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Raising low-wage workers out of poverty: What is the government doing?
By Jenny Carson August 21, 2013 http://rabble.ca
That there has been a dramatic rise in the number of working poor in Canada is incontestable. In 2013, one in ten Canadians earn minimum wages, more than double the number ten years ago; half of those workers are in Ontario. A recent study conducted jointly by McMaster University and United Way Toronto found that barely half of all workers in the GTA-Hamilton area are employed in permanent full-time positions that provide benefits and a modicum of job security.
The explosion of precarious or insecure employment and the subsequent growth in income inequality are the result of both long and short-term changes in the labour market. The outsourcing of good-paying manufacturing jobs to the developing world, the expansion of the low-wage service sector, reckless Wall Street spending and the assault on unions have all contributed to the current plight of the working class. But also important is the erosion of state support for collective bargaining and basic employment protections.
Governments at all levels have abdicated their responsibility to balance corporate and worker interests to maintain a healthy and balanced economy. The consequences for workers — in the form of shrinking wages, increased job insecurity and declining health — have been disastrous.
It is with cautious optimism then that we should greet recent municipal, provincial and federal-level efforts to address worker poverty and income inequality. On July 19, Toronto City Council voted 28-3 to update the City’s Fair Wage Policy. First established in 1893, the Fair Wage Policy requires contractors and suppliers for the city to pay their workers the prevailing market wages and benefits in their field of employment or, for unionized fields, union rates. The policy was designed to protect workers from unscrupulous contractors trying to underbid their competitors by paying their workers less than the prevailing wage rates, and to enhance the city’s reputation as an ethical employer. However, because the rates had not been updated since 2003, until last month many of the city’s “fair wages” fell below the Ontario minimum wage of $10.25 an hour.
The July 19 vote to update the fair wage rates reveals that a majority of councilors understand that is bad policy for the city, as an employer, to add to the growing ranks of the working poor (this excludes councilors like Denzil Minnan-Wong who sees as any kind of wage control as “social engineering”) Under the new rates, contractors providing janitorial services for the city must pay their workers at least $12.43 an hour. Cleaners in the private sector in contrast almost always earn minimum wages.
Unfortunately, however, a fair wage is not a living wage, which the Canadian Centre for Policy Alternatives estimates to be $17.76 an hour in Toronto (a living wage covers the cost of basic necessities such as shelter, food, clothing and transportation). The city’s fair wage rate for cleaners would barely raise a worker out of poverty and, if she or he were supporting a family as is often the case, would in fact leave them in poverty. This then is only a first step if the city truly wants to be an ethical employer.
On July 19 City Council also agreed to devise a “job quality assessment tool” against which any jobs being contracted out would be measured. The basic idea behind this initiative is to ensure that the city is not turning good jobs into bad jobs through the contracting-out process. As well as considering wage levels, the tool will include other criteria such as worker health and safety, skills and training opportunities, working conditions and other factors which determine job quality. Ideally, the job quality assessment tool, which will be considered by Council at the end of this year, will provide some protection for city workers who will no doubt face another round of privatization pressure as Mayor Ford runs for re-election in 2014. How successful this initiative will be depends on whether workers and their unions are given a voice in its formulation and implementation, and it’s not yet clear if they will be.
At the provincial level, the Wynne government recently announced the creation of a minimum wage advisory panel that will consider how to calculate increases to Ontario’s minimum wage. The six-member panel, chaired by University of Toronto Industrial Relations and Human Resources professor Anil Verma includes representatives from labour, business and youth, the latter of whom are disproportionately represented among low-wage and precariously employed workers.
The minimum wage in Ontario has been frozen at $10.25 for the last three years, and will remain so for at least the next six months as the panel conducts public consultations and studies how other jurisdictions calculate minimum wage rates. Anti-poverty activists are justifiably angry that it has taken the Liberals more than two years to set up the panel, and wonder why, unlike many other provinces, Ontario does not provide automatic annual minimum wage increases pegged to inflation. Ontario Labour Minister Yasir Naqvi’s assertion that we need a “made-in-Ontario” solution raises more questions than answers.
