Why is Canada’s prime minister so determined to drive down, or at the very least, suppress the wages of Canadians?
As an economist, Stephen Harper must know what his government’s changes to employment insurance (EI), the Temporary Foreign Worker Program (TFWP), the elimination of the Fair Wage Act and the assault on collective bargaining in the federal sector will mean for the wages and working conditions of Canadians.
Combined, they will result in a transformation of Canada’s labour market, erode the right to fair and free collective bargaining, and make workers more vulnerable, less demanding, more compliant. Combined, they work to the full advantage of employers, at least in the short-term.
The underlining message taken from all these policy measures to workers is lower your expectations. Don’t demand more or better. Put up. Shut up.
As an example, the changes to the TFWP will allow employers to pay higher skilled migrant workers 15 per cent less than prevailing wage rates.
Employers will also be able to fast track applications for migrant workers. Approval of applications is now merely a rubber stamp, reduced to 10 days from the 12 to 14 weeks it currently takes.
This new labour market policy will depress wages in all parts of the country, but was designed to cater to the developers of Alberta’s oil sands, weary of paying the premium wages dictated by their rapid pace of development.
But the federal government’s intervention will not just affect wages in the oil sands; it is a national policy with implications and impacts across the country.
Ironically, while the federal government rushes to do the bidding of employers, feeding into the notion that Canada has a massive labour shortage rather than a skills and wage shortage, a new study by Statistics Canada showed that there are six unemployed Canadians for every job vacancy in the country. In Atlantic Canada, there are 10 unemployed workers for every job vacancy.
Labour shortage? Or skills mismatch?
The Harper government is working hard at perpetuating this myth that Canadians have an EI dependency, when instead there is a cheap labour dependency.
Economist Armine Yalnizyan has been quite critical of the federal government’s new TFWP rules.
She says that even if such a rule were rigorously applied and monitored, it guarantees a downward trend in wages for everyone. “Fifteen per cent below the average is a recipe for continuous decline.” She says the new rules will result in a permanent temporary class of workers, keeping wages and expectations low.
“As an economist, I understand cheaper labour will benefit some employers in the short term, though the longer-term results will slow purchasing power and growth. As a Canadian, I am appalled that public policy can be boiled down to this. We are all cheapened as a result,” Yalnizyan wrote in a recent column for The Globe and Mail.
But for this Alberta-centric federal government, all roads lead to the oil sands.
The changes in employment insurance requiring workers to travel an hour or more, based on local average worker commutes, will also force Canadians, any Canadian who is unemployed (not just seasonal workers), to work for up to 30 per cent less at any job or lose EI benefits.
As a number of economists have pointed out, the new rules will have a ratcheting-down effect on wages. Andrew Jackson, chief economist with the Canadian Labour Congress, has noted out that a worker forced to take a lower wage job may have to accept an even lower paying job during a subsequent job search.
Jackson says any competent economist should recognize that the new rules will depress wages. “They will create few if any new jobs, while increasing the downward wage pressures of unemployment. The biggest impact will be on wages in relatively low-wage jobs, given that the average EI beneficiary earned about $16 per hour in her or his previous job.”
Instead of attacking unemployment and the skills gap or skills mismatch by investing in training, the Harper government chose to attack the unemployed as if they laid themselves off, as if workers closed plants or were somehow responsible for the seasonal nature of so many Canadian industries.
Then there’s the Fair Wage Act.
A line in the federal government’s omnibus bill eliminated
this 1985 piece of legislation that required companies bidding on federal contracts to pay prevailing wage rates and overtime.
And last week, the Harper government moved for the fifth time in the past year to interfere in collective bargaining, this time at CP Rail, legislating striking employees back to work after just days on a picket line.
As was the case at Canada Post and Air Canada, the government gave plenty of warning that the back-to-work legislation was coming, handing the employer the upper hand. Where was the incentive to negotiate?
Collective bargaining is one of the few ways we have of increasing wages in Canada, and not just for unionized workers.
Of course, this is not merely an assault on wages and working conditions, it is an assault on worker rights and on unions who, like environmentalists, are atop the Conservative enemy list.
Make no mistake, these federal policies will take a swipe at the wages and working conditions of all Canadians, forcing many workers to feel insecure or “thankful” to have a job.
As an economist friend of mine recently joked: “There are two kinds of economists. Those who can add, and those who can’t.” I will leave it to you to decide into which category the prime minister falls.
In the meantime, welcome back to the future.
Lana Payne is president of the
Newfoundland and Labrador Federation of Labour. She can be reached by email at email@example.com.
Her column returns June 30.