Categorized | Housing Bubble

Why Unions are Bad – A Quebec Case Study

Unions are considered advantageous to the worker, since their main functions include pushing for higher worker’s salaries and benefits. This, unfortunately, is an illusion: the extra jobs that must be created to administer the unions and the power that some unions acquire outweigh any benefits to the worker in hindsight with the whole local economy.

Let’s look at the Canadian province of Quebec: in order to work in the construction industry in Quebec, you must be unionized and have your trade association cards to prove your work competencies. In other parts of Canada or in the United States, because no union membership is necessary to work in construction, there is clear, direct translation in the price evaluation of real estate, something not visible in Quebec.

Home prices are significantly lower in Montreal than the rest of western Canada, notwithstanding the fact that Montreal is the second most populated city in Canada.

The more government regulatory bodies that exist to control the industry, the more of a burden it is for the taxpayer to support; as such, high taxes are needed to sustain its continuity. Increased taxes directly translates into less disposable income–income that could potentially flow into the real estate sector. More tax outlays also means less for rent payments. The apartment rental market is a free-market: people choose where they want to live, and the most basic consideration is rent. There are, therefore, limits to the amount that a landlord can charge in rent, and therefore, there are limits on property evaluations.

Montreal also has the lowest income levels among the above-mentioned the cities; again, this is mainly due to the city’s excessive regulations and size of government. The typical Montreal taxpayer foots the bill for countless government jobs that are either inefficient in purpose or, less subtly, simply provide little or no real value.

One such example is the role of the union administrators. Are their functions intrinsic to the successful running of the Quebec construction industry? No–and nor do they exist in the rest of the Canadian constriction industry. How about for the workers themselves–do unions positively affect their salaries? A popular anecdote of the past decades is of the many men who have gone to Alberta for construction work in order to pay off their debts.  It would seem as though even the workers’ salaries are buoyed by a lack of unions.

The extra costs that investors and home owners must pay to cover the charges for the benefits of the construction worker come out directly through real-estate price valuations. The price of a home or income property in a given place will be affected by whether it was created by unionized or non-unionized labor. The more unions involved in an industry, the higher the taxes and dues that must be paid to support it, and therefore the lower the amounts people can outlay for their homes. In the end the local economy as a whole suffers from excess government inefficient jobs that taxpayers have to support.

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