Union effects in low-wage services: Evidence from Canadian childcare

Empirical evidence presented in this paper, based on survey data for Canadian childcare workers in 1991, contradicts most stereotypes of the childcare labor market. Although childcare labor was low-wage, the authors find that the union impact on wages (15%) and fringe benefits was in line with union effects found in other, better-compensated work, and they find substantial returns to education, occupational level, and firm-specific experience. The returns to the skill-related attributes were blunted somewhat in the union sector, except where such returns stood to benefit the median union voter. The findings suggest that monetary incentives can be used to encourage improvements in the education, experience, and skill acquisition of childcare workers. Unions can improve wages and benefits for childcare workers just as they can for most other workers, suggesting the viability of union organizing in this sector despite the traditional barriers to organizing low-wage service sector workers in small firms.