controlling for a host of factors such as education, gender, age and industry. Further, they report that for Asian-Americans, the length of stay in the U.S. had a positive effect on unionization, suggesting that over time union membership is either sought more or is more available (through jobs). The study did not try to separate the effects of more demand for unionization for greater supply of unionized jobs. They also report that native-born Asian-Americans were more likely to be unionized than naturalized Asian-Americans. Lastly, Asian-Americans with U.S. citizenship were more likely to be unionized compared to non-citizens.

The integration of immigrants in the workforce is affected not only by their participation in the labour movement, but also by the impact that such participation has on the distribution of earnings. Generally, the effect of unions in raising income standards has benefits for all low-income workers, including immigrants and racial minorities (Reitz, 1998). Here we will be concerned with the impact that union membership among minorities has on their earnings relative to the non-minority workforce. Racial barriers in access to union jobs may be one component of the earnings discrimination experienced by minorities, but access to union jobs may offset such discrimination. Freeman and Medoff (1984) showed that in the United States, the most vulnerable groups such as young workers, those with less education or jobs skills, and including blacks, experienced greater earnings benefits from union membership than did older or better-educated workers, or whites. Such data suggest that union membership for such groups may offset disadvantages due to lack of other occupational resources, and may offset discriminatory labour market processes such as racial discrimination. Whether such processes apply to racial minority immigrant groups, specifically in the Canadian context, is a key question to be examined below.

Our study adds to the literature in several ways. First, we describe union membership and coverage among immigrants and racial minorities, using a national data-set that is designed to be representative of the Canadian workforce. Second, we examine how union coverage is affected by minority status and other social and demographic variables. And third, we examine how union involvement affects previously-observed earnings disadvantages among racial minorities and immigrants.

This research addresses issues of practical interest to unions and management (see Odencrantz et al. 1986), as well as of general public policy relevance. Public policy addresses the integration of immigrants and minorities into economic institutions, and unions are a critical element in those institutions. Strategies to address obstacles to the successful integration of minorities can be made more effectively if there is an understanding and appreciation of the part played by unions in that process. A neglect of the position of unions, and of the distinctive features of the union environment, can undermine the success of these strategies.

The analysis also speaks to issues of concern to unions themselves (see Zimny and Waelder 1987). Unions want to add members, and are finding difficulties in many expanding sectors such as financial, business and personal services, computers, and other high-tech sectors. Immigrants are often represented in these sectors, and unions need to understand barriers posed by diversity. Employers negotiating with unions in collective bargaining should understand the changing ethnic composition of the workforce, and its impact in collective bargaining.

Our sample is drawn from the Survey of Labour Income Dynamics (SLID), the second wave for 1994 (N=29632). Although this is a longitudinal survey, the two available waves (1993 and 1994) are so close together that meaningful longitudinal analysis is not yet possible, and we use the data in this study for its cross-sectional content. From this sample, we drew a subsample consisting of adults in the workforce, but excluding self-employed persons and farmers. SLID documents both individuals as cases as well as jobs. Thus, any individual who may have held more than one job in the reference year will have multiple records in the job file. For this study, we selected those individuals who either held a job or had it terminated in December 1994. Thus, we exclude persons whose job terminated earlier in the year. The resulting sample includes 14,740 persons.

The SLID sample is drawn from the Canadian Labour Force Survey, which is a stratified multi-stage cluster sample. The complex sample strata include provinces, urban centres and rural regions within provinces, and economic areas within these units. A published weighting scheme is available to produce populations estimates, but the characteristics of this scheme make it unsuitable for the present analysis.⁽²⁾ This paper presents only unweighted results based on actual interviews conducted.⁽³⁾

The Appendix lists the variables used in our analysis, provides some details on measurement, and indicates the distribution of these variables in the data. The data provide a measure of the Canadian concept of visible minorities, which is specifically designed to capture all workers who are non-white. This definition⁽⁴⁾ does not distinguish among specific minority groups such as Blacks, Hispanics, or Asians. Sample sizes may preclude detailed analysis of these groups in any case.