Yet once again there is reason to be hopeful that this initiative will help low-wage workers, many of whom are newcomers to Canada climb out of poverty and contribute to the economic recovery we so desperately need (remember, low-wage workers tend to spend every cent they earn in the local economy). The panel will most certainly recommend a wage increase and, perhaps just as importantly, develop a more predictable formula for raising the minimum wage in the future (in the past this has been done on an arbitrary, ad hoc basis that resulted in a nine-year wage freeze under the Conservatives). Only time will tell whether the panel’s political masters, whoever they might be next spring support a progressive overhaul of the system.
Despite the chilly climate for workers on Parliament Hill, there may also be reason to hope for change at the federal level. Next spring NDP Member of Parliament for Toronto Davenport Andrew Cash will introduce a private member’s bill to expand EI access to part-time and self-employed workers and to eliminate the use of unpaid interns. Cash has a personal as well as professional interest in the issue as someone who spent most of his adult life precariously employed in the creative sector. His bill would modernize a program that no longer reflects the employment realities of many Canadians, and make it harder for employers to engage in unethical and often illegal practices such as hiring workers as “independent contractors” so as to avoid obligations under employment law. It would also reform a pension system that currently consigns large numbers of elderly Canadians to poverty.
Cash understands that legislative changes to EI are only part of the solution. He envisions a multi-pronged approach that includes affordable daycare (along the lines of Quebec), social programs to fight poverty, and decent and affordable public transit. While the chances of Cash’s bill passing under a Conservative government are next to zero, his laudable initiative has the potential to start a public dialogue about how the EI system is failing Canadian workers. It is also, as Cash explains, an issue which “spans the employment silos and class divides” that traditionally divides workers. His bill has the potential to mobilize a broad cross-section of the working class, from journalists to taxi drivers to computer programmers. Its long-term success depends in large part on whether this mobilization takes place.
Together, these initiatives reveal that government (or at least some within government) is finally beginning to heed worker and progressive demands for action that will stem the alarming growth of job precarity and worker poverty in Canada.
It is far from clear whether any of these initiatives will lead to real change for workers, but collectively they suggest that at least some of our elected officials understand that government has a stake in creating a more equitable society.
Jenny Carson is Associate Professor in the Department of History at Ryerson University.
Photo: Bob Simpson/flickr
Austerity chokes the down-and-out, as Harper and Flaherty look the other way
By Nick Fillmore August 16, 2013 http://rabble.ca
The exceedingly aggressive austerity cuts carried out by Prime Minister Stephen Harper and Finance Minister Jim Flaherty over the past seven years have come home to roost as millions of Canadians, depressed and without hope, are succumbing to its worst consequences.
Program cuts and tax reductions for corporations and the wealthy have had a huge, disproportionate impact on the poor, working poor, underemployed, and those with health problems including mental illness.
The massive austerity program translates into less income, decreased services, and reduced health care for many of Canada’s most vulnerable people. It appears that more than 3.5-million Canadians — mainly the poor, the unemployed/underemployed and the under-privileged — are struggling.
The attacks on the vulnerable began soon after the Conservatives came to power in 2006. They launched cuts that were a broadside attack on the government’s ability to finance many of its activities, including these much-needed employment and social support programs.
Ignoring the needs of Canadians living in desperate conditions, Harper and Flaherty initiated the extremely aggressive austerity program because of their determination to reduce the deficit and cut the size of the federal government. Their decisions were based on their own neo-liberal economic beliefs, not what Canadians needed or wanted.
There are numerous examples of needless, brutal cuts. Claiming it was concerned that some people don’t have enough incentive to work, Harper-Flaherty toughened up the Employment Insurance rules. They took millions of dollars away from mostly seasonal workers, leaving them vulnerable.
Human Resources and Skills Development Canada (HRSDC), the government department that provides the most hands-on support for the poor, is being cut more than any other department. It will lose 5,700 positions — one-quarter of its workforce by 2016. The largest cut in absolute terms is to the Citizen-Centered Services Program, which helps Canadians access government services by phone and online.
