Categories
Canada Pensions Workers

The pension fight: on the picket line or in regulations?

It’s relatively common knowledge that employer-run pensions have been scaled back over the past few decades. I’ve decided to dig some data on pensions for this post to see just how this has taken place in Canada, motivated by a just-released analysis of US pension reform that finds contradictions in how US workers have come to take on more and more of the risk for their retirement income.

First, a bit of background. There are two main kinds of employer-administered pension funds: defined benefit (DB) plans – where retirees receive a set monthly income, or defined benefit – and defined contribution (DC) plans – where retirees receive a variable monthly income dependent on how much they proportionately contributed to the pension plan and how this money was invested. There are also completely individualized retirement savings plans such as the RRSP, but these are essentially individuals investment accounts given preferential tax treatment. However, the link between RRSPs and DC plans is that they generally place investment risk on workers themselves; if whatever financial instrument the money is invested in suffers, retirement income also suffers.

While some employers have eliminated pensions altogether, many have restructured their pension plans. Here’s the Canadian data on registered pension plan membership, plotted as a percentage of employment:

Figure 1. Registered pension plan coverage as a percentage of employment by type of plan (Source: Statistics Canada, CANSIM 280-0008 and 282-0008).
Figure 1. Registered pension plan coverage as a percentage of employment by type of plan (Source: Statistics Canada, CANSIM 280-0008 and 282-0008).
Categories
Canada Class USA Workers

Working class disarmed, Canadian redux

Looking at the prevalence of strikes in the US over the past six decades, Doug Henwood writes,

Second Amendment fetishism aside, there’s an old saying that the working class’s ultimate weapon is withholding labor through slowdowns and strikes. By that measure, the U.S. working class has been effectively disarmed since the 1980s.

Doug then produces a graph showing a precipitous decline in the number of strikes in the US involving more than 1000 workers starting about three decades ago. Intrigued, two thoughts quickly crossed my mind. First, as is often the case, I wanted to see whether the same trend holds for Canada. Second, I was curious whether the decline had anything to do with the large scale of the strikes in the data Doug used.

Sure enough, the conclusions are (sadly) the expected ones: Canada exhibits the same trend and shows it to be one that is independent of the number of employees striking or locked out.

Figure 1. Work stoppages relative to employment: the number of person-days of work lost to stoppages (strikes and lockouts) divided by total employment. Source: CANSIM, FRED and BLS.
Figure 1. Work stoppages relative to employment: the number of person-days of work lost to stoppages (strikes and lockouts) divided by total employment. Source: CANSIM, FRED and BLS.