Armira Vargas could be mistaken for a Canadian-dream poster child.

She moved to Toronto from Colombia in 1989, parlaying her work visa as a nanny into a job at a formal-wear shop. After years of sending money home, she could afford to bring her three children to join her.

She and her two sons got jobs at Progressive Moulded Products – well-paid, full-time gigs assembling plastic car parts. They earned benefits and paid into corporate pensions. They bought a house in Maple, north of Toronto.

PMP declared bankruptcy as the auto industry foundered; its liquidation auction, in the fall of 2008, was billed as the largest plastic injection moulding sale event in Canadian history.

With three breadwinners out of work, the Vargases sold the house and went their separate ways: The daughter is now living in a basement apartment with her own 12-year-old; one son landed an engineering job in Kitchener; the other is still seeking work.

Ms. Vargas juggled multiple jobs for as long as she could, working full-time at another manufacturing plant in the Toronto area while holding down a part-time gig at Wal-Mart. Then it was just Wal-Mart – sometimes as little as 12 or 16 hours a week, barely enough to cover the rent on her apartment on the city’s northern edge. Her English isn’t good enough to qualify for the provincial government’s Second Career program: 25 years working in trades means her office and computer skills aren’t up to snuff in a 21st-century workplace.

“I want to work. I want to earn money. I want to do something useful – a livelihood. This is no life.”

Ms. Vargas’s predicament is no anomaly. Across Canada, a job is no longer a ticket out of poverty, or a safeguard against it. And the number of people working but unable to make ends meet is growing in the country’s most populous urban hub – far faster than in Ontario or Canada as a whole. A study by Toronto researchers provided exclusively to The Globe and Mail provides a granular glimpse of working poverty at the census-tract level.

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Interactive Map: Use this interactive map to dive into the data behind Toronto’s working poor. Based on a new data by the Metcalf Foundation, these maps paint a unique picture of poverty in the city.

Explore this data »   <  http://www.theglobeandmail.com/news/national/toronto/interactive-map-explore-the-data-behind-torontos-working-poor/article2332885/?from=2334814 >

Toggle between censuses of working poor (General population/Immigrant population/Toggle between years)

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The Metcalf Foundation study, the first of its kind in Canada, documents the changing face of the Toronto area’s workforce.

And it isn’t pretty: Even during times of economic prosperity, from 2000 to 2005, the number of working people unable to make ends meet grew by 42 per cent in the Toronto area.

The exacerbation was especially pronounced in the city’s transit-starved east end. But rates grew fastest in the suburbs: Cities like Mississauga, Brampton, Markham and Vaughan are dealing with working poverty they’ve never faced before.

A deep recession and sluggish recovery haven’t helped.

“We’ve got a lot of people who are working very hard, and they’re still poor. So what’s up with that?” says Sandy Houston, Metcalf’s president.

“Maybe if we can better understand … we can start to better address the implications of that situation.”

More jobs, few good ones

The number of Torontonians working hard and hardly earning was growing even before a global financial crisis pummelled the province and brought the region’s manufacturing sector to its knees.

In theory, the economy is back on track. In neighbourhoods across the Toronto region, not so much.

It’s crunch time for employees. Public support for higher wages, benefits and unionized labour is low. Caterpillar’s London closure, and Toronto’s showdown with its outdoor public workers give a sense of the squeeze: There’s little leverage to be had in a take-it-or-leave-it bargaining situation.

Statistics Canada’s Labour Force Survey last month looked ugly compared to a year ago: Toronto’s unemployment rate edged up by just a third of a percentage point, and its labour force dropped by more than a quarter, indicating people are giving up the job search altogether. Both labour force numbers and unemployment are significantly better than at the recession’s nadir.

But what if the jobs being created aren’t up to par – not good enough to pull an economy through a sagging recovery, and not good enough to keep thousands of working people out of poverty?

A CIBC report last month found the jobs being created are getting worse: Low-paying gigs are growing faster than well-paying ones; more people are identifying as self-employed, which often translates into lower wages. And that drop in quality is most precipitous in Ontario.

Janice Brett was out of work after 24 years and three months working at Scarborough’s Honeywell North Safety, when the worksite safety manufacturer closed its Toronto plant last year. “We were stunned. … All those years working there, we had no benefits. They ran out after six months.”

She sold her house, moved in with a friend in Scarborough, and didn’t realize she’d started grinding her teeth at night until she broke a tooth.

Ms. Brett got a part-time job as a cashier at a Zellers in Pickering, and another as an assistant cook at Chartwell’s. “Those two jobs were not giving me the pay I made at Honeywell.” Now, foodservice diploma in hand, she’s pinning her hopes on landing a full-time job.

“The second week of January I got 4.25 hours,” she says, “Hello? It’s not worth getting out of bed.”

Underemployed immigrants and clustered poverty

Immigrants make up a little more than half of all the working-age population in the Toronto area – but almost three-quarters of the region’s working poor. In 2005, nine of the city’s census tracts boasted more than a fifth of the working-age immigrant population employed and in poverty.

As with the general population, the areas where the ranks of working-poor immigrants are increasing are clustered in the city’s east end, most of them away from transit in areas originally designed for car-owning families of the 1950s.

Martin Vincent came to Canada from the UK just over a year ago. His degrees in politics, war studies and defence studies and years of experience as a police officer and counter-terror co-ordinator haven’t been enough to get him a job in his field; they haven’t even been able to land him a full-time gig.

