The Creation of a Shared Prosperity in Canada

This report documents how the growth of unions from the First World War to the mid 1970’s helped create a shared prosperity or “middle class” in Canada, which has been steadily shrinking with the rise of corporate power and the erosion of unions since the late 1970’s. It provides compelling empirical validation of the crucial role unions played in redistributing income from capital to labour (profits to wages) and from the upper to the lower parts of the income hierarchy. The report examines ways union renewal can play a crucial role in restoring middle class security and mass prosperity in Canada. The Rand Formula is a formula dating back to 1946 when a decision was made during an arbitration hearing by Justice Ivan Rand that union dues would be paid by all employees benefitting from the collective agreement, not just signed union members. This means the employer deducts the dues from all employee paychecks and then forwards those funds to the union. The Rand Formula prevents employees from benefitting from the work of the union, while not paying union dues.