Harper also cut funding to the National Aboriginal Health Organization (NAHO) and to a number of Aboriginal women’s health organizations — crucial programs on suicide prevention, women’s health, and diabetes. They also cut the Women’s Health Contribution Program, which funds six women’s health organizations across the country.
The austerity cutting is based on Harper and Flaherty’s near-fanatical determination to cut the deficit and reduce the size of government. The two unwaveringly believe in neo-liberal economics, which enriches corporations and the wealthy at the expense of the rest of us. We have two people running our country who don’t really believe in government!
Unfortunately, the problems of the less fortunate are not acknowledged in the PMO or Department of Finance. It is much more important that interest rates remain low for the benefit of corporations and the one per cent. A Google search for any Harper or Flaherty comments that express any concern or interest in the problems of the poor comes up empty.
Two moves early on by Harper and Flaherty eliminated the ability of the Conservatives to fund the kind of generous, liberal-minded government Canadians have been used to. First, a two-per-cent cut in the Goods and Service Tax income in Flaherty’s first two budgets cost the government a staggering $10-billion to $12-billion annually in revenues that had been used to help support government services.
In addition, Flaherty has cut $60-billion in corporate taxes since the Conservatives took power in 2006 – needlessly reducing the country’s corporate tax rate to the lowest among G8 countries.
The austerity program and other government cuts have had disastrous consequences for millions of Canadians. There are staggering disparities in life expectancy based on the amount of education a person receives and their amount of education. On average, people living in rich neighbourhoods live an average of 86.3 years, while those living in a poor neighborhood live only 65.5 years — a difference of 21 years.
There is more hunger across the country than ever before. In March, 2012, 882,188 people received food from a food bank in Canada — an increase of 2.4 per cent over 2011 and 31 per cent higher than in 2008, when austerity was being launched.
Children are not spared from the suffering. According to UNICEF’s most recent report, Canada is 21st out of 29 top countries for relative child poverty, and 27th for the percentage that were overweight.
Between the years 2007 and 2011, Statistics Canada reported a 20 per cent rise in people who said their mental health was deteriorating. Mental illness is already the number one cause for disability claims in the workplace. According to the Mental Health Commission of Canada, awards for mental injury at work have dramatically increased in recent years because of pressure placed on workers to produce more during the austerity period.
It’s also likely been an increase in suicides in Canada due to the distress suffered by individuals as a result of the austerity program. Two international researchers, David Stuckler and Sanjay Basu, have documented substantial increases in suicide in several European countries and the United States as a result of austerity cuts. Suicides in Canada increased from 3,512 in 2005 to 3,890 in 2009, which takes in the early part of the austerity period. However, Statistics Canada is three years behind in posting its deaths statistics, so no information is available covering a large period of austerity. But, assuming that Canada is experiencing roughly the same fallout as are Europe and the U.S., it is safe to predict a sizeable increase in suicides here.
Throughout the Conservatives’ seven years in office, independent economists argued that the austerity program was not achieving its stated goal of preparing the country for an economic recovery, but Flaherty refused to budge.
Then in April, the world was shocked when the austerity experiment, which was had destroyed the lives of millions in Europe, was totally discredited. Thomas Herndon, a young University of Massachusetts Amherst graduate student in economics, discovered that an influential paper endorsing austerity practices as a way of rebuilding beleaguered economies was incorrect because of spreadsheet coding errors and selective data.
Amazingly, Flaherty continued with the austerity experiment. “What I worry about is those that suggest that austerity should be abandoned,” he noted. “I think that’s the road to ruin quite frankly.”
So more cuts that will affect the poor the most are on the way. Harper and Flaherty will chop another $11.8 billion from government spending by 2014-15; job losses in both the public and private sectors will be 90,000 by 2014-15; and there will be 1.4 million unemployed workers in the country in 2015.
If Harper and Flaherty really wanted to balance the budget and look after people at the margins, they could work harder to collect the $29 billion the government is owned by the rich and corporations in unpaid taxes.