“Can I get a job in Canada? You’ve got to be joking. Not a chance.”

Right now he’s working part-time at Indigo Books, he says. He likes the company, but the hours aren’t enough to live on.

“I look at it as a job that’s temporary, until I can have a permanent job.”

Groups working with Toronto-area immigrants worry the shift of migrants to other provinces, and the leaching away of federal funds for immigrant settlement will make it even more difficult for newcomers to integrate into the job market.

In the meantime, lower earners who cluster in areas made affordable because of a lack of transportation remain lower earners for that same reason. Once poor people are entrenched in a neighbourhood such as Steeles L’Amoreaux, Weston Mount Dennis or Kingston-Galloway, there’s often little incentive for businesses to invest.

“You have a convergence of not great transit and more affordable housing,” says Colette Murphy, inclusive economies program director at the Metcalf Foundation. “How do you build a strong, resilient economic region and city when you start to see these types of patterns?”

The high cost of low pay

How to do that depends who you ask. And whether you’re trying to get re-elected.

The simplest route is to increase the minimum wage.

There’s no shortage of arguments against it, the most common of which is that it hurts employers, especially smaller businesses, and so harms the economy more than it helps.

But multiple U.S. states are considering doing just that. A study last month from the New York-based Fiscal Policy Institute argued boosting the state’s minimum wage would actually create jobs by increasing the purchasing power of families likely to spend that extra cash locally.

“If you’ve got people coming out of poverty, you’ve got consumers,” says Robin Somerville, an economist with the Centre for Spatial Economics. “There’s no economic advantage to be gained by having the bottom 20 per cent dirt poor and the top 20 per cent filthy rich. It’s just not as efficient.”

But the problem is not just related to wages, but to the uncertainty of the work. Some argue there’s a case for government to step in – either by beefing up public pension and benefit plans or through a working income tax benefit that would top up the annual income of people with jobs.

When the people who are supposed to push a consumer-driven recovery have no discretionary income to speak of, it hurts the entire economy – often much more than the accumulation of wealth at the upper echelons helps it.

“You want to see jobs being created in higher value-added areas, higher-wage employment,” says TD Bank economist Derek Burleton. “So from that perspective it does matter. It’s important.”

The proposals may sound like lefty interventionism unlikely to gain traction in an austerity-focused environment, but their proponents include such Conservatives as Senator Hugh Segal, who argues Canada’s economy can’t afford a laissez-faire approach.

“People who live beneath the poverty line are not, to use an unpleasant quote, sitting on a couch drinking beer and eating popcorn. They are, in fact, working,” he said.

“You need a basic income base to protect those people.”

The alternative, says McMaster University’s labour economics professor Don Wells, is a widening gap that begins to have a community impact.

“More and more people feel outside of society: They feel they’re not able to participate. … You begin to see the unravelling of community.”

Mr. Somerville is hopeful the wage and benefits compression, and the trend toward temporary work, is cyclical. But in the meantime, it’s a big concern.

“If we do have sliding incomes across society, it takes away from our purchasing power and can induce a negative spiral.”

Mario Garofalo has stopped looking for a job altogether: The 43-year-old was excited to interview at a new solar-panel manufacturer in the Toronto area until he realized that at the wage offered, he was better off sticking to Employment Insurance.

“It just isn’t worth it,” he said. “So many people need jobs now. And employers in manufacturing, they know it. … But that doesn’t lower the cost of living.

“They wouldn’t be able to live off that money.”

THE TOLL GOES BEYOND THE WALLET

It’s called precarious employment – part-time, contract-to-contract or temporary work. And amid employers’ post-recession jitters, the new normal is a job that’s anything but steady.

In the Toronto area, McMaster University professor Wayne Lewchuk says, as much as 45 per cent of the working population could be in non-permanent jobs.

There’s nothing wrong with this in and of itself, he says. Some people in precarious employment situations are there by choice: They enjoy the flexibility as much as their boss does.

The problem is what usually comes with that precarious position: Unpredictable wages, and hours that often aren’t enough to make ends meet. A lack of benefits means any unexpected medical expense can be financially crippling.

The toll isn’t only financial: Studies Prof. Lewchuk has done in the Toronto and Hamilton area found unstable employment is bad for your health.

That stress was more than Paul Lewis could take. The 48 year old, who’d spent the previous nine years working as a press operator at a northern Toronto plant, gave up his job at a temp agency because the uncertainty just wasn’t worth the minimum wage.

“They’ll send you to a place for two days, then you spend two days at a different place.”

Now he’s training as a gas technician, in the hopes that will improve his employment prospects. He works nights helping with a friend’s cleaning business, sanitizing the innards of empty McDonald’s and Canadian Tire outlets across Toronto proper. But “I’m living on my savings, now. Just bleeding.”

“Can we have this kind of a labour market without the negative impacts?” Prof. Lewchuk asks. “We need to think about how to bring some stability into these precarious jobs.”

WHAT IS WORKING POVERTY?

It’s a tricky question to answer – so much so that attempts to measure or address working poverty can be stymied because it’s difficult to agree on what it is.

An even more basic problem is how you define poverty. Do you change it depending on where you live? Do you use the cost of basic necessities? What counts as a “basic necessity”?

Metcalf’s researchers wanted something representative, says co-author John Stapleton, but they also wanted figures they could be confident in replicating. Some measures may no longer be available without Statistics Canada’s long-form census.

