How To Prepare Yourself Financially For a Union Strike

how to prepare yourself financially for a union strikehow to prepare yourself financially for a union strike

A UNION STRIKE AFFECTS EVERYONE FINANCIALLY WHO ARE DIRECTLY AND INDIRECTLY INVOLVED

 

When a union goes on a legal strike not everyone is prepared financially especially when the union strike lingers on for weeks and in some cases months. I’ve followed current College strike news in Ontario as the teacher’s head into the third week on the picket lines and wanted to learn more about the financial plight that everyone suffers, including students and businesses.

The last thing you think of when you start the College year whether you’re away from home or not is how you will survive a union strike.

Listen, I’m not union expert but what I am certain of is the financial impact a union strike can have and I’ve got some critical financial planning tips today for those of you who work for a union or are directly involved with a union. Most of the post will revolve around the current Ontario Colleges Union strike as an example.

What does it mean to go on strike?

A union strike means that the union and management are unable to come up with negotiations that meet each others needs. After this the workers walk off the job and picket in hopes of bringing negotiations to the table to get them back to work. In some cases collective bargaining between the union and employer can be sorted fairly quickly and others not so fast.

The longer a union strike lasts the bigger the financial impact it will have.

Related: List of Trade Unions in Canada

 

Who does a union strike affect?

 

Everyone!

Those that aren’t receiving a pay cheque, strike pay and the customers especially if services were paid in full with no refund or one in sight. For the College students who are missing out on class time some are able to pick up extra hours at work and others want nothing more than to get back into the classroom. International students also face problems when there is a strike costing time on their Visa to study/work in Canada although immigration understands.

No one likes to be on strike.

What I found interesting when reading comments from parents and students about the current College union strike is how many assumed that professors have no right to strike because they earn big bucks. I wonder if they would think the same if they were the employee or one day their child becomes a union worker and goes on strike.

I don’t know about you but I wouldn’t want to stand outside with a picket sign for 4 hours and lose my monthly salary just because I don’t want to work. It’s no holiday.

College students are now worried about the possibility of losing their semester as a strike by their teachers enters its third week. With the job action dragging on, they are also worried that in order to save the school year, it could instead be extended — adding to their expenses and interfering with job plans. Students worry as Ontario Colleges go into the third week of strike

So, unions exist and whether you believe in them means that one day you might have to especially if you become employed in a unionized environment. What I mean is if a job opportunity opened up for you which would significantly increase your income would you say no if it were a union environment? Maybe some of you would but most people would jump on the opportunity.

The labour movement was created by people standing up together for fair wages, safe workplaces and decent work hours. When unions stand up for fairness, they raise the bar for everyone. Many of the things first won by unions are enjoyed by all workers today – minimum wages, overtime pay, workplace safety standards, maternity and parental leave, vacation pay, and protection from discrimination and harassment.Related: Why Unions in Canada

A workers strike doesn’t always mean greedy employees are on the hunt for more money, most often it’s increased job security and lots of little loose ends that need typing up. Although no job is ever 100% secure those in a union have a better opportunity to have some say into the health of their employment status.

 

Union vs. Non-Union

 

When you are not in a union you take what you get on a plate and either eat it or starve. Sometimes you can complain all you want about how your employer treated you or even terminated your employment and get no where.

You might be told or hear through the grapevines that if a union is brought into an organization that the company will pack up and go somewhere else. Companies don’t want unions because they want control of their business and with a union they give some of this control up.

Unions are different but the process to become unionized is pretty much the same.

If at least 40 per cent of the workers sign membership cards, the Ontario Labour Relations Board will hold a vote to see if workers want a union. Ontario: 5 Steps to local union certification

Everyone must be prepared for events like a union strike, new union or even a business closing up shop due to bankruptcy as such the case with Sears Canada. Employees need to understand that they are never safe financially unless they have emergency savings to back them up.

No savings, you must deal with the consequences.

Even if your employer offers you pensions and benefits it’s always safe to take care of yourself first. Don’t rely on anyone as many Sears employees recently found out after losing their pension. Cash will always be KING. The hardest hit with a union strike are those who live pay cheque to pay cheque because the loss or significant reduction can mean a financial catastrophe.

 

A union strike is not always just about money

 

Union crap can get boring especially for those who aren’t directly involved with one and there is a union strike. For some odd reason people bash union workers and tell them to get back to work because they make too much money or are greedy. I’ve read comments from people who say that College professors have nothing to complain about since they earn a good wage, so get back to work.

It is these types of comments that go viral because they are the easiest to understand. There is ALWAYS more to a union strike then just money. In this current union strike for Ontario colleges it’s about hiring more full-time professors and putting less on partial-load contract.