Unionized workers are defined in this study to include union members and also workers covered by a collective agreement. Immigrants are examined in three categories: recent immigrants who arrived during 1980-94, less recent immigrants who arrived during 1970-79, and immigrants who arrived before 1970. Overall, recent immigrants - and also visible minorities, who as mentioned earlier are more likely to be recent immigrants - have lower unionization rates⁽⁵⁾. For recent immigrants (arriving since 1980) the percentage who are unionized is 24.7 percent, which is 8.3 percent below the rate for immigrants in general (33.0 percent), and 11 percent below the rate for the native born (35.7 percent). This suggests a pattern of assimilation into union status. The racial difference in the overall unionization rates is comparatively small. For racial minorities, the percentage who are unionized is 31.0 percent, compared to 35.6 percent for the majority group.

We can examine the patterns of unionization by immigration status and race together in Figure 1. Figure 1 also distinguishes men and women, because the effects of immigration status and also race vary by gender. Note first (in the left half of Figure 1) that the race matters more among men than among women. Among women there is almost no difference between racial-minority (33.5%) and white (34.9%) in unionization rates. However, among men there is a much larger difference in unionization rates between racial minorities (lower at 28.6%) and whites (higher at 36.3%). Racial minority men have been slow to become involved in the union movement.

The reasons for gender differences in racial minority unionization can be clarified by examining the impact of immigration status on unionization, separately by race and gender (refer to the right half of Figure 1). For the most recent immigrants (arriving between 1980 and 1994) the unionization rate is lower for both men and women. Among racial minorities, however, while the rate of unionization is low it is not lower than for other recent immigrants. In this sense it seems that recency of immigration is more important than race as a determining factor in unionization.

Immigrants arriving earlier -- between 1970 and 1979 -- more highly unionized, as noted above, and in Figure 1 it can be seen that assimilation into union status seems to be more rapid for women than for men. These earlier Immigrants are more highly unionized than the more recent immigrants, but this pattern is particularly pronounced for women. This gender difference in assimilation into union status affects both majority and minority groups, but again there is no minority racial disadvantage in unionization rates apart from the relation of race to recency of immigration. Immigrants arriving before 1970 were highly assimilated into union status for both men and women; racial differences in the data for these immigrants may not be meaningful because of the small numbers of racial minorities.

Although immigration status matters more than in affecting unionization rates, racial differences among persons born in Canada suggests that immigrant status is not the only factor affecting race relations within Canadian unions. Racial minorities born in Canada have lower rates of unionization, 9 percent lower than for persons who are not racial minorities.. In this sense, race does affect union status apart from recency of immigration. But again, Figure 1 shows that there is an important gender difference in this regard. For men born in Canada, the racial difference in unionization rate is 14.8 percent, compared to 4.2 percent for women.

In sum, the greater racial difference in union status for men than for women has two reasons. One reason is the fact that recent immigrant men have assimilated more slowly into union status than is the case for recent immigrant women. Since racial minorities tend to be more prominent among the recent immigrants, this gender difference affects racial minority men more often than racial minority women. A second reason is that, among persons born in Canada, race affects union status more for men than for women. Hence the greater racial difference in unionization rates for men cannot be entirely attributed to slower assimilation of immigrant men into union status.

The differential results for men and women may be explored further by examining unionization rates in specific occupations. Although the lower rate of unionization for visible minorities holds across most major occupational groups, there are important variations for specific occupational groups as well as by gender. Across both men and women, the racial gap is largest among professionals and managers (43.9% for the majority group vs. 35.7% for visible minorities, a difference of 8.2 percent) and semi-skilled workers (26.3% vs. 17.6%, respectively, a difference of 8.7 percent). In both these occupational groups, the lower unionization rate for racial minorities may be indicative of the difficulties they are alleged to face in accessing higher-paid unionized jobs.

