Measuring Labour Markets 2011

8/4/2019 Measuring Labour Markets 2011

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FRASEINST ITU

Labour Markets

Studies in

Measuring Labour Markets in

Canada and the United States2011 Edition

by Amela Karabegovi, Alex Gainer, and Niels Veldhuis

September 2011

Key Conclusions

This study measures the labour market perormance o Canadian provinces

and US states rom 2006 to 2010 based on ve equally weighted indicators:

average total employment growth, average private-sector employment

growth, average unemployment rates, average duration o unemployment,

and average labour productivity.

Alberta topped the rankings o Canadian provinces and US states with an

overall score o 9.0 out o 10.

Three other Canadian provinces are in the top 10: Saskatchewan (2nd overall,

score o 8.4), Manitoba (4th

, score o 7.2), and British Columbia (6th

, score o 7.0).

While Canadas two largest provinces, Quebec (12th) and Ontario (16th) rank in

the top 20, they continue to grapple with sluggish labour markets with overall

scores o 5.8 and 5.5. Indeed, their rankings are more a reection o poor

labour market perormance in the US than robust perormance at home.

The study also identies our characteristics that afect labour market

perormance: public-sector employment, minimum wages, unionization,

and labour relations laws.


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Fraser Institute / www.fraserinstitute.org

Prcis

This study examines the perormance o labour markets in Canada and the United States

based on a number o actors that help identiy healthy, high-perorming labour markets.

The rst section, an index o labour market perormance, measures the 60 jurisdictions

across ve indicators rom 2006 to 2010: average total employment growth, average

private-sector employment growth, average unemployment rate, average duration o

unemployment, and average labour productivity. These ve indicators yield an overall

score or labour-market perormance.

Alberta ranked rst on the labour-market perormance index with an overall score

o 9.0 out o 10, owing to its top scores on employment growth and private-sector

employment growth, second-place score in duration o unemployment, and top-10

placement in average unemployment rate. Three Canadian provinces besides Alberta

are in the top 10: Saskatchewan (2nd overall, score o 8.4), Manitoba (4th, score o 7.2),

and British Columbia (6th, score o 7.0)

While Canadas two largest provinces Quebec (12th) and Ontario (16th) rank in the top 20,

they continue to grapple with sluggish labour markets with overall scores o 5.8 and

5.5. Indeed, their rankings are more a reection o poor labour market perormance in

the United States than robust perormance at home.

The second section o the study, labour-market characteristics and regulation, examines

our key aspects o labour markets that contribute to their perormance: public-sector

employment levels, minimum wages, unionization levels, and labour-relations laws.

Public-sector employment in Canadian provinces is markedly higher than in most US states.

Alberta was the highest-ranked Canadian province, ranking 31st. Seven o the bottom 10

jurisdictions, including last place Newoundland & Labrador, were Canadian provinces.

Canadian provinces also are poorly compared to US states on the measure o minimum

wages. Nine o the 10 Canadian provinces occupy the bottom 10 rankings overall.

On the unionization measure, the top-ranked Canadian province was Alberta (24.5%).There is a stark divide between Canadaaverage total unionization rate o 31.5%and

the United Statesaverage total unionization rate o 13.1%.

The high rate o unionization among Canadian provinces is the result o biased, overly

prescriptive labour-relations laws that inhibit the proper and ecient unctioning o the

labour market by avouring one group over another and inhibiting innovation and exibility.
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Contents

Summary / 2

Introduction / 7

1 Index o Labour Market Perormance / 15

Indicator 1 Average total employment growth

Indicator 2 Average private-sector employment growth

Indicator 3 Average unemployment rate

Indicator 4 Average duration o unemployment

Indicator 5 Average GDP per worker

2 Labour market characteristics and regulation / 30

Characteristic 1 Public-sector employment

Characteristic 2 Minimum wages

Characteristic 3 Unionization

Characteristic 4 Labour relations laws

Appendix A Methodology / 54

Appendix B Other important actors / 55

Reerences / 63

About this publication / 83


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2 / Measuring Labour Markets in Canada and the United States: 2011 Edition


Summary

Measuring Labour Markets in Canada and the United States: 2011 Edition i

e eve iallme i ou ogoig eeac o ae e peomace o

labou make a explai wy eul ie amog juiicio. Iicao

o labou peomace uc a job ceaio, uemployme, a pouciviy

ae ue o ae Caaia povicial a US ae labou make peom-

ace. Te eco ecio o e uy examie oe caaceiic a egu-

laio o e labou make a ave bee ow o aec i peomace.

Index o Labour Market Perormance

Te Iex o Labou Make Peomace i a compoie meaue o labou

make peomace bae o ve equally weige iicao: [1] aveage

oal employme gow, [2] aveage pivae-eco employme gow, [3]

aveage uemployme ae, [4] aveage uaio o uemployme, a [5]

aveage labou pouciviy.

Key results

1 Albea oppe e li o Caaia povice a US ae o labou make

peomace ove e la ve yea. Te povice og peomace i

oal employme gow (1st ou o 60 juiicio), employme gow

i e pivae eco (1st), low uaio o uemployme (2nd), a aveage

uemployme ae (6th) eable i o acieve e ige oveall coe o 9.0

ou o 10.

2 Te US ae i e We a e Miwe omiae e op o e ak-

ig: ee ae om e WeAlaka, Ua, a Wyomiga wo

om e MiweNo Dakoa, a Sou Dakoawee amog e op

10. Tee Caaia povice beie Albea ae i e op 10, Sakac-

ewa, Maioba, a Bii Columbia.

3 Miciga coe e lowe o ay juiicio (1.3). I ake pooly aco

all ve meaue o labou make peomace: aveage oal employme

gow (60th), aveage pivae-eco employme gow (60th), aveage

uemployme ae (59th), aveage uaio o uemployme (60th), a

aveage labou pouciviy (33rd).


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Measuring Labour Markets in Canada and the United States: 2011 Edition / 3


4 Te lowe-ake Caaia povice wa Pice Ewa Ila occupyig

e 36th poiio wi a coe o 4.9. I ake la (60th) o labou po-

uciviy a a i ige (58th) aveage uemployme ae. O e

emaiig iicao, Pice Ewa Ila ake 4th o 31st.

5 Regioally, e wee Caaia povice ou-peome e oe pov-

ice. I aiio o Albea (1st), Sakacewa (2nd), Maioba (4th), a Bi-

i Columbia (6th), peome elaively well wi coe o 8.4, 7.2, a 7.0.

6 Wii e Uie Sae, e Wee ae peome well: ee o wic

wee amog e op 10. O e oe a, ou o e Miwee ae

(Mioui, Oio, Iiaa, a Miciga) wee amog e boom 12 jui-

icio (ee ae wee ie o e 49th place), a wee ix Soue ae

(Floia, Geogia, We Vigiia, Sou Caolia, Alabama, a Miiippi),

oe ae om e Noea egio (Roe Ila) a oe ae om e

We (Calioia).

Labour market characteristics and regulation

Tee ae ou key caaceiic a egulaio a aec labou make

peomace i eac o e 60 juiicio: [1] public-eco employme,

[2] miimum wage, [3] uioizaio, a [4] labou elaio law. I ai-

io o e meaueme o eac iicao, eac ecio pee a eview

o e eeac io e eec o e caaceiic o egulaio o labou

make peomace.

Public-sector employment

1 Peylvaia oppe e li o Caaia povice a US ae wi e

lowe peceage o i employme i e public eco (eeal, uba-

ioal, a local) (11.5%).

2 Albea wa e ige-ake Caaia povice. Uouaely, i ake

31st wi 15.6% o i oal employme epeee by e public eco. Fol-

lowig wee Bii Columbia, 17.2% a akig 42nd a Oaio, 19.0%,

akig 48th.

3 Te Caaia povice, Newoula & Labao, occupie e la poi-

io, wi public-eco employme epeeig 29.0% o oal employ-

meove wo-a-a-al ime Peylvaia ae a ealy ouble a

o Albea.


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4 Rouig ou e op 11 (wo ae wee ie o e 10th place) wee ee

Noeae ae (Maacue, New Hampie, a Roe Ila),

ix Miwe ae (Mioui, Miciga, Iiaa, Wicoi, Illioi, a

Mieoa) a oe Wee ae (Nevaa).

5 I geeal, Caaa peomace o i caaceiic wa poo. Seve

o e boom 10 juiicio wee Caaia povice (Quebec, New

Buwick, Nova Scoia, Pice Ewa Ila, Sakacewa, Maioba,

a Newoula & Labao). Five o ee povice (Nova Scoia,

Pice Ewa Ila, Sakacewa, Maioba, a Newoula &

Labao) a public-eco employme a exceee oe-quae o all

employme.

6 Tee i a clea ieece bewee e ize o e public eco i Caaa

a i e Uie Sae. Fom 2006 o 2010, Caaia povice a co-

iely ige level o public-eco employme a e US ae.

Minimum wages

1 New Yok oppe e akig; i miimum wage coiue e malle

peceage o aveage wage a alaie pe woke (21.4%): a eie o

New Yok eaig e miimum wage coul ea le a oe quae o

e aveage wage a alaie pe woke o e ae.

2 Albea wa e ige-ake Caaia povice, occupyig e 22nd poi-

io oveall wi a miimum wage equal o 27.2% o e povice aveage

wage a alaie pe woke.

3 Pice Ewa Ila wa e lowe-ake juiicio amog e 60 Caa-

ia povice a US ae. Pice Ewa Ila miimum wage epe-

ee ealy al, 45.5%, o e povice aveage wage a alaie pe woke.

4 Te US ae omiae e op o e akig, olig all o e op 10

poiio.

5 Te Caaia povice ae pooly o i meaue wi ie o e 10 Caa-

ia povice (Newoula, Oaio, Bii Columbia, New Buwick,Quebec, Sakacewa, Maioba, Nova Scoia, a Pice Ewa Ila)

occupyig e boom 10 akig oveall.

6 Tee wa a lage ieece bewee miimum wage a a peceage o ave-

age wage a alaie pe woke i Caaa a oe i e Uie Sae:

e aveage Caaia povice a a miimum wage equivale o 39.1%


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o i aveage wage a alaie pe woke wile e aveage US ae a

a miimum wage equivale o 27.9% o i aveage wage a alaie pe

woke ove e peio om 2006 o 2010.

Unionization

1 No Caolia a e lowe aio o uioize woke o oal employ-

me, wi 4.5% o i employe woke uioize. Vigiia wa eco,

wi 5.2% o i employme uioize.

2 Te op-ake Caaia povice wa Albeaailig a 49th wi 24.5%

o i employme uioize. I i ega, Albea peome bee a

oly wo US ae: Hawaii a New Yok.

3 Quebec occupie la place; 39.7% o i employe wokoce i uioize.

4 Soue US ae occupie 10 o e op 11 akig (wo ae wee ie o

e 10th place): No Caolia, Vigiia, Geogia, Sou Caolia, Akaa,

exa, Louiiaa, eeee, Floia, a Miiippi.