Having partial-load faculty always means there will limited consistency either because the contract worker is short-term or they don’t care as much about the role as full-time faculty would.

At the negotiations table, your faculty bargaining team proposed a settlement offer that prioritizes fairness for all faculty through:

  • Improved job security for partial-load faculty
  • Equal pay for equal work
  • Better paths to full-time jobs
  • Complement language that would increase the number of full-time jobs available
  • Stronger workload protections for both partial-load and full-time faculty
  • Equitable access to benefits for partial-load faculty

Partial load faculty also don’t get the same benefits as full-time employees yet put in just as many hours if not more because they have to create lesson plans which many full-time professors already have in place for their students.

The main demands of the Ontario Public Service Employees Union (OPSEU) focus on job security and academic freedom for more than 12,000 faculty, including professors, instructors, counsellors and librarians.

It also wants more full-time jobs at the 24 public colleges.- Why Ontario Colleges are on Strike

So, if professors are earning a certain amount of money they shouldn’t need to strike because of their income makes no sense at all. Just because someone who earns a certain amount of money doesn’t mean they are any different from the rest of society. They still have needs and one of them just happens to be financial. When the union goes on strike whether they want them to or not all union members must be prepared.

Remember, “It’s not about how much money you make it’s how you save it”. 

Consider this for a moment and ask yourself how much money you have saved in the bank just in case something were to happen? It doesn’t matter HOW MUCH money you earn if you have debt and are spending more than you earn that net income is nothing more than a means to no end. Those who earn more money are no different from someone who earns less, they both have to balance a budget or they both fail.

Employees pay union fees also called union dues from their pay to have someone as a voice on their side when things get tough on the management side of their job. This can be a good thing or a bad thing depending on how you view a union.

How are union dues calculated?

Union dues are set by the bargaining agents and calculated either by using a fixed rate or as a percentage of the employee’s salary.One thing that every union member is aware of is that when there is a union strike, they don’t get paid regular pay.- Government of Canada.

 

How much money do those get while they are on strike?

 

This all depends on the union.

If there is a union strike and employees don’t go to the picket lines they get nada, nothing, zero from the strike fund which pay very little. They are put in a position to stand outside with signs picketing the employer to come back to the table and negotiate. They are also out there to tell their side of the story since most people assume it’s always about money.>>This will never change.

That means the only income you will have coming in is from walking the picket lines a few hours a day and a possible top-up depending on your union. This doesn’t mean they will get topped-up to full pay but potentially a bit more income pertaining to circumstances set out.

Example: The OPSEU (College Faculty currently on strike)

During weeks one to three, each member is entitled to strike pay of $40 per day (or $200 per week). Each dependant is entitled to $10 per day (or $50 per week).

During the fourth week, strike pay increases and each member is entitled to $60 per day (or $300 per week). Dependant pay remains the same at $50 per week.

A dependant is defined as:

  • a non-income-earning spouse (excluding a spouse on strike);
  • a child under 18 (or under 26 if attending school full-time) OR a dependant child as defined by the collective agreement or benefit plan;
  • a disabled family member; or
  • an elderly family member who normally receives financial support from the striking member.

If both spouses are on strike, both may claim the dependants. – Source: OPSEU

 

Household debt in Canada

 

Until there is a resolution income levels in union employees households drop significantly. It doesn’t matter how much money a union worker earns and whether they should get back to work. Sure they have a choice to work in a union but again consider whether this is a job you’d want to pass up just because there was a union. Most people won’t walk away from a union job that offers them excellent pay, benefits and pension plan.

As we all know most people revolve their lives around the income they net every month. This may mean you upgraded your living quarters by purchasing a home instead of renting or splurging on bigger house with a larger mortgage. This all goes back to the debt ratio for Canadians and why so many people struggle when things fall apart financially.

Statistics Canada said Friday household credit market debt as a proportion of household disposable income increased to 167.8 per cent, up from 166.6 per cent in the first quarter. That means for every dollar of household disposable income there was $1.68 in credit market debt. Related: Canada’s household debt burden hits record high

What’s most important for anyone whether you’re a union member or not is to make sure you have money in the bank ready to be used for living expenses. Over the years writing this blog I’ve said to keep a least one year of emergency money but have since learned that every situation is different. You may feel comfortable with 6 months emergency savings and sock away more in a Tax Free Savings Account. Either way it is a must for everyone not just union workers.