They also could try harder to find the $3.1-billion that was given to the anti-terrorism program but now cannot be accounted for.
The Council of Canadians says if Harper and Flaherty really wanted to both gradually reduce the deficit and look after the needs of the poor, they could continue to stimulate job growth through needed infrastructure projects (water, transit, green energy, roads, etc.), and reverse corporate tax cuts. Not by suffocating those at the very bottom of the pyramid.
Nick Fillmore is a freelance journalist who worked in many areas with the CBC over nearly 30 years. He is a former member of THIS magazine’s editorial board and was publisher of The 4th Estate, an independent weekly in Nova Scotia, during the 1970s. Fillmore was also a founder of the Canadian Association of Journalists. To see other articles, visit his blog.
With B.C.’s job market stalled, it’s time for a jobs plan that actually works
By Iglika Ivanova August 14, 2013 http://rabble.ca
The latest B.C. job numbers reveal a picture of persistently high unemployment and stalled job creation. Since January, B.C.’s unemployment rate has been on a roller-coaster ride, down one month and up the next. All in all, there have been very few jobs created in 2013, far fewer than needed to employ our growing working-age population.
In fact, B.C. is a laggard in job creation this year, placing in the bottom three provinces in Canada. Only New Brunswick and Nova Scotia have created fewer jobs than us (they’ve actually seen job losses this year), while all other provinces have managed to achieve higher job growth.
This is a problem that requires governments — both federally and provincially — to take a more active position. Simply standing out of the way and waiting for foreign investors to create jobs is not going to do it; it’ll only mean that we’ll be stuck with persistently high unemployment for a long time, depriving young people of career opportunities, resulting in needless suffering of those who can’t find work, and slowing down our economy for years. We can’t afford to remain complacent.
The BC Jobs Plan isn’t going to do it. That’s because (as we’ve previously argued here), it doesn’t address the key underlying cause of our sluggish job creation — the lack of demand.
The reason why business isn’t investing and hiring more people is that the expectations for sales and profits are low. And that’s because B.C. consumers are spending less, weighed down by record high debt-levels, relatively high unemployment, family incomes that have stagnated for the last four years nationally and in B.C. have actually dropped since 2009, and a weak housing market that’s either heading for a prolonged slowdown or a crash in urban hot spots like Vancouver. None of these factors bode well for household’s new worth and future spending plans. It’s easy to see this creates a vicious circle — customers not spending means businesses don’t expand hiring, family incomes remain low, so customers spend even less.
Exporters are also having a hard time as China is slowing down, Europe is still fighting an economic slump that its own austerity policies brought on, and the U.S. is yet to recover.
To make matters worse, the B.C. government’s own policies, narrowly focused on reducing the deficit, have been working against the job market. Cost-cutting governments don’t buy things and reduce jobs (July marked the third consecutive month of job declines in the public sector for B.C.), so the slowdown continues.
The bottom line is, the economy works better when the money is circulating around, and that happens when more people have jobs and livable incomes. When consumers aren’t spending and businesses aren’t investing, the government must step in. What’s needed is a boost in family incomes that will inject money in the economy.
While provincial government policy can’t fully compensate for the global economic slowdown, and the federal government is better positioned to engage in stimulus spending, provincial governments can certainly cushion the blows. Public investments can directly create jobs and boost incomes, but they can also attract and drive private investments in infrastructure and other areas that will meet community needs.
In fact, the smartest way out of the jobs crisis is to put some of our collective resources to work on serious social and environmental problems like climate change, poverty and the affordability crisis facing many families. This way, we will create jobs in the short term while improving quality of life and setting our province up with the basis for a robust and sustainable economy in the future.
I’m talking about investments in high quality, universal and affordable early child care and education, hiring more teachers to relieve crowded classrooms in our schools and provide the needed supports for students with special needs, and boosting funding to make post-secondary education and skills training accessible to all who need it.
Other ideas for boosting job creation and our economy include: investments in making our homes, schools and hospitals more energy-efficient (which will create jobs in construction, reduce energy consumption and help us meet our climate goals), and a large-scale reforestation program post the pine-beetle devastation to breathe life into many rural communities. Youth-focused initiatives should also be on the table, to deal with the massive underemployment plaguing that cohort.
