A Union Strike Affects Everyone Financially, Directly And Indirectly Involved.
Not everyone is prepared financially when a union goes on a legal strike, especially when the union strike lingers on for weeks and sometimes months.
I’ve followed Ontario’s current college strike news as the teachers head into the third week on the picket lines.
I 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 an expert on unions, but I am certain of the financial impact a union strike can have.
I’ve got some critical financial planning tips today for those who work for a union or are directly involved with a union.
For example, most will revolve around the current Ontario colleges Union strike.
What Does It Mean To Go On Strike?
A union strike means that the union and management cannot develop a compromise that meets each other’s needs.
After this, the workers leave 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 relatively quickly, and in others, not so fast.
The longer a union strike lasts, the bigger its financial impact.
Related: List of Trade Unions in Canada
Who does a union strike affect?
Everyone!
Those that aren’t receiving a pay cheque or strike pay, and the customers, especially if services were paid in full with no refund or one in sight.
Some college students who miss out on class time can 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.
You Don’t Have A Right To 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 if their child becomes a union worker one day 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 you might have to one day, especially if you become employed in a unionized environment.
What I mean is, if a job opportunity opened up for you that would significantly increase your income, would you say no if it were a union environment?
Maybe some of you would, but most 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
Union Strikes Are More Than Just About Income
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 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 in 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 about how your employer treats you or even terminate your employment, and you get nowhere.
You might be told or hear through the grapevines that if a union is brought into an organization, 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 unionization process 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
No Employer Is Secure
Everyone must be prepared for events like a union strike, a new union, or even a business closing up shop due to bankruptcy, as with Sears Canada.
Employees must understand that they are never financially safe unless they have emergency savings to back them up.
If you have no savings, you must deal with the consequences.
Even if your employer offers you pensions and benefits, taking care of yourself first is always safe.
Please don’t rely on anyone, as many Sears employees recently discovered 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 banter 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.
These types of comments go viral because they are the easiest to understand.
There is ALWAYS more to a union strike than just money.
This union strike for Ontario colleges is about hiring more full-time professors and putting fewer on partial-load contracts.
Having partial-load faculty always means there will be limited consistency because the contract worker is short-term, or they don’t care as much about the role as full-time faculty would.
Negotiating For Employees
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, they shouldn’t need to strike because their income makes no sense.
Just because someone earns a certain amount of money doesn’t mean they are different from the rest of society.
They still have needs, one of them being financial. When the union goes on strike, whether they want them to or not, all union members must be prepared.
Savings Vs. Debt
Remember, “It’s not about how much money you make it’s how you save it”.
Consider this momentarily 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 an end.
Those who earn more money are no different from those who earn less; they both have to balance a budget, or tail.
Employees pay union fees, also called union dues, from their pay to have someone as a voice when things get tough on the management side of their job.
This can be good or bad, 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 is the employee strike pay?
This all depends on the union.
If there is a union strike and employees don’t go to the picket lines, they get nothing from the strike fund, which pays very little.
They are positioned 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 is 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 depending on the circumstances.
Example: The OPSEU (College Faculty) is 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 dependent child as defined by the collective agreement or benefit plan;
- a disabled family member, or
- an older person who 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 a resolution is reached, income levels in union employees’ households will drop significantly.
It doesn’t matter how much a union worker earns or whether they should return 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 leave a union job offering excellent pay, benefits, and a 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 a 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
Preparing For The Worst
What’s most important for anyone, whether you’re a union member or not, is to ensure you have money in the bank ready to be used for living expenses.
Over the years, writing this blog, I’ve said to keep at least one year of emergency money, but have since learned that every situation is different.
You may feel comfortable with 6 months of emergency savings and sock away more in a Tax-Free Savings Account.
Either way, it is necessary 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 also affect you financially.
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 if this happened to her a few months after we purchased our first home.
It was a non-unionized environment, and her income was darn good.
Union or no union, you need money to back you up.
Union Strikes Affect Customers
Customers of union facilities must remember that they may lose the money and time invested in the business with no return in sight.
This is also why those affected customers 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 is backed up, and so might be the funds to pay for it.
Sometimes, the parents are the financial backbone for their education, or 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 for everyone when there are limited funds.
Should students have a backup plan just in case of a strike?
It wouldn’t hurt to have an emergency savings plan for students, so they have peace of mind.
It sounds bizarre, but nothing in life is for sure, and savings are always good.
One of the more thoughtful comments I read was where one student said she was picking up as many hours as possible with her part-time job to earn extra income.
It is critical to consider 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 during a union strike if you are the customer?
Whether a business or a student, you must 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 Financially Prepare For A Union Strike
If you are a union worker or customer, you know there is a risk of a union strike, which means YOU must take responsibility for your finances.
This means keeping debt to a minimum and having a backup plan.
- Budget
- Emergency Savings
There are two suggestions I have for anyone joining a union or is a customer of a union: 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, whether single, married, or in a common-law relationship.
This is why couples need 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.
Every Dollar Counts During A Financial Crisis
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 extra cash.
Related: How to earn extra money during tough times
Since we can’t predict everything, the emergency savings are the big winner.
Save as much as you need to be comfortable if your income comes to a stop, a 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 substantial financial loss for families, minus the strike pay if any, but still crushing, no matter their hourly wage or salary.
How To Deal With Late Bill Payments
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.
You may be unsure if you have savings or not.
The best thing is that you may be late with payments rather than not being able to pay them at all.
You can call those businesses or organizations you owe money to and explain your situation.
They will usually 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 agree and get everyone back to work and students back to school.
Remember 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.
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