5 No upiigly, e Rig-o-Wok aeoe a pemi woke o

cooe wee o o ey will joi a acially uppo a uioomi-

ae e op o e akig. Te 22 Rig-o-Wok ae occupie all o

e op 11 akig a 18 o e op 20 akig.

6 Caaia povice peome pooly o i iicao, occupyig ie o e

boom 10 poiio.

7 Te ivie bewee Caaa a e Uie Sae wa evie i i mea-

ue. Fom 2006 o 2010, Caaa aveage oal uioizaio ae wa 31.5%

compae o 13.1% o e Uie Sae.

Labour relations laws

1 I aiio o beig able o cooe wee o o o joi a uio, wic i a

woke ig i all 50 US ae, 22 ae poe Rig-o-Wok law (o

woke-coice law), wic alo poibi maaoy payme o uio uea a coiio o employme. Amog e 10 Caaia povice a 50

US ae, ee 22 Rig-o-Wok ae ave e labou elaio law be

uie o pomoig exibiliy i e labou make; o i meaue, eac o

e Rig-o-Wok ae eceive a coe o 9.2 ou o 10.

2 Te emaiig 28 US ae ie o 23rd poiio wi a oveall coe o 7.5.


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3 Te Caaia povice occupie e la 10 poiio (51st o 60th).

4 Albea wa e oly povice a coe above ve (5.3).

5 Quebec (wi a coe o 1.3) a e mo eicive e o labou elaio

law i Caaa a e Uie Sae, ollowe cloely by Maioba (1.8)

a Newoula & Labao, New Buwick, a Bii Columbia (2.8).


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Introduction

Iee i labou make ebb a ow wi e ecoomy a a wole. Te

ece ecoomic owu a e ecoomic ecovey a ollowe, couple

wi a agig populaio a globalizaio, ave pouce gea iee i

e way i couy labou make ucio. Cagig make coiio

a emogapic aco will coiue o iuece ou labou make, wic

i wy ee i a ee o meaue e peomace o e labou make.

Meaueme allow compaio, wic i e ep owa uea-

ig ieece i labou make coiio a aeig poible poblem.

Ti uy povie a oveview o labou make coiio i Caaa

a e Uie Sae. I examie e peomace o labou make i e

wo couie a oe explaaio o a peomace. Meauig i-

eece i peomace a examiig explaaio o oe ieece

eable u o uea wy coiio i e labou make ae bee i

ome egio a i oe. A a eul, we ca begi o examie ow public

policy a oe aco aec labou make.

Organization

Measuring Labour Markets in Canada and the United States i ivie io

wo ecio: e Iex o Labou Make Peomace a Labou Make

Caaceiic a Regulaio. Te pee e peomace meaue

o e Caaia povice a US ae aco ve iicao: [1] aveage



aveage labou pouciviy. Ti ecio alo give a oveall coe o labou

make peomace a combie e ve iicao lie above.

Te eco ecio, labou make caaceiic a egulaio,

examie a umbe o apec o labou make a coibue o ei

peomace. Ti ecio iclue a aalyi o [1] public-eco employ-

me, [2] miimum wage, [3] uioizaio, a [4] labou elaio law.

Eac o e ou ubecio eview e eeac a aa o eac povice

a ae a well a e oveall akig. Ti ecio coclue wi a ove-

view o oe caaceiic, icluig miimum wage exempio, oveimeequieme, a occupaioal liceig, eac o wic aec labou make

peomace bu o wic, uouaely, ee ae cuely o compaable

meaueme available.


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The importance o labour market fexibility

Labou make ae oe o e mo impoa compoe o a ecoomy.

Tey ae e mecaim oug wic we allocae oe o ou mo valu-

able a poucive eouce: uma wok, eo, ceaiviy, a igeuiy.

Labou make mac uma kill, upplie by iiviual eekig o ea

a livig, wi e ema o labou by m, goveme, a oueol.1

Te key o a ig-peomig, efcie labou make caaceize by

og job ceaio, low uemployme, o uaio o uemployme,

a a igly poucive wokoce i exibiliy: e eae wi wic wok-

e a employe alike ae able o aju ei eo give cage i e

makeplace. Fo employee, exibiliy allow em o upply ei labou a

ey wi a i ei eo o eeavou a povie e geae eu

o bee. Similaly, exibiliy allow employe o aju e mix o labou

a capial o epo o make cage.

Regulaio a a iueial impac o labou make exibiliy by

eicig e abiliy o employee a employe o aju ei eo. Rigi

a ovely pecipive labou make egulaio ca impee woke abiliy

a iceive o cage job. I ca alo limi employe abiliy o cage

ei labou ipu uc a e umbe o woke o e aue o ei wok.

I oe wo, labou egulaio ca impee e pee a exe o wic

employee a employe ca eac o cagig make coiio.

Tee i a lage boy o eeac comig a exible labou

make lea o bee labou-make peomace: og job ceaio,

low uemployme, a elaively og pouciviy. Te emial uy

amog ee wa publie by e Ogaiaio o Ecoomic Co-opeaio

a Developme (OECD) i 1994; i i commoly eee o a e Jobs

Study (1994a, 1994b). I coclue a couie wi moe exible labou

makeoe a ave egulaio a allow woke a employe o

eac o cagig make coiioejoye bee eco o job ce-

aio a ige ae o ecoomic gow. I 2006, e OECD publie a

eaeme o e oigialJobs Study. Labou make exibiliy wa agai

empaize. Te ollow-up uie (2006a, 2006b) agai ecommee

1 I i impoa o empaize a labou make ae geeally o iee om ay oe

make excep a wa i beig ae i e wok eo, kill , igeuiy, a iligece

o iiviual. Te make o labou, oweve, ac e ame a oe pouc o maeialmake. A ema o e pouci e cae o labou make, labouiceae,

e pice pai (wage) aju upwa uil a ew equilibium o balace i acieve

bewee e amou o labou emae a e amou upplie. Agai, a wi oe

make, e upplie o labou epo o e ew wage ae. New labou may ee e

make o labou om oe aea o e ecoomy may be eallocae o e aea wi

ige ema. Ti aual poce o eallocaio a pioiizaio coiue uil a

uaiable balace i acieve.


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e aopio o policie a ecouage geae exibiliy o woke a

employe, icluig exible wok-ime aageme a a geae egee

o wage exibiliy o eace peomace.

A umbe o uie examiig e elaioip bewee labou ma-

ke egulaio (i.e., exibiliy) a labou make peomace cooboae

e OECD cocluio. Fo example, a uy by Aloo e al. (2004), uig

aa om 19 OECD couie a paig a peio o 35 yea, ou a

couie wi moe exible labou make a lowe uemployme ae

a ige icome a capial pe woke. Similaly, a impoa uy by

Raael Di ella a Robe MacCulloc (2005) examie ow labou make

a ae moe exible peome compae o oe a ae le exible i 21

OECD couie om 1984 o 1990. Te auo ou a couie wi

moe exible labou make a bee labou-make oucome, iclu-

ig ige iceae i employme a paicipaio ae. Moe ecely,

Baelma e al. (2011) ou a oe o e eao o e gap bewee

Euopea a US labou pouciviy i labou make exibiliy, meaue

by ig co. Specically, e co o iveig i ew ecology ae lowe

i e Uie Sae becaue o lowe ig co, o ig-ik iuie,

uc a iomaio a commuicaio, ae able o oui, iceaig e

couy oveall pouciviy gow.

Oe uie ave examie e elaioip bewee labou ma-

ke exibiliy a e uemployme ae, a key meaue o labou make

peomace. A uy by Kiae a Vie (2001) exploe i elaio-

ip uig immigaio aiic i 22 OECD couie om 1960 o 1997.

Tey ou a e Uie Sae, wic a e mo exible labou ma-

ke, epoe quickly o populaio iceae a, a a eul, ee wa o

cage i e uemployme ae; Euopea couie, wic ave labou

make a ae muc le exible, wee lowe o epo. Aoe uy

by Nickell e al. (2005) examie uemployme pae i e OECD

couie om e 1960 o e 1990. Te auo ou a ieece

i uemployme ae aco e OECD ca lagely be explaie by labou

make egulaiouc a e level o employme-iuace bee,

axe, wage exibiliy, a ae uio powea aec exibiliy. Moe

ecely, Bae a Kaaaou (2008) examie e uemployme ae i

e Spai egio a ou a low level o labou make exibiliy i

ome o e egio le o ae iceae i ei uemployme ae i

ime o poo ecoomic peomace (1985 o 1991) a lowe eceae iei uemployme ae i ime o og ecoomic gow (1992 o 1995).

Oe eeac a examie ow iiviual apec o labou make

exibiliy ca aec labou make oucome. Oe apec o labou make

exibiliy i e balace bewee e eae wi wic employe ca aju

ei labou ipu a employee ca eek job a povie e geae

eu o bee. A egulaoy eviome a kew e balace o powe


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i avou o oe pay ove aoe euce labou make exibiliy becaue

e abiliy o oe pay o puue i be iee a bee eoe. A ie-

eig pape by Beley a Buge (2004) examie wa appe we

labou egulaio i ubalace. Uig aa om e mauacuig eco

i Iia bewee 1958 a 1992, e auo ou a labou elaio law

(egulaio o e elaioip bewee woke, employe, a uio) a

avoue oe goup ove aoe le o lowe oupu, employme, ive-

me, a pouciviy.

Aoe apec o labou make exibiliy i e exe o wic wage

ca aju o cagig make coiio. I wage ae ae uable o, o ae

impee om, movig up a ow wi cagig make coiio, wok-

e eceive a ioe igal abou wee o allocae ei eo. Te eul

woul be a imbalace bewee e umbe a ype o woke a e

ema o labou. Seveal uie ave examie i eec. Fo example,

Bieazl a Gwaey (1998) ou a ige ae o cealize wage-

eig, ice employee-imial policie, a geeou employme iu-

ace le o ige uemployme ae i OECD couie.2Similaly, Beola

e al. (2002), uig aa o 17 OECD couie om 1960 o 1996, ou a

uio wage-eig policie a accoa wage pemium eecively pice

e youg a elely ou o employme.

A al impoa apec o labou make exibiliy i e pee a

wic labou make ca eac o cagig make coiio. Seveal ece

uie ave ow a e abiliy o woke a employe o aju quickly

o make cage a a poiive impac o labou make peomace a

moe geeally o ecoomic peomace. Fo example, a pape by Caballeo

e al. (2004), uig aa om 60 couie o e yea 1980 o 1998, ou

a couie a iceae labou egulaio eceae ei pee o

ajume o make cage, a well a ei aual pouciviy gow.

Moe ecely, Cua a Meliz (2007) ou a couie wi moe ex-

ible labou make ajue o make ock muc ae a o a geae

exe a couie wi iexible labou make. Simially, DAmui a

Pei (2011) ou a aive woke i couie wi le exible labou

make ave geae ifculy ajuig o immigaio iow.

Oveall, ee i a gowig coeu amog ecoomi a labou

make exibiliy eul i bee labou make oucome. Ove a wie age

o couie a ime, a weal o eeac a ow a exible labou

make povie o le uemployme, ige employme gow, igepouciviy, a geeally moe ecoomic popeiy a iexible labou

make.

2 A cae uy o Demak by Eiko a Weegaa-Niele (2007) ou a e i

i Demak wage-bagaiig iiuio om beig igly cealize o moe ece-

alize coicie wi eegulaio a iceae compeiio i e pouc make.


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Measuring labour market perormance

Te Iex o Labou Make Peomace pee a compeeive mea-

ue o labou make peomace i Caaa a e Uie Sae a i

bae o ve iicao ove e pa ve yea (20062010): [1] aveage



aveage labou pouciviy. Te uy employe ve-yea aveage o balace

e ee o ioical aa wile weigig cue peomace. A ve-yea

aveage elp peve iicao om beig kewe by ece aomalou

aa a avoi eliace o iomaio a o loge eec e peom-

ace o a juiicio. Te oma o i ecio i lagely a peeaio o

e akig couple wi a bie icuio. Te ecio iclue a icu-

io o e cue ecoomic iuaio a i impac o e eul publie

i i eiio oMeasuring Labour Markets, geeal obevaio o eac

o e iicao, a icuio o e op- a boom-ake juiicio,

iomaio pecic o Caaa, a geeal e.

Recession and labour market perormance

Wile bo Caaa a e Uie Sae ejoye elaively og ecoomie

a e begiig o e peio (20062007)aveage eal (i.e., iaio-

ajue) GDP gow ae o 2.5% a 2.3% pe yeae iuaio bega o

cage i lae 2007 (Saiic Caaa, 2011; US Dep o Commece, Bueau

o Ecoomic Aalyi, 2011c).3 Ecoomic gow i e wo couie wa

oiceably lowe a/o egaive e ollowig yea (0.7% i Caaa a

0.3% i e Uie Sae) bu e ece ecoomic owu wa mo

evee i 2009 a ecoomic aciviy eclie by 2.8% i Caaa a 3.5%

i e Uie Sae. Bo Caaa a e Uie Sae eboue i 2010,

ecoig og ecoomic gow o 3.2% a 3.0%, epecively.

ypically, og ecoomic gow alae io obu peomace

i oe aea, icluig labou make, a poo ecoomic peomace

e o eul i poo labou make peomace. Te ece ecoomic

owu wa o excepio. Te eceio i bo Caaa a e Uie

Sae ave le o egaive employme gow a ige uemployme

ae. Howeve, labou make peomace i Caaa i o eeioae a

muc a i i i e Uie Sae uig e eceio. Employme i e

Uie Sae eceae by 2.1% uig 2008 a 2009, o aveage, wileuemployme moe a ouble, om 4.6% i 2007 o 9.3% i 2009 (US

Dep o Labo, Bueau o Labo Saiic, 2011e). I Caaa, o e oe

a, employme eclie oly i 2009, by 1.6% (i 2008, employme

3 GDP (go omeic pouc) i ee a e value o all goo a evice pouce

i a give peio o ime.


14/90



a gow by 1.7%) a uemployme iceae by 2.1 peceage poi,

abou 40%, om 5.2% i 2007 o 7.3% i 2009 (Saiic Caaa, 2011a).

Caaia employme eboue o i pe-eceio level by Jauay 2011,

oug i uemployme ae (ill muc ige a e ae i 2007) a

o ecovee a well (Saiic Caaa, 2011a, 2011). Ti i expece ice

may people ee e labou oce a e ecoomy a ecoveig om

a eceio, makig e uemployme ae ige ae a lowe. Te

Uie Sae a egaie e va majoiy o e job lo (i i cuely a

95% o e pe-eceio employme level) bu a o ye eace e pe-

eceio level o employme (US Dep o Labo, Bueau o Labo Saiic,

2011). I oe wo, o oly wa e eceio i e Uie Sae ligly

eepe, a meaue by e coacio i GDP a job loe bu alo e

ecovey om e eceio eem o be akig loge a i Caaa.

Tee ae ou poible explaaio o e Uie Sae elaively

pooe labou make peomace uig a ae e ece eceio.

Fi, i i likely a e eceio a a oge avee impac o e Uie

Sae a o e Caaia ecoomy, epecially give a e acial cii

a e ca o e ouig make oigiae ee. Some ece uie

iicae a eceio couple wi a acial cii, ecliig ouig-

make pice, o bo ave a moe evee impac o labou make pe-

omace. Fo example, Koek a ey (2009), uig aa o e bakig

cii o ig-icome couie om 1960 o 2007, ou a aio a

ave bakig cie a occu wi a eceio expeiece moe evee a

peie iceae i uemployme. Tey ague a i coul be ue o

e lage eclie i oupu (GDP) ypically aociae wi a bakig cii

a a eceio a euce acce o cei a may make i a o ome

m o u opeaig expee, ocig em o lay o woke (Koek a

ey, 2009). Similaly, Claee e al. (2008) ue aa om 21 OECD cou-

ie ove e ame peio a ou a eceio wi eice cei o

eeply ecliig oue pice, o bo, ae ypically moe evee, la loge,

a iceae uemployme. Moeove, eeply allig oue pice ae alo

aociae wi ap eclie i employme (Claee e al., 2008).

Te eco poible explaaio i e iee mix o iuie i

e wo couie. Fo iace, aa om OECD couie ove e la ew

ecae iicae a e coucio iuy i mo eiive o ece-

io, ollowe by uable mauacuig (OECD, 2009).4 Te coucio

4 Moeove, uie ow a i aiio o e mix o iuie , ome goup o employ-

ee may be a a geae ik o loig ei job a oe i a ecoomic owu.

Elby e al. (2010), o iace, ou a male, e youg, a e le eucae, a

well a oe om eic mioiie expeiece ige ae o uemployme uig

eceio ove e pa couple o ecae i Uie Sae, icluig e ece ece-

io. Egema a Wall (2010) cooboae ee ig o e ece eceio. Te


15/90



iuy i e Uie Sae pouce 3.4% o oal oupu i 2010 a

mauacuig, 11.7% (US Dep o Commece, Bueau o Ecoomic Aalyi,

2011). I Caaa, e coucio iuy pouce a omewa ige

ae o e oal oupu (5.8%) bu e mauacuig iuy pouce

abou 12.6% (Saiic Caaa, 2011g). Tee aiic iicae a e ela-

ively pooe labou make peomace i e Uie Sae uig e

ece eceio i o likely ue o a iee iuy mix, a, i paicu-

la, i i o ue o ieece i e elaive ize o e coucio a e

mauacuig eco.

Tily, labou law ca i may way aec ow a couy epo o

a ecoomic owu. Te eveiy o a eceio, a ow apily a eco-

omy ecove om i, ulimaely epe o e abiliy o m o eucue

a eogaize i epoe o cage i make coiio. O coue, i a

yamic ecoomy, make coiio ae coaly cagig. Wa make

eceio iee i a ey ivolve aic cage i make coiio,

makig e m abiliy o epo o ee cage i a imely mae all

e moe impoa. Te pee a wic a m ca epo o uc cage i

eemie by e exibiliy o e labou make. Teeoe, labou law a

ecouage o eic i exibiliy play a impoa ole i eemiig e

labou make peomace o ae a povice i a ecoomic owu.

Fially, e policie couie ueake o ae a ecoomic

owu ca aec e labou make peomace. A e global ece-

io uole, may aio icluig Caaa a e Uie Sae eace

cal-imulu package i ope o booig ecoomic aciviy. Te eviece

om Caaa a e Uie Sae, oweve, iicae a imulu peig

playe a egligible ole i e ecoomic uaou (Kaabegovi e al., 2010;

Coga e al., 2009, Sepembe 17; Bao, 2010, Febuay 23). Moe geeally,

empiical eviece o imulu peig iicae a i i o a eecive

ool o eal wi a eceio (Velui a Lammam, 2010).

I e e, ee acoe eveiy o e ock, e mix o iu-

ie, labou make exibiliy, a goveme epoe o a eceio

coul ave aece labou make peomace i Caaa a e Uie

Sae uig e eceio a coul eemie e pee a wic e wo

auo ague a me likely lo moe job a wome becaue me ae coceae

i mauacuig a coucio, e wo iuie a i by e ece owu(Egema a Wall, 2010). Eviece om OECD couie ugge, imilaly, a

you ae mo eiive o eceio, ollowe by oe wi a low level o eucaioal

aaime a empoay woke (OECD, 2009). Te eao ome woke ae moe

aece by eceio a oe i ei uove co, e co o eplacig cue

employee wi ew oe (OECD, 2009). I co le o eplace youg woke a oe

wi ew kill o lile eucaio a i oe o eplace oe wi a ig level o expe-

ie a exeive expeiece (OECD, 2009).


16/90



couie ecove. I i likely a e eveiy o e acial cii i e

Uie Sae a e couy epoe o i playe moe igica ole

a oe aco. Te iuy mixe elaive ize o i coucio

a mauacuig ecoae o aically iee i e wo cou-

ie. Moeove, a will be icue lae o e uy, e Uie Sae a

moe exible labou make a Caaa oe, uggeig a i aco

i o epoible o e elaively poope labou make peomace i

e Uie Sae.

Eve oug e Caaia labou make ave bee ou-peomig

oe i e Uie Sae i e la ew yea, oe povice a ae

a peome well beoe e eceio ave, o aveage, alo oe well ove

e pa ve yea. Te op 30 juiicio i e Iex o Labou Make

Peomace, publie i e peviou eiio o e uy a coveig

e peio beoe eceio (2003 o 2007), ave alo oe bee ove e

pa ve yea (2006 o 2010) a oe i e boom al.

I i impoa o oe a i i uy we gauge labou make pe-

omace ove e la ve yea. Te eao we ue ve-yea aveage i o

moo ou e ucuaio o e buie cycle a, u, make e com-

paio moe meaigul. I oe wo, eve oug aual a moly

ucuaio i labou make peomace ae impoa, ey ae likely em-

poay. Five-yea aveage moo ou ee empoay up a ow i

e aa. Flucuaio i labou make peomace i e o u oul,

iee, be ue wi cauio ice mo likely i oe o epee a acual

e bu ae a empoay eviaio.


17/90



1 Index o Labour Market

Perormance

Te Iex o Labou Make Peomace povie a oveview o eac

juiicio oveall labou make peomace, a meaue by e ve

iicao: [1] aveage oal employme gow, [2] aveage pivae-eco

employme gow, [3] aveage uemployme ae, [4] aveage uaio

o uemployme, a [5] aveage labou pouciviy. Eac compoe

wa weige equally i e iex (o a ecipio o e meoology, ee

Appeix A: Meoology, p. 54).

General observations

Albea labou make peomace pu i a e op o e li o Caaia

povice a US ae ove e la ve yea (gue 1). Te povice

og peomace i oal employme gow (ake 1st ou o 60 jui-

icio), employme gow i e pivae eco (ake 1st), low uaio

o uemployme (ake 2nd), a aveage uemployme ae (ake 6th)

eable i o acieve e ige oveall coe o 9.0 ou o 10.