When we examine the occupational distribution by gender a more complex picture unfolds. As mentioned before the overall racial gap in unionization rates is 7.7 percent for men, compared to only 1.4 percent for women. Among men, the racial gap reaches its highest point among semi-skilled workers (17.0 percent), but it is also high for skilled workers (13.8 percent), semi-professionals, technical workers and middle management (12.3 percent), and in the supervisory ranks (11..2 percent). Among men, the racial gap is comparatively low at both extremes of occupational status: at the high end among professionals and managers (3.90 percent), and at the low end for unskilled workers (2.6 percent). Hence for men the racial gap in unionization is most pronounced for workers at the middle levels of occupational status.

For women, the unionization rates for visible minorities are close to that of whites in certain large occupational groupings (the semi-professional, technical and middle management category, and for semi-skilled workers and unskilled workers). The largest racial disparity is for professionals and high level management -- 11.5 percent, much higher than for men. On the other hand, among women the racial minority unionization rates are actually higher, by a big margin, in two occupations, supervisors and skilled workers. These are occupational groups in which there is a significant racial disparity for men. These data show that the racial patterns vary significantly by occupation for both men and women, and the pattern of variation in gender-specific. It should be cautioned that cell sizes for racial minorities in some cases are rather small, so we emphasize the overall pattern rather than results for specific occupations.

Results: Earnings

Our earnings analysis examines the impact of immigrant status and race on total annual earnings from the selected job (held in December, 1994), and also the hourly wage rate for that job, with regression-based adjustments for language background, educational level, work experience,⁽⁶⁾ provincial income levels and marital status. The size of effects of each characteristic on overall earnings and wage differences, net of other factors, and separately for men and women, are shown pictorially in Figures 2 - 5. These figures show the effects (by gender) of race (the earnings and wage differences for visible minority workers), unionization (the earnings and wage premiums for unionized workers), and also the specific difference that union status makes for racial minorities (the earnings and wage effects for unionized visible minority workers). The following discussion summarizes what we have found.

Figure 2. Determinants of Total Earnings, among Persons with Jobs,

Canada, 1994 (Unstandardized Regression Coefficients)

Men

Source: Survey of Labour and Income Dynamics, 1994 wave, unweighted data (missing data: 1,209; n=7627).

Figure 3. Determinants of Hourly Wages, among Persons with

Jobs, Canada, 1994 (Unstandardized Regression Coefficients)

Men

Source: Survey of Labour and Income Dynamics, 1994 wave, unweighted data (missing data: 1,209; n=7627).

Figure 4. Determinants of Total Earnings, among Persons with

Jobs, Canada, 1994 (Unstandardized Regression Coefficients)

Women

Source: Survey of Labour and Income Dynamics, 1994 wave, unweighted data (missing data: 695; n=7113).

Figure 5. Determinants of Hourly Wages, among Persons with Jobs,

Canada, 1994 (Unstandardized Regression Coefficients)

Women

Source: Survey of Labour and Income Dynamics, 1994 wave, unweighted data (missing data: 695; n=7113).

First, our data are consistent with other analyses which have shown that racial minorities in Canada experience substantial economic disadvantage relative to measured qualifications. For visible minority men, total earnings and hourly wages are between 14 and 16 percent less than for whites, other things equal. For visible minority women, total income and hourly wages are about equal to those of white women, substantially below the levels for white males.

Second, the union effect in boosting earnings and wages -- substantial across the entire workforce -- is about the same for racial minority workers as for white workers. This fact is shown by the small size of the specific effect for unionized visible minority workers. For example, among white men, participation in collective bargaining is associated with about 17 percent higher wages; the same is true for racial minority men. Among white women, participation in collective bargaining has a more positive impact -- 35 percent net of measured qualifications -- but again it is the same for white women and for racial minority women.

