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Automobile industry

Canadian Auto Workers Hold Labour Cost Edge Over US Counterparts, Study Finds

Strategic Insights

— 1 min read

The Canadian Auto Workers (CAW) union claims that its members in assembly plants have a strong labour cost advantage over their counterparts in the United States, thanks to higher productivity rates. According to a study by CAW economist Jim Stanford, Canadian workers earn an average of $67 an hour in wages and benefits, which translates to about $53 (U.S.) an hour due to a falling Canadian currency. Despite higher hourly wages and benefits at unionized assembly plants in the U.S. ($60), Canadian workers have a significant edge in productivity that gives them an overall labour cost advantage.

Key Takeaways:

  • Canadian workers in assembly plants earn an average of $67 an hour in wages and benefits, which translates to about $53 (U.S.) an hour.
  • Higher productivity in Canadian plants gives workers an overall labour cost advantage compared to their counterparts at unionized and non-unionized U.S. plants.
  • The CAW's internal study found that Canadian workers have a significant edge in productivity, with an estimated $5-an-hour advantage over unionized assembly operations in the U.S. and a $16-an-hour edge over non-union plants.
  • The study also found that average labour productivity is more than 11 per cent higher in Canadian plants compared to the U.S., and about 35 per cent better than operations in Mexico.
  • Unionized assembly plants in Canada are more productive than non-union operations.
  • The CAW's position contrasts sharply with the view of some industry watchers that labour costs at GM and Chrysler in Canada are $15 to $25 an hour higher than non-unionized foreign-based producers in the U.S.

Statistics:

  • Average hourly wages and benefits for Canadian workers in assembly plants: $67
  • Average hourly wages and benefits for workers in unionized assembly plants in the U.S.: $60
  • Average hourly wages and benefits for workers in non-unionized assembly plants in the U.S.: $49
  • Estimated labour cost advantage for Canadian workers over unionized assembly operations in the U.S.: $5 an hour
  • Estimated labour cost advantage for Canadian workers over non-unionized assembly plants in the U.S.: $16 an hour
  • Average labour productivity in Canadian plants: more than 11 per cent higher than in the U.S.
  • Average labour productivity in Mexican plants: about 35 per cent lower than in Canadian plants.

Sources:

  • CAW economist Jim Stanford
  • TD Economics
  • The Toronto Star

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