I e Uie Sae, ae i e We a e Miwe omiae

e op o e akig: ee ae om e WeAlaka, Ua, a Wyo-

miga wo om e MiweNo Dakoa, a Sou Dakoawee

amog e op 10.5 Tee Caaia povice beie Albea ae i e op

5 Tougou i uy, US ae ae oe goupe io geogapical egio. Deiio

o ee geogapical egio come om e Uie Sae Ceu Bueau Geographic

Areas Reerence Manual(US Dep o Commece, Bueau o e Ceu, 1994). I i

maual, e Uie Sae i ivie io ou majo egio: We, Miwe, Noea,

a Sou. Eac o ee egio i ue ubivie. Te We coi o e Pacic

egio (Alaka, Hawaii, Waigo, Oego, a Calioia) a e Mouai egio

(Iao, Moaa, Wyomig, Nevaa, Ua, Coloao, Aizoa, a New Mexico).

Te Miwe coi o e We No Ceal egio (No Dakoa, Sou Dakoa,Mieoa, Nebaka, Iowa, Kaa, a Mioui) a e Ea No Ceal egio

(Wicoi, Illioi , Iiaa, Oio, a Miciga). Te Ea No Ceal goup o ae

i oe eee o a e Iuial Bel; e wo em ae ue iecageably oug-

ou e uy. Te Noea egio coi o e New Egla egio (Maie, Vemo,

New Hampie, Maacue, Coecicu, a Roe Ila) a e Mile Alaic

egio (New Yok, New Jeey, a Peylvaia). Te Sou coi o e We Sou

Ceal egio (Oklaoma, exa, Akaa, a Louiiaa), e Ea Sou Ceal egio


18/90



Figure : Index of Labour Market Performance,

Source: Fraser Institute, .

MichiganIndiana

Rhode IslandMississippi

AlabamaSouth Carolina

West VirginiaOhio

GeorgiaMissouri

FloridaCalifornia

WisconsinNorth Carolina

NevadaMaineIllinois

New JerseyKentucky

PennsylvaniaTennessee

New MexicoArkansas

Prince Edward IslandDelaware

IdahoOregon

NewfoundlandMinnesota

New YorkMassachusetts

OklahomaNew Hampshire

MarylandHawaii

ConnecticutVermontNova Scotia

MontanaKansas

OntarioNew Brunswick

NebraskaLouisiana

IowaColorado

ArizonaVirginia

QuebecWashington

UtahTexas

South DakotaWyoming

British ColumbiaNorth Dakota

ManitobaAlaska

SaskatchewanAlberta

Score (out of )

9.08.47.37.27.27.0

7.06.76.56.46.15.85.85.75.75.55.55.55.55.55.45.4

5.45.45.35.35.35.35.35.25.25.15.15.15.04.94.94.74.74.74.54.44.44.34.24.24.24.23.93.93.93.73.63.63.53.33.33.23.11.3


19/90



10, Sakacewa (2nd), Maioba (ie wi No Dakoa o 4th place),

a Bii Columbia (ie wi Wyomig o 6th place). Newoula

a Pice Ewa Ila ake e lowe amog Caaia povice,

akig 32nd a 36th, epecively. Te emaiig ou Caaia povice

coe ju ove 5.0, wi akig agig om 12th place (Quebec) o 21st

(Nova Scoia).

Fou o e Miwee ae (Mioui, Oio, Iiaa, a Mic-

iga) wee amog e boom 12 juiicio (ee ae wee ie o

e 49th place), a wee ix Soue ae (Floia, Geogia, We Vigiia,

Sou Caolia, Alabama, a Miiippi), oe ae om e Noea

egio (Roe Ila) a oe ae om e We (Calioia). Miciga

a e wo labou make peomace ou o e 60 juiicio, av-

ig a coe o 1.3.

Te ollowig ecio examie eac o e compoe o e Iex

o Labou Make Peomace i geae eail.

Indicator 1 Average total employment growth

Iicao 1 meaue e aveage gow ae o oal employme o eac

juiicio om 2006 o 2010. oal employme iclue ull-ime a pa-

ime employme i e pivae (buie a o-po), el-employme,

a public (goveme) eco o e ecoomy.6

Observations

Albea, Sakacewa, a Bii Columbia op e li o Caaia pov-

ice a US ae wi a aveage oal employme gow ae agig

om 2.0% i Albea o 1.5% i Bii Columbia ove e la ve yea.

Maioba, exa, a Quebec ollow wi a aveage employme gow

o 1.3%, 1.1% a 1.1%, epecively. O e op 10, ee ae US ae. wo

ae ae om e We (Aizoa, a Waigo) a oe ae i om

e Sou (exa).

Te Caaia povice wee iibue i e op 20 o e akig:

eve povice ake i e op 10 o all juiicio, wile e emaiig

ee wee i e op 20. Oaio a Pice Ewa Ila ae ie o 8th

place, ollowe by Newoula, akig 13th. Te lowe-ake Caaia

povice wee Nova Scoia a New Buwick, ie o 15 place.

(Keucky, eeee, Miiippi, a Alabama), a e Sou Alaic egio (Mayla,

Delawae, We Vigiia, Vigiia, No Caolia, Sou Caolia, Geogia, a Floia).

6 Tee i a mall ieece bewee e Caaia a US eiio o employable:

Caaa abulae employme aa o oe o age 15 a above wile e Uie Sae

compile employme aa o oe age 16 a above.


20/90



Indicator : Average total employment growth (%),

-. -. -. -. -. . . . . . .

MichiganWest Virginia

IndianaDelawareAlabama

Rhode IslandMissouri

OhioCalifornia

MississippiHawaii

GeorgiaWisconsin

PennsylvaniaNew Jersey

MarylandMaine

North CarolinaNevada

ArkansasNew York

FloridaIllinoisIdaho

TennesseeNebraskaMontana

MinnesotaMassachusetts

LouisianaKentucky

South CarolinaOklahoma

ColoradoVermont

New HampshireKansasIowa

ConnecticutNew Mexico

WyomingSouth Dakota

OregonUtah

Nova ScotiaNew Brunswick

VirginiaNewfoundland & Labrador

North DakotaAlaska

WashingtonPrince Edward Island

OntarioArizona

TexasQuebec

ManitobaBritish Columbia

SaskatchewanAlberta

Percent

2.01.61.51.31.11.11.00.80.80.80.70.70.60.60.50.50.50.40.40.40.20.10.10.10.10.10.00.00.0

-0.1-0.1-0.1-0.1-0.1-0.1-0.1-0.2-0.2-0.3-0.3-0.4-0.4-0.4-0.5-0.5-0.6-0.6-0.6-0.7-0.7-0.7-0.8-0.8-0.9-0.9-1.2-1.3-1.4-1.4-2.3

Sources: Statistics Canada, a; US Dept of Labor, Bureau of Labor Statistics, b; calculations

by authors.


21/90



Te boom 12 akig (ee ae wee ie o 49th place) wee occu-

pie by ou ae om e Miwe (Oio, Mioui, Iiaa, a Miciga),

ve ae om e Sou (Geogia, Miiippi, Alabama, Delawae, a We

Vigiia), wo ae om e We (Hawaii, a Calioia), a oe ae om

e Noea (Roe Ila). Miciga place la, a ecoe a ecliig

oal employme ae o 2.3% o aveage ove e la ve yea.

Indicator 2 Average private-sector employment growth

A impoa apec i miig om e iicao o labou make pe-

omace: e aue o employme gow. oal employme gow oe

o eveal wee employme gow wa ive by gow i e public

o e pivae eco. Sog employme gow a i lagely uelle by e

public eco ca ave amul ecoomic coequece. Te eco iica-

o o labou make peomace meaue e aveage gow i pivae-

eco employme o eac juiicio om 2006 o 2010; gow i ee

a ew ull-ime a pa-ime pivae-eco employme.8

Observations

Albea le all juiicio wi a aveage o 2.3% gow i pivae-eco

employme ove e la ve yea. Sakacewa (1.9%), Alaka (1.4%), a

Bii Columbia (1.3%) ollowe. O e op 10 akig, ve ae US ae

(Alaka, No Dakoa, exa, Sou Dakoa, a Coloao).

Beie Albea, Sakacewa, a Bii Columbia, wo oe Ca-

aia povice wee i e op 10 o e akig (Maioba, a Quebec).

Te boom-ake Caaia povice wa Pice Ewa Ila wi pi-

vae eco-employme gow o 0.3%, akig 31st oveall. Te emaiig

ou Caaia povice a aveage gow ae agig bewee 0.1%

(Oaio) a 0.6% (Newoula).

Te boom 14 juiicio (ve ae wee ie o e 47th place)

wee ve Soue ae (Miiippi, Floia, Delawae, Alabama, a We

Vigiia), ou Wee ae (Nevaa, Iao, Calioia, a New Mexico),

ee Miwe ae (Oio, Iiaa, a Miciga), a wo om e No-

ea (Maie a Roe Ila). Miciga wa la, wi a eucio i pi-

vae employme o 2.3% o aveage uig e ve-yea peio. Eac o e

boom 14 juiicio aw a eceae i aveage pivae-eco employmeagig om 0.9% o 2.3%, o aveage, ove e la ve yea.

7 See Cleme e al., 2003 a well a e icuio o public-eco employme i e

ecio, Labou make caaceiic a egulaio, i i uy (p. __?).

8 I i iace a well, Caaa abulae employme aa o oe o age 15 a above

wile e Uie Sae compile employme aa o oe age 16 a above.


22/90



Indicator : Average private-sector employment growth (%),

-. -. -. -. -. . . . . . .

MichiganIndiana

Rhode IslandNew MexicoWest Virginia

AlabamaDelaware

OhioCalifornia

NevadaMississippi

MaineIdaho

FloridaGeorgia

ArkansasPennsylvania

NebraskaHawaii

MinnesotaWisconsinVirginia

New JerseyLouisiana

IowaOklahoma

MissouriSouth Carolina

Prince Edward IslandIllinois

North CarolinaMassachusetts

KansasConnecticut

OntarioNew Hampshire

KentuckyNew York

New BrunswickMontanaMarylandVermont

Nova ScotiaArizona

WyomingOregon

TennesseeNewfoundland & Labrador

WashingtonUtah

QuebecColorado

TexasSouth Dakota

ManitobaNorth Dakota

British ColumbiaAlaska

SaskatchewanAlberta

Percent

2.31.91.41.31.11.0

1.01.00.90.90.70.70.60.60.50.50.40.40.40.30.10.1

0.1-0.1-0.1-0.1-0.2-0.2-0.2-0.2-0.3-0.3-0.3-0.4-0.4-0.5-0.5-0.5-0.5-0.5-0.6-0.7-0.7-0.7-0.8-0.8-0.9-0.9-0.9-0.9-0.9-1.2-1.2-1.4-1.5-1.5-1.6-1.6-1.7-2.3

Sources: Statistics Canada, a; US Dept of Labor, Bureau of Labor Statistics, a; calculations

by authors.