 

How a union strike affects the customers

 

For those of you who are customers of a business that goes on strike this can affect you financially as well. If you own a business where a high percentage of your sales come from this could put your business at risk. Again, even a business needs a financial back-up plan or risk having to lay-off employees if things slow down.

It’s not uncommon for some business owners to put all their eggs in one basket and during tough times have to let employees go. Ask my wife, this happened to her a few months after we purchased our first home and it was a non-unionized environment and her income was darn good.

Union or no union you need money to back you up.

Customers of union facilities have to remember that they may lose the money and time invested in the business with no return in sight. This is why those customers who are affected are screaming to get employees back to work. I’ve read everything from supportive messages for union workers from the students for the current College strike to nasty comments that are way out of scope for the employees.

Whether or not a refund will be provided depends on the province as they are the decision makers and not the College. If a student loses a semester or one is extended due to a union strike with no refund they have to come up with money again to take the semester over. This means their education timeline backs up and so might be the funds to pay for it.

In some cases the parents are the financial back-bone for their education or they have an OSAP loan that will only go so far. When you are away from home going to College and having to rent that is tough on everyone when there are limited funds.

Should students have a back-up plan just in case of a strike?

It wouldn’t hurt to have an emergency savings plan in place for students as well just so they have peace of mind.  Sounds daft but nothing in life is for certain and savings is always a good thing.

One of the smarter comments that I read was where one student said she was picking up as many hours as she could with her part-time job to earn extra income. This is critical to think about if you have a part-time job although not all employers offer this and it’s tough to schedule not knowing when the union strike will end.

What will you do with your time while there is a union strike and you are the customer?

Business or student you still need to survive unions because they are here to stay. In most cases union workers are fighting for the next generation of employees and that might just be you.

 

How to prepare for a union strike financially

 

If you are a union worker or customer you know there is risk of a union strike which means YOU must take responsibility for your finances. This means that keeping debt to a minimum and having a back-up plan in place.

  • Budget
  • Emergency Savings

There are only two things that I can suggest for anyone reading this post today who may be joining a union or is a customer of a union and that is to budget and have an emergency savings plan in place. The last thing you will want to do is charge your credit card for purchases during a union strike.

Living pay to pay is not a great place to be when there is limited to no income coming in whether you are single, married or in a common-law relationship. This is why it’s very important for couples to talk about money and what situations may cause them financial stress if they occur.

A budget is the number one way to get your finances in order and make money work for you instead of against you. Once you know your financial obligations and income it’s easier to set the pace for other things such as emergency savings.

A dollar a day is better than nothing, remember that. If you don’t have a dollar then find one. Do whatever it takes to find something to save money on or earn some extra cash.

Related: How to earn extra money during tough times

Since we can’t predict everything the emergency savings is the big winner here. Save up as much as you feel you need to be comfortable if your income comes to a stop, partial-stop or a permanent stop. In other words you lose your job or even quit for various reasons.

If a union strike goes on for a month or even two months that’s a huge financial loss for families minus the strike pay if any but still crushing no matter what their hourly wage or salary is.

In the event of a union strike you still have to pay your bills including child support and daycare while you are on the picket lines. This means you may be late with payments if you deplete your savings or don’t have any to begin with. The best you can do is make phone calls to those businesses or organizations you will owe money to and explain your situation. In most cases they will give you an extension or find ways to lower monthly expenses so your bills aren’t as high.

Example: Cut the cable and renegotiate monthly fees with your communications company.

As bargaining teams are back at the table for negotiations today let’s hope they can come to an agreement and get everyone back to work and students back to school. Just keep in mind the importance of financial planning whether you are in a union or not.

Discussion: Have you ever financially survived a union strike? Share your tips below.

Are You New To Canadian Budget Binder?

  • Check out my new Free Recipe Index
  • Make sure to follow me on Social Media by clicking any of the links below.
  • If you like FREE then click this link for my FREE Excel Budget Spreadsheet and all my Free Money Saving Lists!
  • You can now have full access to my Ultimate Grocery Shopping Guide in Canada.
  • Subscribe to CBB today to have access to all of these free tools and Finance tips.

Related articles

Mr. CBB
Mr. CBB was born and raised in the United Kingdom who then moved to Canada where he is a permanent resident. He recently became a father to a very busy toddler who allows him to be a kid at heart. He bought his first house at the age of 21 after University and his second at the age of 24. Both Mr.CBB and his wife are Debt and Mortgage Free and they did it all in under 5 years using a Budget. Canadian Budget Binder is a place where he shares their financial experiences with his readers and hopes to learn about theirs. Welcome to CBB!
Mr. CBB
Mr. CBB

Add Your Comment

*

%d bloggers like this: