Employers have to see the need for change

Lana
Lana Payne
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It's one of those wake-up-and-smell-the-coffee moments.

A special report by TD Economics, released March 8, should serve as a rousing call to the country's employers and policy makers.

But don't hold your breath.

It's not every day I find myself agreeing with a bank economist, but every now and then Don Drummond, TD chief economist, surprises me.

It's one of those wake-up-and-smell-the-coffee moments.

A special report by TD Economics, released March 8, should serve as a rousing call to the country's employers and policy makers.

But don't hold your breath.

It's not every day I find myself agreeing with a bank economist, but every now and then Don Drummond, TD chief economist, surprises me.

Many of the issues raised by Drummond and fellow economist Francis Fong in their report on the changing Canadian workplace have been discussed and debated in union and academic circles for many years, including the persistent income gap between women and men, workplace training, the changing labour market and growth in precarious employment, accessible post-secondary education, the retiring baby boomer bubble and inadequate employment insurance and retirement systems.

While many employers are indeed trying to grapple with what Drummond and Fong call "the changing Canadian workplace" others, including some employer organizations, just don't get it.

The world or the workplace as we knew it is shifting and shifting dramatically - one-third of the Canadian workforce is set to retire in the next 20 years, precarious employment is on the rise, and income inequality is out of control.

Yet some employer groups are still stuck in yesterday's debate, petulantly demanding tax cuts like toddlers screaming for more candy as if that will solve the very big problems facing us.

The tax-cut sugar rush - if governments have a clue - should be over.

Today we must plan for the future or be willing to pay an incredible societal price.

That planning means understanding that a freight train is on the way and it is gaining speed.

At recent provincial pre-budget consultations, some employer groups, like the Employers' Council and the Canadian Federation of Independent Business, insisted on more tax cuts.

Following the recent federal budget, the same employer groups complained about employment insurance premiums possibly increasing in 2011. What they failed to point out is that EI premiums were reduced every year between 1994 and 2008 and have been frozen since then.

Perhaps they just haven't realized that the debate is no longer about tax cuts.

Tax cuts have monopolized public policy debate in Canada for two decades. Federal and provincial governments have given in to business demands and delivered bone-deep tax cuts.

But as we have seen, in the case of the federal government, the cupboard was emptied and billiondollar tax cuts to corporate Canada continue despite a growing deficit.

Canadians should be more than a little ticked that there is little evidence that these corporate tax cuts have spurred private sector investment in any real way.

The TD economists noted that the looming retirement of the baby boom generation means employers must find innovative ways of attracting the current labour pool - tapping into underutilized groups, such as women, aboriginals and immigrants.

The growing percentage of part-time, non-standard and precarious employment, rather than realfamily supporting jobs with decent benefits and wages poses a real challenge for maintaining the Canadian middle class. This will likely place a huge strain on governments as they will be expected to pick up the slack through improved social supports.

About 36 per cent of the jobs in today's labour market can be described as precarious or non-standard. These jobs typically pay less, have fewer benefits and are less stable. We must question how these workers will support their families and save for retirement.

Drummond and Fong point out that decades ago the biggest issue faced by women in the workplace was wage discrepancy and the under-representation of women in executive or management positions. Little, they say, has changed.

Canada has the fourth-largest gender wage gap of the 30 developed economies that make up the Organization for Economic Co-operation and Development, yet more women are not just participating in the workforce, but working full-time and graduating with post-secondary diplomas and degrees.

And yet the wage gap persists.

The authors say Canada's employment insurance system is ineffective and needs an overhaul because too many workers are not covered. We can't fix that problem with lower EI premiums. In fact, it can only be repaired if access rules change and premiums go up or the government pays back the $57 billion surplus it owns the EI fund. Don't hold your breath on that happening either.

And finally the big worry - the declining savings rate and pension coverage of working-age Canadians. The growth in precarious work adds to the growing number of Canadians with no workplace pension plan or private savings.

Their conclusion: "The Canadian workforce is the most culturally diverse and dynamic in the world and there is much to be gained by utilizing everyone to their full potential, but the blinding speed with which the workplace is changing requires flexibility on the part of employers." Perhaps shifting from tax cut demands to grappling with big-picture public policy areas would be a good place to start.

Lana Payne is president of the Newfoundland and Labrador Federation of Labour. She can be reached by e-mail at lanapayne@nl.rogers.com. Her column returns March 27.

Organizations: Toronto-Dominion Bank, Canadian Federation of Independent Business, Organization for Economic Co Newfoundland and Labrador Federation of Labour

Geographic location: Canada

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