23/90



Te elaioip bewee e eul o e iicao o labou ma-

ke peomace, aveage oal employme gow, a e eco iicao,

aveage pivae-eco employme gow, i oewoy. Seveal juiic-

io wee i e mi o aleig e ize o ei public eco uig e

peio aalyze. Tee i, eeoe, a ak coa bewee e wo iica-

o o oe juiicio. Fo example, Alaka aveage oal employme

gow wa 0.7% bu i pivae-eco employme gow wa 1.4%, ii-

caig a lage eucio i e ae public-eco employme. Similaly,

Coloao ecoe a aveage oal employme gow ae o 0.0% wile

aveagig 0.9% pivae-eco employme gow, agai iicaig a lage

eucio i e public eco. Vigiia a New Mexico ow e oppoie:

ecliig pivae-eco employme couple wi aveage oal employme

gow, iicaig a expaio i e public eco.

Indicator 3 Average unemployment rate

Iicao 3 eec e wo iicao i a a ecoomy a i uable

o geeae employme gow will alo, o a ceai exe, ave a ige

uemployme ae, aumig a eay ow o e ew ea o e wok-

oce. Iicao 3 meaue e ve-yea (20062010) aveage peceage o

ciize wo, oug acively eekig wok, wee uable o i.9

Some o e ieece ecoe bewee e Caaia povice a

e US ae ae ue o e ieece i e wo couie employme

iuace pogam.10 I geeal, Caaa a a moe geeou employme

iuace pogam a e Uie Sae becaue i povie ige bee,

o loge peio, o a geae peceage o i uemploye. Te eul,

o upiigly, i a Caaa e o ave ige aveage uemploy-

me ae.11

9 Ti yea, e R3 uemployme ae wa ue o e Caaia povice, iea o a

aiioal (i.e., ofcial) uemployme ae. R3 ale e ofcial Caaia ae o make

em compaable o e US uemployme ae. Eve oug e R3 uemployme

ae ae ligly lowe a e ofcial uemployme ae, e ieece i le a

oe peceage poi, o aveage, o Caaa.

10 Fo moe iomaio o e wo couie employme iuace yem, ee, oCaaa, a, o e Uie Sae,

.

11 I aiio, e Caaia goveme mae cage o e Employme Iuace

yem i 2000 a ae o e bee o woke i Alaic Caaa. A ieeig

cae uy oe by Ku a Riell (2006) pee e log-em eec o geeou

uemployme iuace i New Buwick a Maie. See Riell e al., 2006 o a

ummay o i ecical uy.


24/90



Indicator : Average unemployment rate (%),

Newfoundland & LabradorMichigan

Prince Edward IslandNevada

South CarolinaCalifornia

Rhode IslandMississippi

KentuckyOregon

OhioTennessee

North CarolinaNew Brunswick

Nova ScotiaIllinois

IndianaGeorgiaMissouri

FloridaAlaska

WashingtonQuebecOntarioArizona

New JerseyConnecticut

WisconsinNew York

MassachusettsPennsylvania

MaineArkansasAlabama

TexasColorado

West VirginiaMinnesota

DelawareNew Mexico

IdahoKansas

MarylandLouisiana

OklahomaVermont

British ColumbiaMontana

UtahVirginia

New HampshireIowa

WyomingHawaii

AlbertaManitoba

South DakotaSaskatchewan

NebraskaNorth Dakota

Percent

3.53.73.83.83.94.0

4.54.54.74.74.74.84.95.05.05.15.25.35.45.55.55.7

5.95.96.06.06.26.26.26.26.36.36.36.46.66.76.76.76.87.07.07.07.17.27.37.37.47.47.47.67.87.98.08.18.28.38.69.59.6

12.6

Sources: Statistics Canada, a; US Dept of Labor, Bureau of Labor Statistics, b; calculations

by authors.


25/90



Observations

No Dakoa ecoe e lowe aveage uemployme ae (3.5%) o e

la ve yea. All juiicio a ake i e op 11 (ee juiicio

wee ie o e 9th place) a aveage uemployme ae o 4.7% o le.

Sakacewa wa e ige-akig Caaia povice, placig 3rd ove-

all wi a aveage uemployme ae o 3.8%. Maioba (5th), Albea (6th),

a Bii Columbia (14th) wee e oly oe Caaia povice o ak

i e op al o all juiicio.12 Newoula & Labao ake la,

wi a aveage uemployme ae o 12.6%, a ae ove ee ime ige

a a o e op-ake Caaia povice, Sakacewa, a ealy

ou ime ige a a o op-ake No Dakoa.

Te Alaic povice eceive e lowe akig amog e Ca-

aia povice: Nova Scoia, a aveage ae o 7.3% (45th); New Buwick,

7.4% (47th); Pice Ewa Ila, 9.5% (58th); a Newoula & Labao,

a alig 12.6% (60th). Tee aveage ivege igicaly om e aveage

o e op 11 juiicio (4.2%) o eve e Caaia aveage (6.1%). A,

i ak coa, all e Noeae US ae boeig Alaic Caaa

excep Roe Ila a low aveage uemployme ae (6.6% o le) a

oe, New Hampie, wa i e op 11.

Indicator 4 Average duration o unemployment

Te ou iicao o labou make peomace, aveage uaio o

uemployme, i a ajuc o e peviou meaue. I i iee o ii-

cae e eveiy o uemployme: e labou make o wo juiicio

wi imila uemployme ae may ue iee poblem i e u-

aio o uemployme i aically iee. Ti iicao meaue e

peceage o e labou oce expeiecig uemployme o 27 week o

loge om 2006 o 2010.

Observations

Sakacewa ake , wi e lowe peceage o i uemploye

(9.2%) expeiecig uemployme o 27 week o loge. Te juiicio

akig eco ige wa Albea, wee 9.4% o e uemploye wee ou

12 A low uemployme ae i juiicio like Maioba (5th) may be e eul o e

emigaio o ei wokig-age populaio. Maioba (a 1.8%,) a e eco ige

egaive ae o e migaio i Caaa om 2005 o 2009. I a igica poio o a

povice wokig-age populaio i leavig, e i uemployme ae will appea o

be impove ice uemployme i meaue a e umbe o people lookig o wok

elaive o e oal labou oce. See e icuio o migaio i Appeix B (p. 55)

o moe eail.


26/90


27/90


28/90



Sakacewa wee e oly oe Caaia povice i e op al o e

akig, wi a aveage GDP pe woke o $120,175 a $111,988, epec-

ively. Pice Ewa Ila ake la amog e 60 juiicio wi a GDP

pe woke o $68,150, ju ove a al a o op-ake povice Albea

a le a al a o e op-ake juiicio, Delawae. oublig

o Caaia, eve o e boom 10 juiicio wee Caaia povice:

Oaio, Bii Columbia, Maioba, Quebec, New Buwick, Nova Scoia,

a Pice Ewa Ila. Oveall, US ae ou-peome Caaia pov-

ice o labou pouciviy.


29/90



Indicator : Average GDP per worker (CA$ ),

, , , , , , ,

Prince Edward IslandNova Scotia

New BrunswickQuebec

ManitobaBritish Columbia

MontanaVermont

OntarioIdahoMaine

ArkansasMississippi

West VirginiaAlabama

South CarolinaNorth Dakota

KentuckyOklahoma

New MexicoUtah

New HampshireWisconsin

MissouriSouth Dakota

IowaKansas

MichiganOhio

IndianaNebraska

TennesseeFlorida

ArizonaPennsylvania

GeorgiaRhode Island

OregonSaskatchewan

MinnesotaColorado

North CarolinaMaryland

Newfoundland & LabradorTexas

WashingtonVirginiaIllinois

LouisianaAlbertaHawaii

NevadaMassachusettsCalifornia

New JerseyWyomingNew York

AlaskaConnecticut

Delaware

CA$

174,362156,721154,438147,346138,359137,290

135,638134,397130,391129,468127,391127,007125,524125,041122,903122,640120,175118,481116,621115,930114,046111,988

110,811110,363109,842109,683108,949107,918107,027106,692106,638104,801104,182103,947102,751102,150101,878101,233101,174101,099100,980100,750

99,93199,44499,19499,07093,70893,43193,03092,81891,33290,81188,54288,05686,73982,90578,71477,12175,69668,150

Sources: Statistics Canada, b; a; US Dept of Commerce, Bureau of Economic Analysis, a; US

Dept of Labor, Bureau of Labor Statistics, b; calculations by authors.


30/90



Summary o provincial and state rankings (out o 60), labour market perormance

Index o

Labour Market

Perormance,

2010

Average total

employment

growth,

20062010

Average private

employment

growth,

20062010

Average

unemployment

rate,

20062010

Average

duration o

unemployment,

20062010

Average GDP

per worker,

20052009

Rank Score Rank % Rank % Rank % Rank % Rank CA$

Alberta . . . . . ,

British Columbia . . . . . ,

Manitoba . . . . . ,

New Brunswick . . . . . ,

Nd & Labrador . . . . . ,

Nova Scotia . . . . . ,

Ontario . . . . . ,

Prince Edward Is. . . . . . ,

Quebec . . . . . ,

Saskatchewan . . . . . ,

Alabama . . . . . ,

Alaska . . . . . ,

Arizona . . . . . ,

Arkansas . . . . . ,

Caliornia . . . . . ,

Colorado . . . . . ,

Connecticut . . . . . ,

Delaware . . . . . ,

Florida . . . . . ,

Georgia . . . . . ,

Hawaii . . . . . ,

Idaho . . . . . ,

Illinois . . . . . ,

Indiana . . . . . ,

Iowa . . . . . ,

Kansas . . . . . ,

Kentucky . . . . . ,

Louisiana . . . . . ,

Maine . . . . . ,

Maryland . . . . . ,


31/90



Summary (contd) o provincial and state rankings (out o 60), labour market perormance

Index o

Labour Market

Perormance,

2010

Average total

employment

growth,

20062010

Average private

employment

growth,

20062010

Average

unemployment

rate,

20062010

Average

duration o

unemployment,

20062010

Average GDP

per worker,

20052009

Rank Score Rank % Rank % Rank % Rank % Rank CA$

Massachusetts . . . . . ,

Michigan . . . . . ,

Minnesota . . . . . ,

Mississippi . . . . . ,

Missouri . . . . . ,

Montana . . . . . ,

Nebraska . . . . . ,

Nevada . . . . . ,

New Hampshire . . . . . ,

New Jersey . . . . . ,

New Mexico . . . . . ,

New York . . . . . ,

North Carolina . . . . . ,

North Dakota . . . . . ,

Ohio . . . . . ,

Oklahoma . . . . . ,

Oregon . . . . . ,

Pennsylvania . . . . . ,

Rhode Island . . . . . ,

South Carolina . . . . . ,

South Dakota . . . . . ,

Tennessee . . . . . ,

Texas . . . . . ,

Utah . . . . . ,

Vermont . . . . . ,

Virginia . . . . . ,

Washington . . . . . ,

West Virginia . . . . . ,

Wisconsin . . . . . ,

Wyoming . . . . . ,

Source: Fraser Institute, .


