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Transcript of i Rout Look Prese
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The State of the Unions
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The newly merged CAW and CEP unions vision is to provide acollective voice for the broader public students, retirees, and theunemployed
Developments to Watch
4
4
,be little change in labour-management relations or collectivebargaining outcomes, but
If the new union succeeds in becoming the recognized voice of the
disenfranchised, its social and political influence will be considerablyenhanced
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Studies have demonstrated that public sector employees enjoy asubstantial wage premium relative to the private sector about 13%without considering union status and at least 6% with that adjustment
Developments to Watch
5
5
- . ., ,disability, health and welfare benefits) is also considerably higher inthe public sector
Governments will increasingly focus on bringing public sector
compensation and benefits more in-line with the private sector
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Terms of the recent auto industry agreement reflect concessions overand above those negotiated when GM and Chrysler were inbankruptcy and the industry is now profitable the new two-tier wagestructure now constitutes a benchmark in the auto sector as cost
Developments to Watch
6
6
pressure u s t roug out t e n ustry s supp y c a n
At the very least, there will be considerable downward pressure onwages in manufacturing and related industries
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The Economic Outlook
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The global economy has endured 4 years of fragmented anduncertain growth there is little evidence that this will improvesubstantially over the short to medium terms
In General
88
economy have eroded consumer confidence and slowed businessinvestment
Fiscal restraint will reduce government spending for the first timesince the late 1990s
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Employment growth remains somewhat lower than historical norms,but real hourly wages for full-time workers have posted meaningfulgains increasing by a total of 10% between 1998 and 2012
In General
99
regions and industries are considerable with the biggest gains inAlberta and Saskatchewan while Central Canada and the Maritimeslag
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Real GDP Growth Rate in Canada(percentage change)
1.0
2.0
3.0
4.0
1010
Source: The Conference Board of Canada, Statistics Canada
-4.0
-3.0
-2.0
-1.0
0.02001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f
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Employment Growth in Canada(percentage change)
2.0
2.5
3.0
1111
Source: The Conference Board of Canada, Statistics Canada
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
1997 1999 2001 2003 2005 2007 2009 2011 2013f
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Wage Growth(percentage change)
4
4.5
5
4
4.5
5Average Weekly Wages Consumer Price Index (CPI)
1212
Source: The Conference Board of Canada, Statistics Canada
0
0.5
1
1.5
2
2.5
3
3.5
0
0.5
1
1.5
2
2.5
3
3.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f
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The Compensation Outlook
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Projected average base pay increases for unionizedworkers are1.6% in the public sector and 2.3% in the private sector lower thanincreases for non-unionizedworkers at 2.8% and 3.0% respectively
The Pay Environment in 2013
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sector realize smaller gains than employees in non-unionizedpositions and the public sector will likely continue for some time
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Projected Wage Adjustments By Industry(per cent)
2013 Projected Wage Settlements by Industry
17
17
Source: HRSDC.
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2013 Projected Wage Settlements by RegionProjected Wage Adjustments By Region(per cent)
18
18
Source: HRSDC.
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Actual and Planned Compensation Increases(per cent; average increase among all non-unionized employees)
3.9 3.93.9 4.04.0
4.5
2012 Actual 2013 Planned
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19
2.9 3.0
2.6 2.8 2.52.5
.
2.5 2.7
3.0
0.0
0.5
1.0
1.5
2.0
2.53.0
3.5
BC AB SK MB ON QC Atlantic
Source: The Conference Board of Canada
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The Bargaining Outlook
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Governments in all jurisdictions remain focused on eliminating theirbudget deficits public sector unions cannot expect more thanmodest real wage increases
The Public Sector
21
21
antipathy towards public sector workers, the collective bargainingclimate will be challenging
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Reports of record corporate profits must be put in perspective,corporate profits have recovered to their long-term levels whilelabour income as a percentage of GDP has remained relativelyconstant since 1996
The Private Sector
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22
As with the auto industry, corporate profitability does not preclude thepossibility that unions will have to make concessions whereinvestment and employment growth is strong, unions should be ableto realize gains
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Corporate Profits(per cent of GDP)
12%
14%
16%
23
23Source: The Conference Board of Canada, Statistics Canada
0%
2%
4%
6%
8%
10%
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Labour Income(labour income as a per cent of GDP)
48%
50%
52%
24
24Source: The Conference Board of Canada, Statistics Canada
40%
42%
44%
46%
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012f
2013f
2014f
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The Haves and the Have Not
Private Sector
Oil & gas, mining are
Public Sector
Governments focused on
25
25
o ng we - compe on
for labour is puttingupward pressure onwages
Organizations withlegacy costs are not conflict between need forcost containment andlabour's expectations
e m na on o e c s w m
wage increases andemployment growth
Public sector unions that havefaced years of restraint may notbe so accommodating in 2013
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Both labour and management are bringing more realisticexpectations to the bargaining table
Over half (53%) of respondents to the Boards Compensation
What to Expect
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26
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relationship as cooperative while many (42%) rated the relationshipas neutral
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Negotiation Issues(percentage of unionized organizations)
ManagementWages (55%)
UnionWages (85%)
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27
Organizational change (36%)Flexible work practices (34%)
Business competitiveness (32%)
Health benefits (36%)Pensions (29%)
Outsourcing and contracting out(26%)
Flexible work practices (19%)
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Conclusion
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The Canadian economy faces a period of slow near-term growth thatwill challenge government spending and revenue capacity over thelong-term
The New Normal
29
29
compensation across Canada, regardless of the political party inpower
Bargaining outcomes in manufacturing and related industries will
mirror those in the auto industry downward pressure on wages andbenefits, and increasing use of two-tier wage structures
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The new normal is characterized by modest economic prospectsbeing matched by modest expectations at the bargaining table
The good news is that this may provide a degree of stability and
The New Normal
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30
rather than rhetoric
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