There’s no shortage of ideas. The stumbling block is that an effective job creation strategy will cost money, and this goes against the B.C. government’s current narrow focus on immediate deficit reduction.
The way to move forward is to acknowledge that without more revenues, our government can’t effectively provide the kind of leadership that’s needed at a time of persistent joblessness. And since our current fiscal challenges are the result of years of tax cuts, we can begin to address them with modest tax increases on those who, to quote Finance Minister de Jong, “have a little more” (see here and here).
While slightly higher deficits may be needed in the short term, B.C.’s in a solid position to run deficits for a few more years. The key is taking some of the idle money, the money that businesses aren’t currently investing and consumers aren’t spending, and putting them to work for the B.C. economy.
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If you’re interested in looking at the numbers yourself, B.C. stats provides a good summary here and a detailed Excel spreadsheet here. For a detailed explanation of why our joblessness problem is worse than what the official unemployment rate would have you believe, see Jim Stanford’s excellent articles here and here.
Want, waste and wealth: The immorality and inefficiency of capitalist food distribution in Canada
By Michael Laxer August 13, 2013 From: http://rabble.ca
It has been both a disturbing and telling couple of weeks in terms of news developments related to food distribution in Canada.
First, at the end of July, a report by researchers at the University of Toronto showed that nearly four million Canadians face what they, as is now commonplace, somewhat euphemistically describe as “food insecurity”; an academic way of saying that these citizens either are not able to buy enough food for themselves or their families or that they are constantly struggling to do so. In the case of Nunavut, where the situation is at its worst, over 50% of households experienced food insecurity, while in both PEI and New Brunswick it was a quarter or more of households.
Jennifer Taylor, head of the PEI Food Security Network, reacted to the island province’s embarrassingly high numbers by stating:
It’s a social problem. It’s not a nutritional problem [but] it has nutritional outcomes…
This is an embarrassment. We have the home of Green Gables, we have beautiful beaches, we have friendly, generous people and we have the most kids — save Nunavut, that’s the only place higher — that are possibly going to bed hungry or going the whole day without food. This is a crisis and we need to deal with it.
The consequences of “food insecurity”, or put more bluntly, hunger, malnourishment and the stress of trying to get food on the table, is devastating for those families and individuals facing it. The report’s project leader, Dr. Valerie Tarasuk, put it in stark terms:
The impact of this situation on children, families, communities, the health care system and our economy cannot be overstated…The problem is not under control and more effective responses are urgently needed. The cost of inaction is simply too high.
Shortly after the release of this report, came news from Statistics Canada about the rising price of food in Canada between 2007-2012. In the words of Mark Brown of their economic analysis division:
The report showed that prices have increased at a cumulative rate of 19% over the last five years. The report also showed that for Canada, the price of food rose at almost twice the rate of the Consumer Price Index, excluding food.
This is a staggering increase that directly effects the financial well-being of citizens, especially, obviously, lower income households and those on fixed (and always declining versus inflation) social assistance rates. It also clearly adds to the acute problem of “food insecurity” described above.
Finally, a third report released by the Conference Board of Canada on August 8, found, among other troubling environmental conclusions, that as much as 40% of all food in Canada is wasted. This waste is equivalent to as much as $27.7 billion annually.
Put in the context of widespread food insecurity and the rise of prices, this level of waste is truly appalling both socially and morally. It means that not only is food that could feed citizens who are going hungry being wasted on hard-to-believe and disgraceful levels, but such wastage inevitably will be a factor in keeping food prices high, in this case artificially.
The Conference Board, typically and disingenuously given its business bent, puts the onus for the waste on consumers, and calls for greater “education and awareness campaigns”. While it is, no doubt, true, that most food waste cumulatively will occur in households, the 40% figure is not an average, it is a total. Any given household, taken individually, will waste far less food than the vast majority of restaurants and supermarkets/food retailers taken individually.