32/90



2 Labour market characteristics

and regulation

Te eco ecio o i uy meaue key caaceiic a egula-

io a aec labou make peomace i eac o e 60 juiicio:

(1) aveage public-eco employme a a peceage o oal employme;

(2) aveage miimum wage a a peceage o wage a alaie; (3) ave-

age uioize employme a a peceage o oal employme; a (4) a

empiical compaio o labou elaio law. Tee i ubaial eviece,

a we will ow i i ecio, a eac o ee caaceiic iuece

e peomace o labou make. I i o upiig, eeoe, o a

juiicio wi uavouable labou make caaceiic a egulaio

alo ave a labou make a peom pooly.

Characteristic 1 Public-sector employment

Te pli bewee pivae-eco a public-eco employme16 i a impo-

a apec o labou make peomace a e iceive, pouciviy, a

peomace o labou i e pivae eco ae iee om a i e pub-

lic eco (Cleme e al., 2007; Cleme a Email, 2002a, 2002b; Cleme

e al., 2003). Oe key ieece bewee e public a pivae eco i ei

objecive. I a ciical uy publie i e peigiouJournal o Economic

Literature, poeo Meggio a Nee (2001) ou a a key ie-

ece bewee e wo eco i a goveme ae peoccupie wi ul-

llig ocial goal a objecive ae a puuig ecoomic o buie

objecive. I e public eco, poliical peue oe eul i eouce

goig o pojec a ae o i e be iee o mo woke. I aiio,

Meggio a Nee ou a goveme buiee e o evelop

wi le capial a u ae moe labou-ieive a ei couepa

i e pivae eco. Elic e al. (1994) alo ou eviece a gove-

me eiie e o evelop wi le capial, wic, i u, lea o lowe

pouciviy.1 Lowe labou pouciviy i o paicula coce a eeac

16 Public-eco employme i meaue a e oal umbe o goveme employee

plu employee o goveme buie eepie (GBE). Daa o e US ae exclu-

ig GBE employme ae o available.

17 Elic e al. (1994) ou a a i om ae o ull pivae oweip ca iceae

e log-em aual ae o oal aco pouciviy (FP) by 1.6% o 2.0% a euce

e ae o ui co by 1.7% o 1.9%. (oal Faco Pouciviy ee o e aggegae


33/90



ow a public-eco employee e o be pai a wage pemium elaive

o ei pivae-eco couepa (Boja, 2002; Bee, 2003; Ewa,

2006; a eauy Boa o Caaa, 2007).

Aoe impoa ieeceoe a paiculaly aec m

iceive a coume picei a goveme eiie e o ope-

ae i a moopoly eviome a peclue compeiio, weea e bui-

ee o e pivae eco omally opeae i igly compeiive make.

Te moopoliic eviome wii wic e public eco geeally ope-

ae eul i igicaly imiie peue o eve coume, eac o

make ema, a oe compeiive pice. I ac, e geeal caac-

eiic o a moopoly ae poo cuome evice, lowe qualiy pouc,

a ige pice.

Aoe ieece bewee e wo eco i buge coai,

wic Hava ecoomi Joa Koai (1992) ieie a oe o e majo

a ucageable ieece bewee pivae-eco buie eepie

a goveme. Goveme buge coai ae o, ice i i impo-

ible o e goveme o go bakup, weea buge coai i e

pivae eco ae a, ice loe lea o a eceae i capial a ulim-

aely o bakupcy. Te eal ik o ailue a bakupcy oce e pivae

eco o eac o coume ema a peeece a o allocae capial

efciely o maximize eu. Te public eco, wi a oe buge a

o ik o bakupcy, ace o uc compeiive peue.

Reeac ow a a lage public eco lea o pooe oucome

i e labou make a, moe boaly, o pooe ecoomic peomace.

Fo example, Gylao e al. (2001), wo examie 34 couie om 1972

o 1992, ou a iveme (a key ive o pouciviy) a ecoomic

gow wee iveely elae o e ize o e ae-eepie eco (mea-

ue by goveme employme a a ae o oal employme). A uy by

Ya Alga a i colleague (2002) meaue e impac o public-eco

employme o uemployme i 17 OECD couie om 1960 o 2000.

Te auo ou a, o aveage, e ceaio o 100 public-eco job may

ave elimiae abou 150 pivae-eco job a iceae by abou 33 e

umbe o uemploye woke. Tey alo ou eviece a public-eco

employme eceae paicipaio i e labou make.18 Moe ecely,

efciecy wi wic people a capial ae combie o pouce oupu.) I aiio,

Joe a Mygi (2002) ou a, i Eoia, pivae oweip i 13% o 22% moeefcie a ae oweip. Heaez e Co e al. (2004) ou, uig aa o Spa-

i mauacuig m om 1983 o 1996, a public oweip a a egaive impac

o efciecy a a compeiio a a poiive impac o a m peomace. Simi-

laly, Boubaki e al. (2004) ou a pivaizaio iceae pouciviy, efciecy, a

oupu i ome ae-owe m i Aia.

18 Demeka a Koolemi (2000) cocu. Tey ou a Geece amaic iceae i

public-eco employme i e 1970 a 1980 wa ogly aociae wi ige

ae o uemployme. He e al. (2007) ou imila eul o Euope.


34/90



Felma (2006) examie e elaioip bewee e ize o e gove-

me moe boaly a e uemployme ae o 19 iuial couie

o e peio 1985 o 2002. He ou a a iceae i e ize o gove-

me lea o a iceae i uemployme ae.

Caaceiic 1 i a meaue o e aio bewee oal employme i

eac povice o ae a public-eco employme, bo iecly i gov-

eme a well a i goveme buie eepie. Noe a i uy

ue wo meaue: e exclue eeal employee (icluig gove-

me buie eepie a e eeal level) wile e eco iclue em.

Te eao o e wo meaue i a povicial a ae goveme ave

lile, i ay, cool ove e locaio o eeal employee bu e peece o

uc employee, a u o e lage public eco i e juiicio, will

iuece e peomace o e labou make.

Observations

O e meaue, wic exclue eeal employee a cou oly

public-eco employme a e povicial/ae level (caaceiic 1a),

Peylvaia op e li o Caaia povice a US ae wi e low-

e peceage o i employme i e public eco (9.4%). Rouig ou e

op 10 akig ae ee Noeae ae (Roe Ila, Maacue,

a New Hampie), ou Miwee ae (Mioui, Iiaa, Miciga,

a Illioi), a wo Wee ae (Nevaa a Coloao).

Albea wa e ige-ake Caaia povice: i ake 44th wi

14.5% o i oal employme epeee by e public eco. Bii Colum-

bia ollowe Albea cloely, akig 46th place wi 15.3% o i employme

i e public eco. Newoula occupie e la poiio, wi public-

eco employme epeeig 25.6% o i oal employme, ealy iple

e ae o op-ake Peylvaia. Seve o e boom 10 juiicio wee

Caaia povice: Pice Ewa Ila, Quebec, New Buwick, Nova

Scoia, Maioba, Sakacewa, a Newoula & Labao. Oaio

ake 48thie wi Miiippi a We Vigiia.

Te icluio o eeal employee i o, geeally, iuece e

akig o ay gea exe, aloug ee ae ome ieeig cage

we ey ae ae (caaceiic 1b). Peylvaia eaie e op po-

iio wi e lowe level o employme i e public eco (11.5 %). Tee

wee oly wo cage o e li o juiicio i e op 11 (we e-

eal employee ae ae, wo juiicio ae ie o e 10th place) aoe cage o e li o juiicio i e boom 10 akig ae e

icluio o eeal employee, aloug e akig o mo juiicio

cage ligly.

Wi e icluio o eeal employee, Albea emaie e op-

ake Caaia povice bu move up o e 31st poiio oveall wi

15.6% o i employme i e public eco. Te eco-ake Caaia

juiicio, Bii Columbia, move up a well o 42nd oveall wi 17.2%


35/90



Characteristic a: Average provincial/state and local government employment

as a percentage of total employment,

Newfoundland & LabradorSaskatchewan

ManitobaNova Scotia

New BrunswickQuebec

Prince Edward Island

WyomingAlaska

New MexicoWest Virginia

OntarioMississippi

North DakotaBritish Columbia

New YorkAlbertaKansas

MontanaSouth Carolina

NebraskaArkansasLouisiana

IowaIdaho

OklahomaKentucky

North CarolinaAlabama

WashingtonUtah

HawaiiNew Jersey

DelawareGeorgia

TexasMarylandCalifornia

Arizona

ConnecticutVermontOregon

MinnesotaOhio

TennesseeWisconsin

VirginiaMaine

South DakotaFloridaIllinois

MichiganIndiana

New HampshireMassachusetts

ColoradoMissouri

Rhode IslandNevada

Pennsylvania

Percentage of total employment

Sources: Statistics Canada, d; US Dept of Labor, Bureau of Labor Statistics, a; calculations

by authors.

9.410.110.510.610.7

10.710.710.810.811.111.311.311.411.511.511.611.711.811.811.812.0

12.112.312.412.412.512.612.713.013.013.013.213.213.313.313.413.4

13.413.713.914.014.114.414.514.715.315.416.216.216.217.117.817.9

19.319.620.221.222.925.025.6


36/90



Characteristic b: Average federal, provincial/state, and local government

employment as a percentage of total employment,

Newfoundland & LabradorManitoba

SaskatchewanPrince Edward Island

Nova ScotiaNew Brunswick

Alaska

New MexicoMaryland

QuebecWyoming

West VirginiaOntarioVirginia

MississippiNorth Dakota

HawaiiOklahoma

British ColumbiaAlabamaNew YorkMontana

Kansas

UtahSouth Carolina

WashingtonNebraskaKentuckyArkansas

AlbertaIdaho

North CarolinaGeorgia

LouisianaIowa

DelawareNew Jersey

TexasCalifornia

TennesseeSouth Dakota

ArizonaVermont

MaineOhio

ConnecticutOregonFlorida

ColoradoMinnesota

IllinoisRhode Island

WisconsinNew Hampshire

IndianaMissouri

MichiganMassachusetts

NevadaPennsylvania


Sources: Statistics Canada, d; US Dept of Labor, Bureau of Labor Statistics, a; calculations

by authors.

11.511.712.212.412.412.612.712.812.913.113.113.213.313.313.613.613.713.914.114.114.114.214.414.614.714.915.215.315.315.515.615.715.715.815.916.316.4

16.516.516.516.617.217.618.318.518.818.919.019.820.221.722.023.2

23.323.725.626.127.227.329.0


37/90



o i employme i e public eco. Seve Caaia povice wee agai

ou amog e boom 10: Quebec, New Buwick, Nova Scoia, Pice

Ewa Ila, Sakacewa, Maioba, a Newoula & Labao.

Five Caaia poviceNova Scoia, Pice Ewa Ila, Sakacewa,

Maioba, a Newoula & Labaoa public eco a coi-

ue ove oe-quae o ei employme.

Characteristic 2 Minimum wages

Miimum-wage law eabli e lowe level o ouly pay a employ-

e mu legally pay woke. Miimum wage ave bee ow o euce

employme oppouiie o youg a ukille woke by eicig e

abiliy o employe a employee o egoiae muually beecial coac.

