Speech by Ken Neumann
National Director, United Steelworkers
Public Policy Forum Conference on Canada's Labour Market Challenges
Ottawa, March 10, 2011

Training is a Critical Issue for Canada

Our union believes that skills development and training are critical for Canada's future. Canada's commitment currently is not what it needs to be. Globalization, new technology and demographics are driving the need to have more training. If we want to keep those high paying manufacturing jobs that are the backbone of the middle class - we need to invest in training - it is as simple as that.

The steel industry today is a good example of an industry that pays well and needs skilled workers. Steel today is very technologically advanced. Output today is the same as it was 10 years ago - but with 25% fewer workers. The Canadian steel industry is currently competitive globally - we used to export 30% of the steel made here - now it is well over 40%.

In the steel industry of today, skilled tradespeople and technicians make up the vast majority of the workforce. Thirty-seven per cent of our steel industry members are over 50. Forty per cent of skilled trades people are over 50.

The steel industry - and I believe all manufacturing - needs a long term strategy for skilled trades and technicians, and essential skills training - like literacy and numeracy. We believe that workers and job-seekers are eager for such training. We, in the trade union movement, have a key role to play as well. Employers and governments do as well.

Unfortunately there is not enough talk about skills training right now between trade unions and employers or governments. Instead, we're dealing with downsizing, attacks on wages, pensions, benefits, etc. So a good first step would be to ratchet down attacks on workers' rights and compensation.

A Positive Example: Canadian Steel Trade & Employment Congress (CSTEC)

I'd like to give you a positive example of the role a union can play - and that's a joint venture between the United Steelworkers and a number of steel companies, through CSTEC.

CSTEC was created 25 years ago to address training and labour adjustments need in the steel industry - it is a leader in this field. Through CSTEC we developed a national skilled trades strategy, with funding support from HRSDC.

Back 20 years ago - when new technologies meant a lot of job loss - we also did a lot of relocation training. This work has been essential to individual steelworkers and their families - but also to the economy and to society as a whole. Steel making - like most manufacturing - provides good, middle-class jobs. Our skilled trades strategy is paying off:

Already, 8 companies have recalled or hired about 200 apprentices. We're now in Phase 2 of the program, hoping to hire 100-150 apprentices.

Labour-Industry Cooperations are Important - But we need Government Support Too

With CSTEC we've shown labour and industry can cooperate, but we also need government support. This is particularly important given our industries are largely - or solely - foreign owned. Before making investments, global corporations look at the level of skill and education of the workforce, and the level of public support. So, for Canadian industry to secure our fair share of investment, we need to have strong, publicly supported, skills development programs.

Given our success with CSTEC, we believe this kind of cooperation can be successful outside the steel industry. More should be done to ensure our workforce is getting the training it needs to protect those middle class jobs.

So how do we make sure companies are investing in the skills of their workforce? Maybe before we approve a foreign investment, we ask to see a skills development plan. Maybe we implement a training levy on employers. Maybe there can be tax incentives for training.

We need our governments to be partners in leveraging private investment in training with public funding and incentives. We also need leadership from our governments to ensure the same opportunities for all Canadians, including aboriginals, and new Canadians.

A Healthy Middle Class Makes A Healthy Canada

While training to make sure our industry is competitive is an important labour market goal - it is not the only reason to train. One of the cornerstones of Canada's success story is the establishment and maintenance of our middle class.

I would argue that the existence of our middle class has created a dynamic economy, a stable liberal-democratic politic and an innovative cultural and entrepreneurial environment.

However, the dominance (and dare I say existence) of that middle class is under pressure in Canada like never before. I believe the largest challenge we face over the next decade is the growing disappearance of Canada's middle class.

Ensuring a highly skilled workforce is one way to help support the middle class - but something more is needed.

Collective Bargaining is Essential to our Middle Class

The emergence of very large transnational corporations with expansive operations and diverse sources of revenue, globalization and the changing nature of work, have all had a negative impact on collective bargaining in Canada.

Today, the traditional model of collective bargaining is now available to fewer workers, and in many cases is less effective than it used to be. The evidence is all around us. Union density in Canada has fallen to 30%, from nearly 40% in the 1980s.

Further, the fastest growing segments of the labour market are the service sector and those who self identify as self-employed. And an increasing percentage of those workers only have part-time employment.

In the private sector - union density is down to 17%.

This erosion of collective bargaining is at the heart of the declining middle class.

The recent battle between Vale and our members in Sudbury and Port Colborne, where the massively profitable Brazilian multinational demanded the slashing of the pension plan, the profit-sharing features and many of the seniority rights, was disgraceful. It is not unrelated that at the same time we are seeing collective bargaining being undermined we are also seeing a growing inequality in the labour markets.

The U.S. is ahead of Canada in this trend. The richest 1% in the U.S. account for 24% of the nation's income. The richest 20% control 84% of their wealth. However, that inequality is increasingly becoming the Canadian experience as well. Canada's richest 1% doubled their share of total national income in the last three decades, from 7.7% to 14%. Canada's richest 0.01% quintupled their share of income during the same period.

The bottom 80% of Canadian families with children have seen their share of income decline in the last generation. This trend should concern all Canadians.

Union Density is Healthy for the Economy

I know that some of you in the room might applaud the decline in union density - you might see unions as organizations that increase wages for those who don't deserve it and that interfere with the functioning of the market.

But as you would expect, I believe there is a more accurate way to view unions. I believe unions play a vital role in the functioning of a strong economy and a free and democratic society.

Unions help decrease inequality. Healthy wages for workers are essential to economic growth and increased demand. Unions also perform a number of socially important functions beyond negotiating better wages and benefits:

• we provide protection for workers from arbitrary dismissal and punishment.
• we play an essential role in workplace safety and occupational disease.

Without unions playing these roles there certainly would be a greater burden placed on government to ensure these protections. So one of the greatest labour market challenges we face going forward is the protection and expansion of collective bargaining.

Now, we in the labour movement certainly have our share of responsibility here. We need to become more nimble in order to find new ways to represent workers in a rapidly changing labour market.

We probably also have to learn to be effective in dealing with employers who face increased pressure from global competitors. In short, we too have to improve our ability to innovate.

Skills training to enable us to compete is important, and I thank you for inviting me to talk to about that. But competitiveness should not be our only labour market goal - income equality and a strong middle class should be an important objective too. This will require cooperation and work by unions, employers and government.

Without the active partnership of all three, in a truly Canadian regulatory framework, our workforce skills will erode and the inequality in our society will only increase.

Thank you.