What the numbers really indicate is that food waste is a systemic part of our food distribution system, that it is tied to the quantities in which food is packaged, marketed and sold as well as to standard commercial food practices, like restaurants and diners filling plates with more food, often by far, than a person is likely to finish. The food industry, as a whole, profits greatly from this waste, as it directly impacts supply and demand in ways obviously in its favour and drives up prices.
Further, though, the Conference Board’s calls for “education and awareness” are absurd in a society and economic system predicated on the principle of perpetual over-consumption (in economic terms) socially, with the over-consumption the more pronounced the higher up the economic ladder one climbs, it being basically non-existent at the lower end. Placing the “blame” on households conveniently diverts attention from the profound immorality of what this waste represents. It is an intrinsic part of our capitalist system of “food distribution” and not an incidental one.
The waste embodies the very ethos and underlying driving forces of consumerist capitalism and highlights its moral and economic contradictions as well as how it is basically unsustainable.
Most Canadians are aware that we are living in a dangerous housing bubble which is at best now “cooling”, though it shows very real signs of collapsing. This is especially problematic as the housing bubble was essentially engineered by the Federal Government as a form of economic stimulus, and the government, and citizens, are on the hook for it should it collapse.
These actions have also had the, to say the least, morally dubious effect of dramatically driving up housing prices making them less affordable to those with lower incomes, even despite the loosening of mortgage qualification rules until recently. In the long term they have also created conditions in which it is quite likely that many Canadians will be paying mortgages on properties worth significantly less than what they purchased them for.Finally, they have placed many Canadians in a position, though admittedly of their own nominal “free will” in which they have a remarkable net worth on paper, tied up in the value of a house they do not actually yet own, but who in reality are a paycheque or two away from losing everything.
Many are also aware that we have sustained much of Canada’s economic “recovery” since 2008 through the extension of credit and the facilitation of a culture of indebtedness that has led to Canadians being in far greater debt than at any other time in their history. This is a credit bubble which is also clearly driven by consumerist forces in the economy backed by the government’s and corporate sectors policies around credit. As with all bubbles, it would take a surprisingly small number of initial defaults on mortgages and credit card/line-of-credit debts to set a whole chain reaction of default and rapid economic downturn in motion.
Further, looser credit spurs over-consumption in that people buy things that they otherwise could not afford and may in fact not be able to afford. Cars, more expensive housing, appliances, etc. This is what makes it such a dangerous form of economic “stimulus”. The consumption is not based on higher incomes (as we all know incomes are largely stagnating versus inflation) or on direct government spending on infrastructure or social programs that actually puts real money in the pockets of citizens, but rather on making it easier to buy things without having the actual money to do so. This can only, for obvious reasons, go on for so long. It also leaves out entirely the poor and the lower income working class, as they often cannot get credit in any real sense and thus cannot “benefit” from it.
The loosening and over-extension of credit is the worst possible and most corporate friendly “solution” to the diminishing ability of the consumerist society to sustain consumption. It places the “risk” and obligation of the stimulus entirely on the back of the consumer and citizen.
The alarming reports in the food sector very much fit this broader social pattern. We see the growth of “food insecurity” at a time of rapidly rising food costs in a setting of a largely unregulated corporate food industry that has engineered, facilitates and that profits from tremendous social waste.
In a society that makes a virtual cult out of the disposable, the food sector has not been left behind. From club packs, to encouraging citizens to buy more to “save” (an inherently absurd concept), to the socially created expectation that a “good meal” out means being served more food than we can eat, to retailers stocking shelves with more product than they can sell, the system is designed to create waste on a massive scale.
And as with other sectors of our consumerist economy it is not sustainable environmentally, economically or morally. It needs to be radically reexamined as do its systems of ownership and distribution.
Michael Laxer lives in Toronto where he runs a bookstore with his partner Natalie. Michael has a Degree in History from Glendon College of York University. He is a political activist, a two-time former candidate and former election organizer for the NDP, was a socialist candidate for Toronto City Council in 2010 and is on the executive of the newly formed Socialist Party of Ontario.
Andrew Phillip Chernoff 