I paicula, miimum-wage legilaio ie low-kille woke a ew

wokoce ea om egoiaig o employme ey mig oewie

accep (Law, 1998; Pala, 2000).19 A lage boy o empiical eeac ocu-

me e avee eec o ig a iceaig miimum wage, wic

iclue a eucio i employme.20Neumak a Wace (2007) eviewe

ove 100 uie coveig 20 couie ove e pa 15 yea a coclue

a e va majoiy o uie, epecially e mo ceible, coiely

ow a iceae i e miimum wage ave egaive employme eec,

paiculaly o youge woke. Aoe uy by Moley Gueo (2005)

eviewe 23 Caaia uie o e eec o e miimum wage a co-

clue a oveall, e Caaia uieepecially e mo ceible a

eceou a a 10% iceae i e miimum wage lea o employme

o ee beig euce by 3% o 6%.21Reeac alo ow a, we miimum wage ie, employe oe

ewe ige bee a euce o-e-job aiig (Neumak a Wace,

2001; Bake, 2005).22 I oe wo, a iceae i icome om ige mi-

imum wage may be oe by eucio i oe ype o icome uc a

bee a aiig. Deceaig o-e-job aiig i a eiou poblem

19 Some juiicio ieeiae bewee miimum wage o youge, ukille woke

a miimum wage o ole, moe kille woke.

20 Fo a eview o i eeac a oe ecoomic eec o miimum wage, ee Goi

a Velui, 2009; Kaabegovi a Velui, 2011.21 ee geeally ee o woke age 15 o 19. Howeve, umeou uie ave alo

ou a imila elaioip exi wi woke age 20 o 24 a, moe boaly, oe

age 15 o 24 (Goi a Velui, 2009).

22 Neumak a Wace ou a o youg woke i ei ealy 20, e eimae

eec iicae elaiciy o e iciece o omal aiig wi epec o e mi-

imum wage om abou 1 o 2, implyig izable eleeiou eec o miimum wage.

Moeove, ee i lile o o eviece a miimum wage aie e amou o aiig

obaie by woke (2001: 591).


38/90



give a eeac ow a i ype o kill evelopme i a impo-

a ive o youg a low-kille woke makig e aiio o ige

wage i e uue (Eve a Macpeo, 2003).

A ac abou miimum wage a i oe ovelooke i e age o

miimum-wage woke. Daa om Saiic Caaa (2011e) eveal a i

2010, 58.9% o all miimum-wage woke i Caaa wee bewee e age

o 15 a 24, o wic 85.7% live a ome wi amily. I i o upiig,

e, a ig miimum wage ae aociae wi ige cool-opou

ae, a e iceae i e miimum wage ecouage eeage woke o

leave cool i eac o employme. Fo example, Capli e al. (2003) co-

clue a ige miimum wage wee elae o euce cool eoll-

me amog eeage, paiculaly amog ue makig e aiio

om gae ie o gae 10.23

Aoe impoa ac oe ovelooke i a, o e va majo-

iy o woke, eaig e miimum wage i a empoay expeiece. Mo

miimum-wage eae ae ew ea o e labou oce wo ae yig

o gai kill i oe o ea ige wage o ae wokig wile aeig

cool. Reeac ow ee ae vey ew woke wo emai i miimum-

wage job yea ove yea. Fo example, Eve a Macpeo (2003) exam-

ie e mobiliy o miimum-wage eae i e Uie Sae om 1979

o 1999 a ou a almo oe-al (47.2%) o miimum-wage woke

epoe eaig moe a e miimum wage ae oe yea.24

Te Caaia eeac o icome mobiliy o low-icome woke

cooboae ee ig.25 Fo example, Moiee a Dole (2000)

ou a, o oe eaig low icome i e peio om 1993 o 1996,

64% wee o loge eaig low wage a yea ae ey bega wok a, ae

wo yea, up o 78% wee o loge oig o. Oe uie om Saiic

Caaa (2009; 2010) eac e ame cocluio. Tey ow a, o oe

wo wee low icome eae uig e 2002 o 2007 peio, 60% ecape

low icome ae oe yea o employme, a 79% ae wo yea (Saiic

Caaa, 2009; 2010).

23 Tee ig ae come by a eie o uie om Neumak a Wace (1995a,

1995b, 1996, 2003) o e Uie Sae, a by Lao (1997) o Caaa.

24 Tee ig ae come by Smi a Vavicek (1992), Scille (1994), a Log

(1999). Fo example, Log (1999), examiig miimum-wage woke i e Uie

Sae om 1991 o 1995, ou a e majoiy (69.4%) o woke eaig miimumwage eae moe a e miimum wage ae oe yea o wok. Ae wo yea o

wok, 80.2% o ee woke eae moe a e miimum wage.

25 Tee uie ypically ue Low Icome Cu-o (LICO) a a meaue o low icome.

LICO ae compue by Saiic Caaa uig aa om e Suvey o Houeol

Speig a ae ee a e icome below wic a amily i likely o pe 20 pe-

ceage poi moe o i icome o oo, ele, a cloig a e aveage amily

(Saiic Caaa, 2009: 126).


39/90



I e e, miimum wage o o appea o euce povey. Fo

example, Sabia a Bukaue (2010) iveigae e wiely el pecep-

io a iceae i e miimum wage elpe e wokig poo. Tey ue

US aa om 2003 o 2007 uig wic 28 US ae iceae ei mi-

imum wage o a level above e eeal miimum wage, wic alo iceae

uig i peio. Te auo a iceae i ae a eeal mi-

imum wage i o euce e ae povey ae. Te eviece om Ca-

aa ow e oppoie o wa avocae o e miimum wage claim: e

miimum wage iceae ae a eceae povey. A uy publie

ealie i yea examie iceae i e miimum wage i ie Caaia

povice ove e wo ecae om 1981 o 2004 (Se e al., 2011). Te

auo ou a a 10% iceae i e miimum wage iceae povey

ae by 4.0% o 6.0%.

Aveage miimum wage a a peceage o aggegae wage a ala-

ie i obaie by calculaig e aual icome eae by omeoe wokig

a miimum wage a a aio o aggegae wage a alaie (i.e., icome) pe

woke. Compaig e icome eae by oe wokig o e miimum

wage o e aveage icome i eec gauge a juiicio abiliy o pay a

miimum wage. I oe wo, compaig miimum-wage icome o e

aveage icome povie a elaive meaue o ow ig miimum wage

ae elaive o oe juiicio. A e miimum wage gow elaive o

aveage icome, e age o employme coac a ca be egoiae

i euce a ecoomic peomace i eoe.26

Observations

New Yok ak : i miimum wage i 21.4% o aggegae wage a al-

aie pe woke i e ae. I oe wo, a ciize o New Yok eaig

e miimum wage woul ea le a a quae o e aveage aggegae

wage a alaie pe woke o e ae. Vigiia ak eco, ollowe

by New Jeey wi a miimum wage equivale o 22.4% a 23.1% o e

ae aveage aggegae wage a alaie pe woke. Te emaiig jui-

icio i e op 10 wee all US ae.

Pice Ewa Ila el e la poiio, akig 60th ou o e

60 Caaia a Ameica juiicio. Pice Ewa Ila miimum

wage epeee 45.5% o e povice aveage aggegae wage a ala-

ie pe woke. Woe ill o Caaia, ie o e boom 10 juiicio

wee Caaia: Newoula, Oaio, Bii Columbia, New Buwick,Quebec, Sakacewa, Maioba, Nova Scoia, a Pice Ewa Ila.

Albea wa e ige akig Caaia povice, occupyig 22nd place.

26 IMeasuring Labour Markets in Canada and the United States: 2010 Edition, miimum-

wage icome wa compue a a peceage o GDP pe woke becaue imely aa o

wage a alaie o e US ae wa o available.


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Characteristic : Average minimum wage as a percentage of aggregate wages

and salaries per worker,

Prince Edward IslandNova Scotia

ManitobaSaskatchewan

QuebecNew Brunswick

Vermont

British ColumbiaOntario

Newfoundland & LabradorOregon

MaineMontana

South DakotaIdaho

ArkansasIowa

WashingtonRhode Island

MississippiFlorida

West VirginiaNew Mexico

ArizonaMichigan

WisconsinOklahoma

North DakotaKentucky

HawaiiSouth Carolina

OhioUtah

MissouriNew Hampshire

AlabamaNorth Carolina

NebraskaAlberta

KansasIndiana

IllinoisCalifornia

TennesseeColorado

AlaskaPennsylvania

GeorgiaLouisiana

NevadaMinnesota

TexasWyomingDelawareMaryland

ConnecticutMassachusetts

New JerseyVirginia

New York

Percentage of aggregate salaries and wages per worker

Sources: Human Resources and Skills Dev. Canada, b; Statistics Canada, a; US Dept of Labor

Wage and Hour Division, ; US Dept of Labor, Bureau of Labor Statistics, b; calculations by authors.

21.422.423.123.323.4

23.523.624.124.424.925.125.226.026.026.426.426.426.626.626.826.8

27.227.227.227.327.327.427.728.328.428.528.628.728.728.829.029.2

29.530.130.230.430.831.331.431.531.832.733.433.933.936.937.137.2

37.639.041.341.442.342.745.5


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Characteristic 3 Unionization

Aoe impoa ucual eleme o labou make i uioizaio.

Uioizaio a bee emoae o impee e exibiliy o labou

make, a key aco eceay o goo labou make peomace. 2 Fo

example, a uy by Eliabea Magai a Davi Peice (2006) i e

Industrial and Labour Relations Review ou a uioizaio impee

labou make exibiliy by eicig e abiliy o employe o aju ipu

o ei buie o cagig make coiio.

Uioizaio a alo bee ow o aec a umbe o ecoomic

vaiable, icluig pouciviy. A lage boy o empiical eeac a co-

clue a uioize m ow lowe pouciviy gow, employme

ceaio, a poabiliy a o-uioize m (Becke a Ole,

1989; Maki a Meei, 1986; Log, 1993; Aio a Wage, 1993;

Lapoa a Jeki, 1996; Hic, 1997; Maki, 1983; Feema a Kleie,

1999; Vee a Gallaway, 2002a; Meeze-Filo, 1997).28 Fo example,

Hic (1997), i a majo eview o eeac o uioizaio, oe a e

eviece iicae a uio e o iceae wage, euce poabiliy,

a euce iveme i pyical capial a eeac a evelopme;

uio alo euce e gow o employme. Hic ecibe e wage

pemium a a ax o capial, wic eecively lowe e e ae o eu

o iveme.

Tee i a lage boy o eeac o e eec o uio o ive-

me, a ciical aco i iceaig labou pouciviy a, ulimaely, wok-

e wage. Fo example, Be e al. (2001), uig aa om 1968 o 1986

o 13 Caaia iuie, ou a uioizaio ae a a avee

impac o eeac a evelopme peig: we a iuy move

om beig le o moe uioize (om 25th o 75th peceile), peig o

eeac a evelopme i peice o all by abou 40%. Coolly e al.

(1986) alo ou a uioizaio euce eu, a u peig, o

eeac a evelopme. Similaly, Mecal (2003) compae e pouciv-

iy o uioize labou i e Uie Sae, Caaa, Uie Kigom, Japa,

Gemay, a Aualia. He ou a uioizaio euce iveme by

oe compae o e iveme ae i a o-uio wokplace i No

Ameica a pa o Euope. Fag a Heywoo (2006) examie e impac

uioizaio a o pla cloue i Caaa om 1999 o 2001. Tey ou

a ige pla-level uioizaio ae le o ige pobabiliy o a pla

27 A ee i e uy ioucio, labou make exibiliy ee o e eae wi

wic woke a employe alike ae able o aju ei eo give cage i e

makeplace.

28 I ac, ome uie ave coclue a uioizaio egaively aec pouciviy

(Clak, 1984; Hic, 1991a).


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cloig ove i peio. I a ece uy, Lee a Ma (2009) eimae e

impac o ew uioizaio (i.e., elecio wi) o m equiy value uig

US aa om 1961 o 1999. Tey ou a e eec o uioizaio (i.e.,

elecio wi) o ock-make eu i egaive 10%, abou $40,500 pe

uioize woke.

I a lage eview o e colaly eeac, Ai a zaao (2002)

cooboae e ig o oe uie. Te auo coclue a uio

membe a oe woke covee by collecive ageeme eceive, o

aveage, wage pemium ove ei o-uioize couepa i evelope

a evelopig couie. Fuemoe, e eeace oe a e

po, iveme ae (pyical capial), a peig o eeac a

evelopme e o be lowe i uioize a i o-uioize m,

eve oug uioize m e o aop ew ecology a a a o-

uioize m.

Empiical eeac alo iicae a ig ae o uioizaio ae

aociae wi pooe peomace o e labou make (Rama, 2003). Kol

a Svoy (2007) examie e elaioip bewee labou make pe-

omace a uioizaio i e ve yea ae e 1982 a 1991 ece-

io i e Uie Sae. Te auo ou a e US ae wi ig

level o uioizaio a lowe level o employme gow ae ece-

io. Tey alo ou a e US Rig-o-Wok aeoe a pe-

mi woke o cooe wee o o ey will joi a acially uppo

a uioecovee ae.29 Similaly, Vee a Gallaway (2002a) ou

a uemployme a e aio o employme o populaio ae aveely

aece by uio. Tey alo oe a, wile i i ue a ome iivi-

ual woke ave beee om uio, e aggegae impac o uio i

ogly egaive. I i clea a uio geeally euce labou make ex-

ibiliy a pouciviy, a aveely aec e oveall efciecy o labou

make. I i ciical, eeoe, o meaue e exe o uioizaio, i bo

e public a pivae eco.

Caaceiic 3 o labou make, uioizaio, meaue e pe-

ceage o oal employme epeee by uioize employme, o ave-

age, bewee 2006 a 2010.30

29 Rig-o-Wok (RW) ee o labou legilaio a eeially peclue maaoy

uio membeip a maaoy payme o uio ue. Tee ae 22 RW ae:Alabama, Aizoa, Akaa, Floia, Geogia, Iao, Iowa, Kaa, Louiiaa, Mii-

ippi, Nebaka, Nevaa, No Caolia, No Dakoa, Oklaoma, Sou Caolia,

Sou Dakoa, eeee, exa, Ua, Vigiia, a Wyomig. RW ae ae gee-

ally locae i e Sou, e Miwe, a e Souwe excluig Calioia. Tee ae

o RW ae i e Noea o i e iuial bel uouig Miciga.

30 Fo i caaceiic, oal employme i ee a e um o pivae a public

employme. Sel-employme i exclue.


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Observations

No Caolia a e lowe aio o uioize woke o oal employ-

me: 4.5% o i employe woke ae uioize. Vigiia ak eco,

wi 5.2% o i employme uioize. Soue US ae (No Caolia,

Vigiia, Geogia, Sou Caolia, Akaa, exa, Louiiaa, eeee,

Floia, a Miiippi) occupie 10 o e op 11 akig (wo ae ae

ie o e 10th place). Te Rig-o-Wok ae wee a e op o e ak-

ig, occupyig all o e op 11 poiio a 18 o e op 20.

Te op-ake Caaia povice wa Albeaailig a 49th wi

24.5% o i employme uioize. Albea peome bee a oly wo

US ae: Hawaii a New Yok. Caaia povice occupie e boom

ie poiio. Quebec wa i la place: 39.7% o i employme i uioize.

Pa o e explaaio o e Caaia povice poo owig i coaie

i e labou-make caaceiic: e peceage o woke employe

by e public eco. Tee i a muc oge icliaio owa uioiza-

io i e public eco a ee i i e pivae eco.31 Fo example, i

2010, 74.9% o e public eco wa uioize i Caaa bu oly 17.5% o

e pivae eco (Saiic Caaa, 2011a).32 I coa, i e Uie Sae,

40.0% o e public eco wa uioize bu oly 7.7% o e pivae eco

(Hic a Macpeo, 2011). Caaa popoioally lage public eco,

eeoe, coibue o e ige ae o uioizaio obeve ee.33

Aoe impoa coibuig aco o e ieece bewee Ca-

aia a Ameica uioizaio ae i a cloe-op uio ae legally

allowe i all Caaia povice bu i oe o e US ae. Cloe-op

uio ae ceae by collecive bagaiig ageeme a equie woke

o joi a uio o bagaiig age a pay ull uio ue a a coiio o

employme (ee Caaceiic 4 o ue iomaio). I oe wo,

iiviual wiig o wok a a uioize compay i Caaia povice

ca be equie o joi e uio a pay ull uio ue. A umbe o u-

ie ave uggee a e ieece i e coice aoe woke i e

wo couie accou o ome o e obeve ieece i uioizaio

(Cleme e al., 2005).

31 Public-eco uio e o be ucue wi iee ule a u beave ieely

om ei pivae-eco couepa. Fo ue iomaio, ee Ciee, 1980.

Alo, pivae-eco uio, paiculaly i e Uie Sae, ave expeiece a eclie

i e la 30 yea; o a icuio o i eclie a i impac, ee Hic, 2008.32 Pivae-eco uioizaio age om a low o 8.5% i Pice Ewa Ila o a ig

o 25.1% i Quebec i 2010. Fo e ame yea, public-eco uioizaio age om

a low o 70.0% i New Buwick o 82.4% i Quebec (Saiic Caaa, 2011a).

33 Caaa oveall uioizaio ae i 2010 wa 31.5% compae o 13.1% i e Uie

Sae. Fo e ame yea, public-eco employme a a peceage o oal employme

wa 20.6% i Caaa a 15.8% i e Uie Sae. See Cleme e al., 2005 o a icu-

io o e aco explaiig e ieece i uioizaio bewee e wo couie.


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Characteristic : Average unionized employment as a percentage of total

employment,

QuebecNewfoundland & Labrador

ManitobaSaskatchewan

British ColumbiaPrince Edward Island

Nova Scotia

New BrunswickOntario

New YorkHawaii

AlbertaAlaska

WashingtonNew Jersey

MichiganCalifornia

NevadaConnecticut

Rhode IslandIllinois

OregonMinnesota

MassachusettsPennsylvania

WisconsinWest Virginia

MontanaOhio

MarylandMaine

IowaVermont

IndianaDelaware

New HampshireMissouri

New MexicoAlabama

NebraskaKentuckyWyoming

ArizonaKansas

ColoradoNorth Dakota

OklahomaIdahoUtah

MississippiFlorida

South DakotaTennessee

LouisianaTexas

ArkansasSouth Carolina

GeorgiaVirginia

North Carolina


Sources: Statistics Canada, a; Hirsch and Macpherson, ; calculations by authors.

4.55.25.35.56.06.06.36.46.97.17.17.37.67.78.58.78.89.09.0

10.510.6

10.910.911.711.812.812.813.113.413.714.215.315.415.515.715.916.0

16.516.716.917.117.417.418.219.619.821.324.324.524.726.327.928.7

29.431.131.535.637.138.339.7


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Characteristic 4 Labour relations laws

Te al caaceiic o labou make i e exe o wic labou ela-

io law maiai a balace i e elaio amog employee, uio, a

employe a, moe boaly, eace e exibiliy o e labou make.

Ti iicao i bae o e Fae Iiue lage uy,Labour Relations

Laws in Canada and the United States: An Empirical Comparison (2009 Edi-

tion) (Kaabegovi e al., 2009). Ti meaue i iicaely elae o e pe-

viou meaue, ice e exe o wic labou make exibiliy i eace

by labou elaio law i igly coelae wi uioizaio level.

Balace a exibiliy i a labou make i cucial i poviig a

eviome a ecouage poucive ecoomic aciviy. Labou elaio

law a ae biae i avou o oe goup o aoe, o ae ovely pe-

cipive, iibi e pope ucioig o a labou make a u euce

i peomace. Empiical eeac iicae a igi labou elaio law

iceae uemployme a euce e paicipaio ae o e youg a

elely (Bieazl a Gwaey, 1998; Beola e al., 2002; Salvae, 1997).

Labou elaio law ave alo bee ow o aec iveme. Fo example,

oe uy by Moi Kleie a Hwikwo Ham (2002), uig aa om 20

OECD couie om 1985 o 1995 a all US ae om 1990 o 1999, ou

a moe pecipive labou elaio law wee aociae wi lowe level

o oeig iec iveme a lowe ecoomic gow o e US ae.

Caaceiic 4 evaluae labou elaio law i e pivae eco

o e 10 Caaia povice a 50 US ae bae o wee o o ey

ecouage exibiliy a coice by balacig e ee o employe a

employee. Labou elaio law ae goupe io ee aea: [1] ogaizig

a uio (ceicaio a eceicaio), [2] uio ecuiy, a [3] egulaio

o uioize m. Ti ecio alo pee e Iex o Labou Relaio

Law, a compoie meaue o labou elaio law o eac Caaia povice

a US ae. Ti oveall iex i bae o e coe o eac o e ee aea

o labou elaio law a povie a geeal aeme o a juiicio

appoac o elaio bewee woke a employe. I epee a meaue

o eac juiicio oveall labou elaio policy. Juiicio wi labou

elaio law a lea o a moe exible labou make eceive ige coe,

wile juiicio wi moe eicive appoace eceive lowe coe. A

coe o 10 oe o eceaily iicae a opimal e o labou elaio law,

a i i a elaive meaue o e egee o wic labou elaio legilaioeace exibiliy aco e 10 Caaia povice a 50 US ae.

Juiicioal auoiy ove e egulaio o labou elaio amog

employe, uio, a employee i Caaa ie gealy om a i e

Uie Sae. I Caaa, egulaio a eoceme o labou elaio

ae lagely ecealize; eac povice maiai i ow e o labou ela-

io law. I e Uie Sae, o e oe a, pivae-eco labou


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Characteristic : Index of Labour Relations Laws

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Measuring Labour Markets 2011

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