Social Policy in Ontario

For the last two years, as the Wynne government has grappled with Ontario’s antiquated labour laws, it has found itself caught in the crossfire of two stalwart and passionate factions: those who want better protections for workers and those who warn such protections would unduly harm business and thus the economy.

As the Liberal cabinet considers a sweeping set of proposed labour reforms this week, it of course must be careful of the burdens these policies might place on business. But it ought to bear in mind, too, the overwhelming evidence that decent work and a decent wage in no way preclude, and in fact may even be necessary to, a thriving economy. If the cabinet shows courage and approves the proposals before it, Ontario can lead on a defining challenge of our time.

The problem of the so-called precariat has been ignored for too long. Precarious workers, an increasing number of whom are in low-wage, temporary jobs, have been largely left behind by governments that have failed to keep pace with the rapid, technology-driven evolution of the workplace. This is perhaps particularly true in Ontario, where labour laws have remained unchanged for decades and our minimum wage continues to lag behind many other jurisdictions.

As reported by Martin Regg Cohn in the Star on Saturday, the proposals now before cabinet, the result of the province’s two-year Changing Workplaces review, would go a long way toward bridging the widening gaps in worker protections and ensuring that everyone in the province is paid a decent wage. The government should not allow the overblown warnings of some in the business community to get in the way.

The province, for instance, is considering a number of overdue changes to the labour code that would eliminate loopholes that allow employers to legally violate workers’ rights.

Crucially, the proposed reforms include expanding the legal definition of “employee” to make it harder for companies to classify workers as “independent contractors” and thus deny people who work full time the appropriate pay and benefits. Participants in the so-called sharing economy, in particular, are often exploited in this way, toiling full time, but receiving no benefits and earning less than minimum wage.

Another proposal would make it easier for certain sectors, such as cleaning staff and home-care workers, to form unions. According to Regg Cohn, the province is considering restoring a prescient policy of the Bob Rae government, which allowed organizers to sign up members using union cards. Under the current rules, employees can organize only by voting in person. But in our increasingly fragmented workplace, this is often highly impractical. The result is that in many cases those most in need of protection are least able to establish solidarity and assert their rights.

Perhaps most important, the province is considering boosting the minimum wage from the meager current rate of $11.40 per hour to $15 per hour. Those earning minimum wage today who are lucky enough to work 35 hours per week take in an annual salary of $20,748, well below the poverty line and nowhere near what is required to live in a city like Toronto. This, at a time when the proportion of the workforce earning only the minimum is rapidly growing.

As the cabinet weighs these proposed reforms this week the labour minister can expect some significant pushback, much of which is predictable.

Critics, for example, continue to argue that strengthening collective bargaining and labour protections will drive investment out of the province and constrain job growth.

But the evidence on this is far from clear. Indeed, research from the International Monetary Fund, among others, indicates that not only are the fears exaggerated, but robust worker protections are key to a strong and sustainable economy. In any case, nothing should eclipse the duty of government to protect the basic rights of workers.

Critics have been even more vocal in insisting that increasing the minimum wage will kill too many jobs. But while some studies have shown these hikes can have an impact on employment, the effect is marginal. And while some of the costs to business are no doubt passed on to consumers, the overwhelming balance of evidence indicates the benefits far outweigh the costs.

For example, in U.S. states such as New York and California, which have significantly increased the minimum wage, we are seeing that not only are such hikes not the job-killers they’re purported to be, but they actually can help business by increasing worker motivation and reducing turnover. They can help the economy by increasing the spending power of a large segment of the workforce. And they can reduce strain on governments by raising many people out of poverty.

There will no doubt be alarmist voices calling on the labour minister to water down his proposed reforms. They should not be allowed to win the day. On worker protections, Ontario has for too long lagged. It now has a real opportunity to lead. For the rights of workers and the health of our economy, the government should seize it.

https://www.thestar.com/opinion/editorials/2017/05/15/ontario-should-seize-chance-to-lead-on-labour-reform-editorial.html