Third, and by the same token, the extent of these racial disparities are about the same,

regardless of whether or not the workers are union members or covered by a collective agreement. Among unionized workers, racial minority males earn about 15 percent less than white males; among those who are not unionized (or covered by a collective agreement), racial minority males also earn about 15 percent less than white males. To the extent that these disparities reflect racial discrimination in employment, the collective bargaining process seems to have no measurable impact in reducing such discrimination. Among women, there is no racial disparity either for those who are union members, or for those who are not.

Lower levels of unionization for recent immigrants, particularly men, do have earnings implications, though they are small. The 8-10 percent lower rate of unionization for immigrant men arriving since 1970 means that these immigrants earnings are lower by about 2 percent compared to what they might otherwise have been. Given the prominence of racial minorities among these recent immigrants, this lower level of earnings affects racial minorities disproportionately. However, among recent immigrants it affects both racial minorities and whites.

Discussion and Policy Implication

A number of our findings require further exploration, and may carry significant implications for action in Canada. To summarize, our analysis of the 1994 SLID data set shows that among visible minorities, the unionization rate for immigrants is higher than that for non-immigrants. Further, the rate increases sharply with the length of stay in Canada. When we break the results down by gender we find that among men, visible minorities have a much lower unionization rate compared to white men. Among women the difference is small and insignificant. This result is due to better success for women in accessing unionized jobs.

Our analysis suggests that further investigations are needed to try to understand the differential experiences of men and women belonging to the visible minority group. We have some indication that part of this difference is accounted for by women's relatively greater success in accessing unionized jobs. Why that should be so is less clear.

It is also important to investigate the precise reasons for increasing unionization rates for immigrants with the length of stay. Since visible minority immigrants do much better over time than non-minority immigrants it is important to ask if this is because of greater need for voice. Equally, it could be due to greater supply of unionization services (outreach by unions) targeted at this group. In any unionization drives aimed at immigrants, visible minority women appear to be most receptive to the union message.

Unions appear to play only a minor role in the earnings assimilation of immigrants to Canada, including the slower earnings assimilation of racial minority immigrants. What this means is that while unions are not in themselves an obstacle to job opportunity for racial minorities, neither do they assist in overcoming those obstacles. By implication, unions have little impact on racial discrimination in Canada, either positive or negative.

Our results show an aggregate pictures across all industries. It is likely that racial minorities are concentrated in a small number of industries and within those industries unions may have some mitigating impact on wages or other types of discrimination. The problem in investigating these possibilities is that as yet we do not have large enough numbers of racial minorities in all industries to permit a rigorous test of these differences. However, as more data become available from a second panel of SLID data we would be able to investigate this possibility further in the near future.

Lastly, it is worth asking if unions should indeed put the elimination of racial differences in wages, etc., on their priority list. There are several risks and challenges in doing so. First, the increasing ranks of racial minorities coupled with the need to recruit new members to the labour movement would argue strongly in favor of a set of policies aimed at reducing or eliminating the disadvantage faced by racial minorities. Second, if the unions were to do so they will have to sell this idea to their majority members who may not always agree with this thrust especially when a fixed-size pie (e.g. a wage increase) may have to be divided between themselves and minorities whose lower wages may have to brought up to close the gap. Further, on the employment front, some majority group members may resent losing jobs and promotions to minorities in a time of slow employment growth.

These risks notwithstanding, many unions have already begun to place a higher priority on racial equality. Some unions have outreach programs in new organizing. Others have internal cells that provide services directed at minority members. Most collective agreements have clauses that prohibit any discrimination based on race. Yet, racial differences in wages are nearly the same within the unionized sector as they are within the nonunion sector. This suggests that whatever unions may be doing to reduce racial discrimination, the impact of their efforts is yet to show up in aggregate studies like this one. One message that can be taken away from this analysis is that unions may have to re-double their efforts if they want to help racial minorities close the disadvantage gap.

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Appendix.

Distributions of Variables, by Gender

Note: all figures are percentages except mean figures for earnings and wages, N in parentheses