At Democracy in America, Will Wilkinson writes:

According to the BLS, from 1970 to 2003, American union membership dropped by 11.3%, while Canadian membership grew 22.3%. More relevant are measures of union density, which tell us what portion of the total workforce is unionised. According to the Canadian government:
While the United States has experienced a rapid rate of decline in union density, from just over 20% in 1983 to 12% in 2006, Canada’s union membership has increased by 72,000 to 4.2 million in the first half of 2007, a union density rate of 29.7%, virtually unchanged over the past decade.
So, what accounts for Canada’s median wage stagnation? Why has Canada’s strong union sector failed to act as an effective countervailing power against the influence of Canada’s wealthy?

In his forthcoming book Progress for the Poor, a book I hope to write about at much greater length, Lane Kenworthy observes the following:

In the United States, economic growth produced virtually no improvement in low-end household incomes from 1979 to 1995 or from 2000 to 2005. In these years both earnings and transfers were flat. …

Kenworthy adds:

In Canada, Australia, and Germany, earnings among bottom-decile households were flat throughout the period. So too were transfers received by these households. As a result, economic growth produced very little change in low-end household incomes.

Interestingly, Canada does have a democratic socialist political party, the New Democratic party, that is aligned with organized labor, a fact that some political scientists suggest has increased working class political participation.

So what do we make of the thesis that organized labor’s power and influence is a critical resource for all working class individuals in a given society, rather than for those affiliated with organized labor? I’d suggest that we can’t really draw any final conclusions, but that the evidence looks somewhat less strong in light of the Canadian example.

Moreover, there is another way to look at pro-regulation activism on the part of organized labor. Just as firms like Wal-Mart are less inclined to resist increases in the minimum wage than small firms, organized labor has a keen interest in raising rivals’ costs. By mandating family leave, etc., for all firms, unionized firms insulate themselves from firms that would otherwise undercut them with more flexible practices.