In an earlier post, Travis showed that labour is receiving a decreasing share of income in Canada. Look no further than the current labour dispute between CN and the United Transportation Union (TLU). Just to review, TLU is looking for a three year contract with a 4.5% raise in the first two years and 4% in the last. The mainstream media have been quick to cite CN’s stat that average wages were in the $75,000 range, with a quarter of them paid over $90,000.
But here’s a stat that CN has not been stressing during the labour dispute: over the last 4 years, the company’s annual net income has risen by an average of 27%, to just over $2 billion. Upon the most recent release of their financials, the company raised its quarterly cash dividend by 29%.
The company’s employees, on the other hand, experienced no such windfall. I took the company’s payments to labour through wages and benefits and divided it by the average number of employees in the year (2006 data not yet available). Average workers saw their wages rise annually by 1% from 2003 to 2005, or 5% if you include the “outlier” year of 2002. Yes, I admit it’s a crude measure, but it does show that capital is clearly the big winner here. A 4-4.5% wage increase won’t hurt CN, but it may force them to reduce dividend payment increases. Luckily for them, government is on their side: the Cons and Libs joined together last week to threaten to impose back to work legislation, a move that no doubt has led to TLU taking a worse deal.