In the end, they picked a fairly conservative definition. A member of the working poor is someone between the ages of 18 and 64; not a student; lives independently; has earnings of at least $3,000 a year and an after-tax income below Statistics Canada’s Low-Income Measure – 50 per cent of the median income for the Canadian population in a given year.

In 2005, this was $16,536 for a single person living alone. This figure is far lower than other definitions of poverty.

WHO ARE THE WORKING POOR?

According to Metcalf’s study, working people living in poverty are younger than average. They’re more likely to be immigrants. They’re more likely to be single, but if they have a family, chances are they’re a single parent or there’s only one breadwinner in the household.

Their education levels are, on average, lower than working people who aren’t poor: About 48 per cent have high school or less, and 52 per cent have some higher education.

But, significantly, they are working – a lot: On average, they work almost as many hours as people who are employed and making a decent living, and the working poor are likely to have multiple sources of income.

(The Metcalf Foundation’s study uses the most recent income and demographic information available – the 2006 census. The figures are dated, especially given the huge economic shifts post-2008, but researchers say the trends the maps show are instructive. They hope to update their data once Statistics Canada comes out with more detailed census information next year.)

TRANSIT MATTERS

A constant over the past decade is that socioeconomic mobility relies on ease of physical mobility. With the significant exception of Regent Park’s dense pocket of downtown destitution, the areas with high rates of working poverty tend to be places that don’t have access to good public transit.

Swaths of the inner suburbs, built for car-driving 1950s households, are now home to people who work but don’t make enough to get by – and are often stuck there.

City planners like to say Toronto has a great transit system – for a city of one-million people.  But with a population close to three times that, it’s nowhere near adequate.

A SLICE OF SCARBOROUGH

For the past several years, the area just northeast of Danforth Avenue and Victoria Park Avenue has been host to one of Toronto’s highest concentrations of working poverty. The area is 14 times denser than the city average. Almost all its residents (99.7 per cent) live in high-rise apartments. After-tax income for an average household is about 40 per cent the Toronto average. More than two-thirds of residents came to Canada as immigrants, but most are citizens.

And they’re educated: Almost 37 per cent of those over 15 have a university diploma or degree. That education level is somewhat of an anomaly. So, too, is the area’s transit situation: It’s right beside the Bloor-Danforth subway, so mobility is less of an issue. The area’s housing stock and its concentration of recent immigrants play a role.

“Employment is a huge issue in our area,” says Councillor Michelle Berardinetti, who remembers snaking lines of unemployed outside her husband Lorenzo Berardinetti’s MPP office almost as soon as the recession hit in late 2008.

“I wouldn’t say its really gotten better. People are still finding it hard to find good employment.”

THE BIRCHMOUNT CORRIDOR

The authors of Metcalf’s study point to the Birchmount corridor to illustrate the challenges facing the city’s lowest-earning workers. The strip runs from Steeles almost to the water, through several priority neighbourhoods – Steeles L’Amoreaux, Dorset Park and Kennedy Park. These are pockets of poverty Toronto designated years ago as areas underserved by municipal resources. Targeting resources to community groups in areas like Steeles L’Amoreaux has paid off, but this corridor still lacks some of the most basic local services.

While areas with a significant percentage of the working poor are scattered all over the city, the maps demonstrate a shift to the city’s east end: Some of the census tracts with the sharpest increase in working poverty are east of the Don Valley. Lower prices, and towering, decades-old rental buildings, make the sprawling residential areas an affordable place to live.

A NEIGHBOURHOOD’S EYE VIEW

Researchers in Toronto and Hamilton are trying to figure out how precarious employment affects communities at the micro-level. They’re focusing on two places in Toronto: the eastern side of downtown, near Parliament, and the Weston Mount Dennis area, in the city’s northwest. Eastern downtown is a traditionally gritty few blocks in a rapidly gentrifying area; Weston Mount Dennis, has been hard hit by industrial closures.

“We decided to do this on a neighbourhood level and sort of drill down a bit more: It’s a smaller economic unit,” says Ryerson University professor Grace-Edward Galabuzi. “Are there services in the neighbourhood, economic opportunities in the neighbourhood, that could mitigate some of that precariousness?”

The working hypothesis, he says, is that unstable work affects individuals and families but it also undermines a community’s coping mechanisms, making it harder to bounce back.

< http://www.theglobeandmail.com/news/national/toronto/globe-to/the-poor-in-toronto-theyre-working-but-not-getting-any-richer/article2334814/singlepage/#articlecontent >

President Obama’s State of the Union speech was surprisingly bullish on reviving manufacturing, prompting one very clever person on Twitter to say something along the lines of: “Democrats want the economy of the 1950s, while Republicans just want to live there.”

It got me thinking: What did the economy look like in the 1950s? If you could organize all the jobs into buckets and compare the paper-shuffling professional services bucket to the manufacturing bucket, what would they look like around 1950, and how has the picture changed in the last 60 years?

National Journal addressed just this topic in its special report on the rise and fall and rise of manufacturing. The spectacular graphic compares employment by sector in 1947 and 2007 and its most important lesson is a whopper. Manufacturing and agriculture employed one in three workers just after World War II. Today, those sectors employ only one in eight.

< jobs employment sector industry 1940 2007.png >

The champion in the last six decades was finance, insurance and real estate, which doubled its share of employment from 10.5% to 21.4%. But the broader service industry — including professional and business services (a broad catch-all with marketing, managing, consulting, computer services) and health and education services — also grew from about 13% to about 30%. Everything else has stayed pretty much the same. Government, wholesale/retail, information, and construction account for a little more than a third of the economy today, and they accounted for a little more than a third of the economy 60 years ago.

The big story about American jobs in the post-war period is this: The manufacturing/agriculture economy shrunk from 33% to 12%, and the services economy grew from 24% to 50%. I don’t want to leave you with a facile explanation, but for the purposes of space, I think it’s acceptable to say that as manufacturing and agriculture got more efficient, they required fewer American workers, while the services industry (which had slower efficiency gains since it has more person-to-person work) required more employees to keep up with the rising demand for consulting, nurses, teachers, computer technicians, and so on. This isn’t a sad story, or a happy story. It’s just what’s happening, and it’s not accurate to think we can change it very much by, say, creating a panel to badger China’s trade practices, as the president has proposed.

Closing thought: Why isn’t anybody talking about the tragic decline of agriculture? The industry’s share of workers has fallen by 80 percent in the last 60 years. Nobody seems to think that’s much of a tragedy, but we do consider it tragic that manufacturing has lost 60 percent of its share over the same period. Are we being hyperbolic about the decline of manufacturing, in particular, or are we being way too stoic about the greater loss in agriculture employment? Open question.

Update: I should have made this point more clearly: Manufacturing jobs have declined as a share of the economy. But manufacturing hasn’t declined as an industry. It’s grown. By a lot. Here’s total industrial production (manufacturing, utilities, and mining output) indexed to 1945. Output has sextupled.

manufacturing 1947 2007.png

< http://www.theatlantic.com/business/archive/2012/01/where-did-all-the-workers-go-60-years-of-economic-change-in-1-graph/252018/ >

Lilia Martinez is happy to clean offices, cook in a restaurant, look after children — you name it.

But the 52-year-old Mexican immigrant, who has done all of these jobs, has had trouble finding a Toronto employer willing to pay her the minimum wage.

“I like to work. I won’t take welfare,” Martinez says through a Spanish interpreter. “But in the past, I have found they only want to pay cash.”

“I can’t survive on what they pay,” adds the social worker and former factory owner, who came to Canada in 2008 to escape a violent 30-year marriage.

The truth is, however, Martinez and most other Ontario workers struggle even when employers pay the provincial minimum wage of $10.25 per hour, say workers’ rights advocates.

They are hoping Queen’s Park makes good on its election promise to appoint a minimum wage advisory committee as part of its annual progress report on poverty reduction, which is being released Monday.

They also want the government to make permanent a two-year, $6-million labour ministry initiative launched in 2010 to clear the backlog of workplace violation complaints.

Now that the backlog is cleared, advocates want the money pumped into proactive enforcement of Ontario’s Employment Standards Act, the province’s minimum workplace regulations protecting low-wage, vulnerable workers from abuse. Currently, there are only 20 ministry investigators working in this area.

“The government says the best route out of poverty is a job,” says Deena Ladd of the Workers’ Action Centre, a non-profit, worker-based organization. “But people working full time earning minimum wage are still having trouble paying the bills.”

Between 2003 and 2010, the McGuinty government raised the minimum wage from $6.68 to $10.25. There was no increase this year.

Meantime, TTC fares are going up by 10 cents, rents are rising by 3 per cent, and services are being cut.

“Increases to the minimum wage are the only pay raises people like Lilia Martinez ever get,” Ladd says. “That’s why it is important minimum wages reflect the cost of living.”

And enforcement is key to ensuring workers get what they are owed.

“Any initiative the government takes to alleviate poverty for low wage workers has to be backed up by enforcement,” Ladd adds.

A survey of 520 low-wage Ontario workers released earlier this year found about one-third were victims of wage theft, either because they weren’t paid the minimum wage or weren’t paid for the hours they worked.

The report urged Ontario’s labour ministry to proactively target employers in high-violation industries such as hospitality, cleaning, retail and construction, which attract newcomers, young workers, visible minorities and other vulnerable workers.

In June, Martinez found an office cleaning job that pays minimum wage. She is delighted to be bringing home an official paycheque and proud to be paying taxes in her adopted country. But because she works just five hours a day — from 5 p.m. to 10 p.m. — she only earns about $1,100 a month. It’s not enough to make ends meet.

Martinez realizes she would have more options if her English was better, but she can’t afford to go to school on such low wages.

“I am desperately looking for full-time work,” she says. “My story is the story of a lot of Latin American women living here. We are trying to make a contribution, but it’s hard to find employers willing to treat us fairly.”

< http://www.thestar.com/news/canada/article/1103783–minimum-wage-hike-key-to-cutting-poverty >

Many unemployed Canadians are ineligible for Employment Insurance, so that welfare becomes their only alternative.  But welfare rates are low, especially for single employable recipients.  Further, applicants must exhaust their financial assets, and the paternalistic requirements of welfare are stigmatizing.  As a consequence, it is difficult to bounce back from welfare into the economic mainstream.  The solution most often proposed has been to loosen the rules for Employment Insurance; however, we show in this paper that many unemployed workers would still be left in the cold even if we did that.  Something is needed between Employment Insurance, with its relatively higher benefits but limited reach, and welfare, to which anyone in need can apply but only for inadequate benefits.  We propose a new temporary income measure to fill the gap between Employment Insurance and welfare – the Jobseeker’s Loan.

ISBN – 1-55382-550-0

< http://www.caledonInst.org/ >

Employment insurance is at the heart of Canada’s social safety net.

You pay into the system when you work, and you collect if you’re laid off.

But EI might be one the most unjust and economically inefficient government programs.

You pay 1.78 per cent of pretax income up to a maximum of $786.76 a year whether you’re a logger in Nanaimo, B.C., or a doctor in Yarmouth, N.S.

But what you earn and how long you must work to collect is determined by the unemployment rate in 58 zones rather than real need.

A new report this week from the Mowat Centre for Policy Innovation at the University of Toronto says the $22-billion EI system is out of step with the modern workplace. Canada should have a simpler and more equitable EI regime, with common eligibility standards and identical benefits, concludes a Mowat task force that spent months consulting Canadians and researching. A recent C.D. Howe Institute study urged similar reforms.

It’s a long way from what the country has now.

An administrative assistant laid off in Corner Brook, Nfld., who worked as little as 10 weeks will pocket $468 a week for 45 weeks – the maximum – for a total of about $21,000. A comparable worker in Saskatoon would have to have put in about 18 weeks and could earn benefits for only 36 weeks, or a total of $16,848. Someone doing two jobs who loses one of them is likely to get nothing.

Local unemployment rates are a bad predictor of how hard it will be for an unemployed worker to find a new job, the Mowat report says.

“EI is the last program left that is a hangover for handling interregional problems,” Mowat Centre director Matthew Mendelsohn said in an interview.

Newfoundland recoups about $5 in benefits for every $1 it puts in. Ontarians get about 60 cents.

Fewer than half of jobless Canadians get EI. That’s down from about 80 per cent in the mid-1990s, when Ottawa made the program less generous to save money.

“The number of people outside Canada’s social safety net is growing and growing,” said Mr. Mendelsohn, an academic and former top federal and Ontario government official.

The program was built for the 1970s, when workers spent most of their careers with one employer. Today, Canadians are more likely to change jobs, work part-time or be self-employed. Structural changes in the economy mean some lost jobs may never return and some workers will need more training to make them employable.

“We are going through a period of transition from labour surpluses to labour shortages,” Mr. Mendelsohn said. “We need people to be participating in the labour market as fully as possible.”

In some parts of the country, work is scheduled around the seasons to squeeze the more out of EI.

It isn’t efficient, says Arthur Sweetman, an economics professor and Ontario Research Chair in Health Human Resources at McMaster University. “It’s hard to make the labour market work well because of EI,” he said. “People are sitting at home when they could be productive.”

Employers have also learned to exploit the system. Auto makers use EI to subsidize the retooling of their plants by essentially mothballing their workforce. Municipal school boards lay off bus drivers, cafeteria workers and cleaners in the summer.

“A lot of companies across the country structure their work life around the parameters of EI,” says Dr. Sweetman, who reviewed some of the Mowat research. “It’s a way that Canada has chosen to operate and politicians are fully aware that this is happening.”

The Mowat Centre estimates its proposals would cost $2.3-billion. The biggest single expense would be a $900-million wage insurance program.

EI critics see the new majority government as a chance for change, especially as Prime Minister Stephen Harper isn’t beholden to regions that would lose out, including Atlantic Canada and rural Quebec.

The Mowat Centre is calling for single, national eligibility requirements. The result would be stronger safety net and a more efficient labour force.

“There’s been an economic shift within Canada, and that may open up some political space for reform,” said political science professor Keith Banting, research director on the Mowat task force.

Call for reforms

Other recommendations from the Mowat Centre for Policy Innovation:

- Expand EI-sponsored work-sharing during economic slumps.

- Test a system of wage insurance for long-tenured unemployed workers so they don’t drop out of the labour market

- Transfer special retraining funding from the EI system to the provinces. That would reduce premiums and mean that funds could benefit workers who aren’t eligible for EI.

- Create a system of temporary unemployment assistance outside EI for workers who don’t qualify, including part-timers, immigrants, young workers and the self-employed.

- Barrie McKenna

< http://www.theglobeandmail.com/news/national/time-to-lead/employment-insurance-system-unjust-and-inefficient-report-finds/article2236234/ >

< http://www.theglobeandmail.com/news/national/unemployed-canadians-by-province/article2236043/?from=2236234 >

A new report says the Employment Insurance system is broken and needs a more transparent, effective and equitable national framework.

The report by a task force from the University of Toronto’s Mowat Centre says the EI system is complex, opaque and not easily understood by contributors.

It says the current program has failed to keep up with societal and economic change and it’s widely recognized that there are deep problems at the core of the system.

Too many people, it says, are being left out of the social safety net, too many are carrying an unfair burden and too many are not achieving their potential.

The task force, co-chaired by former Saskatchewan premier Roy Romanow, found only 46 per cent of the country’s unemployed received EI benefits last year, compared with 86 per cent in 1981.

It also says EI is the only federal program that relies on region of residence as a basis for determining benefits — a particularly poor criterion, says the panel.

“Other important federal social programs, like Old Age Security and the National Child Benefit, treat Canadians equally regardless of region of residence,” it notes.

Furthermore, it says many of those who would benefit most from training are not eligible for federally funded programs because they do not meet EI criteria.

The panel also included co-chair Ratna Omidvar, president of the Maytree Foundation and Keith Banting, a leading social-policy scholar who served as its research director.

The group commissioned several independent research papers on EI, each of which addressed a different area of the system and presented possible options for reform.

It identified seven objectives to guide an income-security program for workers, including the need for transparency, fiscal responsibility, sensitivity to economic conditions and changes in employment and to provide adequate support when required.

Its report makes 18 recommendations aimed at making the EI program “more equitable, more transparent, and more consistent with the contemporary labour market.”

“They are designed to be a source of national unity, rather than inter-regional disputes,” it says.

Among its recommendations:

• A single EI entry requirement and benefit duration range for all workers, reducing both region- and industry-specific subsidies, increasing transparency and restoring fairness to the system.

• New federal temporary unemployment assistance for the “substantial number” of unemployed workers who don’t qualify for EI benefits and are ineligible for provincial social-assistance programs.

• More flexibility in special benefits to help the disabled remain in the labour force, more choice for parents when taking parental leave, fair treatment of temporary foreign workers and suggestions for improved financing and management.

“The recommendations should be considered as a package with all proposals adopted simultaneously,” says the report.

“While the recommendations would lead to a modest increase in federal spending, the proposed system could be calibrated to suit governmental preferences on generosity and incentives and to reflect the state of the economy.”

< http://www.thestar.com/business/article/1087073–is-our-ei-system-broken-only-46-per-cent-received-unemployment-benefits-last-year-report-finds>

The plight of young workers in Ontario is certainly troubling.

With an unemployment rate (15.7 per cent) nearly double that of the average worker in the province, the number also masks the permanent effects that long-term high unemployment rates can bring. The list notably includes: (1) lower lifelong earnings than comparable labour market participants who enter the labour force during a boom; (2) the misallocation of talent that occurs when workers accept jobs they wouldn’t otherwise choose under better circumstances or are best suited for; and (3) the psychological toll that ends up hurting not only the young workers themselves but their families and friends. So we should all be concerned about high youth unemployment even if we aren’t part of this demographic group.

ndeed, if only out of self-interest, we should be mindful that countries with large numbers of out-of-work youth are susceptible to the kind of social dislocation seen recently in London and Athens. To paraphrase economist David Foot, young people without opportunities either leave the counties they reside in, or tear them apart. The 2005 riots in Paris, attributed at the time to France’s frayed race relations, were in large measure a consequence of the significant numbers of French youth (who also happened to be first-generation immigrants) who had never had any experience with France’s formal labour market.

What can be done? The short answer: Grow faster. Our economy is stalled and has been since the fall of 2008. Young workers are the proverbial canaries in the coal mine, acutely experiencing the consequences of record low levels of economic activity and consequent lack of new job creation. If companies stop hiring, as a first response to a downturn in sales or available financing (as was the case in 2008), they inevitably stop hiring new labour market entrants.

Workers 16 to 25 are not alone in this regard. Try asking an immigrant who’s just landed in Ontario how easy it is to find a job (the unemployment rate for immigrants “landed five years or less” is 16.7 per cent, slightly higher than the youth rate). Or ask the person who’s accompanied their relocated spouse to Toronto. Or the recently laid off middle-aged worker. Or the mother who’s decided to return to the labour force after an extended maternity leave. Pretty much anyone who’s either moved to Ontario from abroad or re-entered the current labour market has suffered.

So the focus on youth unemployment is certainly warranted, but the rhetoric needs to be extended on several fronts. First, we need to recognize that the underlying variable that high youth unemployment is truly measuring is the difficulty any new labour market entrant is facing in finding a job. Second, that the cause of this latest uptick in youth unemployment has its origins in a set of macro-economic problems and is not a function of micro-economic tweaks to training programs for the young, tax credits for employers or better job-matching efforts. Third, we need to be thinking about a bold new growth agenda that reverses our macro-economic malaise, an agenda that takes advantage of historically low public borrowing rates to build on long-term investments and is environmentally sustainable and tailored to Ontario’s older, more urbanized society.

Ontario has a history of taking such a bold path. While the global economy was mired in stagflation during the 1970s, Ontario outperformed almost every jurisdiction in North America, and its unemployment rate remained at or below 6 per cent (12 per cent for youth). The reason was simple. Between the end of the Second World War and the early 1970s, the province responded to urgent new needs – prompted by the baby boom and by earlier shortfalls related to war and the Great Depression – with the creation of an almost three-decade-long infrastructure boom that effectively created the core of Ontario’s current public infrastructure. Most of the elementary and secondary schools still in use, 11 new universities and a new community college system, the two main lines of the Toronto subway system, key portions of the 400-series highway network, and much of our health care infrastructure were all part of this investment.

Sadly, that era of visionary investment ended in the 1980s. From 1980 to 1999, the average growth of per capita net public stock (including all our roads, schools, hospitals, transmission lines etc.,) was negative, meaning we allowed our public investments to depreciate at an alarming rate. These decades of neglect significantly eroded Ontario’s capacity to meet the economic and social needs of the 21st century.

The global growth slowdown is only unmasking what’s been at the root of our collective woes for nearly three decades. This threat to our long-term economic competitiveness and standard of living is most acutely being felt by our new labour market entrants. To reverse that stubbornly high rate of unemployment for our young, we need to step up the growth agenda and leave aside any talk of micro-economic miracles.

Rafael Gomez is an associate professor in employment relations at the Centre for Industrial Relations and Human Resources at the University of Toronto.

< http://www.theglobeandmail.com/news/opinions/ontarios-youth-unemployment-we-must-step-up-the-economic-growth-agenda/article2163391/ >

Details on Canadian job-seekers are abundant, ranging from where they live to their age and gender to how long they’ve been out of work. But relatively little is known about the demand side of the equation – the employers with current job openings.

That’s about to change. Statistics Canada plans to launch a new monthly job-vacancy survey this fall, a move that will shed light on a key aspect of the labour market that has long puzzled economists and policy makers: where the jobs are.

The agency will start an official index in the autumn that will track vacancies by province and industry and, eventually, how that changes over time, The Globe and Mail has learned. Statscan has also just completed a pilot project that gathered detailed data on job openings and, starting in the fall of 2012, plans to release an annual study that explores job vacancies by occupation, labour shortages and hard-to-fill positions.

The move will offer new insights into the state of the labour market. While detailed information exists about the supply side of employment, little is known about the demand side. This indicator – already available in the United States, Scotland and Hong Kong – will show, for example, which regions may be struggling to fill positions and which have few job openings.

These new measures “will complete the picture,” said Yves Decady, analyst at Statscan’s labour statistics division. “This area has been identified as a data gap in the country’s statistical system, so it is a priority.”

He expects it will help both job seekers and employers in the job-search process. Also, comparing unemployment on one side and job vacancies on another will give a ratio that will show the degree of tightness in the labour market, he added. The data can be used as indicators of the health of the economy, as well as showing the inflationary pressure on wages.

A better understanding of current needs is also key to analyzing any shifts in the labour market. And having a clearer sense of present conditions should, in turn, help policy makers make more realistic assessments of future needs.

The new analysis should paint a picture of which regions have high unemployment and which have an elevated need for workers, highlighting whether there is a geographic mismatch in the country. It could also help predict more accurately looming labour market needs, a useful development for provincial governments, newcomers to Canada, recent graduates and economists.

The monthly survey will ask employers how many, if any, vacant positions exist and whether they are actively trying to fill those positions from outside the organization. It will be distributed as part of Statscan’s mandatory monthly questionnaire on payrolls, which asks about earnings and employment levels.

The new insights represent “an important advance,” said Craig Riddell, economics professor at the University of British Columbia.

However, there are challenges in measuring vacancies, he said. Not all employers have a clear handle on their current openings, especially at larger organizations.

This isn’t the first time Canada has attempted to track openings. A help-wanted index, based on the number of want ads published on a Saturday in 22 Canadian newspapers, was “remarkably good” at predicting labour market trends and used by the Bank of Canada, Mr. Riddell said. But as use of classified ads declined in favour of online advertising, the index’s usefulness diminished and it was discontinued in 2003.

Some employers are skeptical because it can be tough to answer questions on openings. “At an organization like ours, sometimes if there’s someone with a scarce skill [like an experienced medical technologist], we’ll grab them. So in a way, we’re always hiring,” said Jane Graydon, director of human resources for BC Biomedical Laboratories, which employs 750 people and is based in Surrey, B.C.

< http://www.theglobeandmail.com/news/national/time-to-lead/time-to-lead-archives/new-statscan-survey-aims-to-pinpoint-where-the-jobs-are/article2068653/ >

Robert Berger is working on something deeply futuristic: a hybrid of window shade and solar panel. It not only lets light in or out, it also powers your household gadgets.

But Mr. Berger, president of MW Canada Ltd., is not toiling in a hothouse tech firm. He’s a third-generation champion of an industry most Canadians think of as a metaphor for the decline of Canadian manufacturing: textiles. But if it can negotiate an ever-shifting maze of trade rules, particularly in the United States, the battered industry stands to surprise Canadians with a value-added comeback.

“Imagine your window covering storing enough energy from the sun daily to power all your rechargeable home electronics,” Mr. Berger says. His firm, based in Cambridge, Ont., is collaborating with universities on nanotechnology that makes textiles into powerful performers, from the solar blinds to materials that promise to replace car batteries, to construction materials that rival steel in strength.

“We need to be at the leading edge of all these technologies,” Mr. Berger says. The new generation of textiles will be on the market in less than five years, he adds.

MW Canada was founded in Montreal by Mr. Berger’s grandfather as Montreal Woollens in 1963. In a process of continual reinvention, the company has evolved from making fabrics for the clothing industry to supplying upholstery textiles, airplane blankets, health-care materials and water-filtration products.

Innovation by firms like Mr. Berger’s helps explain why reports of the death of Canada’s textile industry are greatly exaggerated.

The industry, it’s true, has been clobbered by unfettered foreign competition, a high Canadian dollar and eroding free-trade benefits for much of the past decade. Between 2005 and 2009, for instance, textile shipments plummeted 43.5 per cent, while manufacturing as a whole only sank 18.1 per cent, according to Statistics Canada.

The firms that have survived this dramatic contraction are generally smaller and more nimble than in the industry of old. Many, like MW Canada, have ditched their old business models, which focused on high-volume commodity products, to become high-tech pioneers.

Having invested hundreds of millions of dollars in state-of-the-art machinery, plants and retraining for staff, these manufacturers are increasingly focused on products with specific applications – known, as a group, as technical textiles. These short-run, cutting-edge products are in demand for numerous industries, including defence, health care, energy, mining, construction and transportation.

While the commodity side of the business has turned into a race to the bottom that legacy companies cannot win, the new wave of technical textiles allows firms in Europe, the United States and Canada to compete again – in a value-added race to the top. The fast-growing market for technical textiles is already estimated to be worth $128-billion (U.S.) in annual sales.

The Conference Board of Canada is forecasting that the country’s textiles and apparel industry will see a “modest profit” of $13-million in 2011 after recording losses for the past two years. The board sees profits reaching $97-million by 2015, even factoring in a higher loonie and climbing energy and raw material costs. Output and exports are also trending up after years of declines.

As for employment in the sector, the industry agrees that the figure of 43,526 direct and indirect jobs, recently computed for the Textiles Human Resources Council, is a reasonable estimate. But discrepancies in statistics gathered by the industry and government make it difficult to establish how much employment has fallen since the industry’s heyday.

Despite the recovering profit and production numbers, the industry is having a hard time shaking its reputation as a hopeless case. The view of some, like Kathryn From, is that Canadian textile manufacturers never fully recover.

“They didn’t change with the times, and frankly I think it is too late,” says Ms. From, managing director of Bravado Designs Ltd., a Toronto-based maker of nursing bras. The company selects textiles purchased by the overseas factories that make its products. “I don’t know why anybody would put money into the textile business in Canada unless it is a very, very niche opportunity.”

Patrick Riga, a Montreal-based commercial account manager with Bank of Montreal who has worked with Quebec’s textile industry since 1993, has heard about immigrant families dissuading their children from working in the business.

“A lot people were working for 30, 35 years at the same corporation and ended up the next day with nothing – no pension from the company,” Mr. Riga says. “It created a hardship on a mainly immigrant community, especially in Quebec.”

In an industry with a looming talent shortage and an aging work force, the image problem is making it difficult to attract skilled workers, says David Kelly, executive director of the Textiles Human Resources Council.

Mr. Berger of MW Canada thinks the industry’s past-it public image is simply out of date. “When you say the word ‘textile’ to the average person, they think of a sweatshop or T-shirts. You know, the old Norma Raemovie. That’s really not what we are,” he says.

“It is an old image problem,” agrees Ronald Audet, chairman of FilSpec Inc., a Sherbrooke, Quebec-based producer of specialty yarns. “The industry is stronger than we’ve been.” Like MW Canada, FilSpec has jumped up the value ladder, illustrating the hopeful trend in the industry. But its bumpy ride also speaks to how easily firms’ prospects can by capsized by the changing tides of trade rules.

Founded in 2004, FilSpec rose from the ruins of Cavalier Textiles, a commodity supplier. Like many firms in the Canadian textile industry, particularly the large Quebec contingent, Cavalier prospered under the Canada-U.S. free-trade agreement and North American free-trade agreement, which opened up the U.S. and Mexican markets in 1989 and 1994, respectively. Exports by the Canadian industry increased fourfold between 1992 and 2000, according to a report by the Quebec government.

The latter year, however, was the industry’s apex. As free trade gave, it also took away, with the admission of China to the World Trade Organization in 2001 and the expiration in 2004 of the Multifibre Arrangement, which had imposed quotas on developing countries’ exports of products like yarn, fabrics and clothing.

The Canadian industry was suddenly faced with competition from lower-cost producers, not to mention the dampening affect of the high-flying loonie on exports. But as it has staggered back from those body blows, the industry has also learned that “free trade” is a sometime thing. Although the United States promoted North American free trade at its inception and is a signatory to NAFTA, the country that accounts for 81 per cent of Canada’s textile exports has also enacted other measures to protect its domestic industries. New bilateral trade agreements have had the side effect of hip-checking some Canadian products out of the American market, while preferential procurement policies have more explicitly shut the door to Canada.

“Measures that preclude the use of Canadian textiles by U.S. customers, or that favour U.S. textile manufacturers, are proliferating,” says Elizabeth Siwicki, president of the Canadian Textile Industry Association. Ms. Siwicki contends that an ongoing reluctance by the federal government to address problems with NAFTA is eroding her membership’s access to the U.S. market.

The most aggravating new American trade agreements are a pair signed in 2000 and 2004 that open up the U.S. market to more than a dozen countries in Central America and the Caribbean – the site of much of the offshoring of the commodity side of the textile business from both Canada and the U.S.

With very limited exceptions, the treaties effectively bar the use of yarns and fabrics that are not produced in the U.S. – so if a Canadian input like, say, yarn, is used to make products in the Dominican Republic, the finished goods do not qualify for duty-free entry into the U.S.

“That is a big issue because all of a sudden our customers that we developed and nurtured under NAFTA say to us, ‘Sorry, we can’t buy from you,’” Ms. Siwicki says.

Canadian products have also been deemed impure by procurement policies. After U.S. stimulus legislation was enacted in 2009, many of MW Canada’s stateside customers threatened to cancel orders for its waste water filtration media because the products were destined for use on jobs that suddenly had to be 100-per-cent American-made.

MW Canada scrambled to adjust, eventually finding a U.S. partner that agreed to provide workers if MW supplied the necessary equipment for its North Carolina plant.

“What really burned me is that we did all the development work in Canada and I don’t produce it here,” Mr. Berger says. “That’s so dumb. Isn’t that the kind of innovation that we want in Canada?

“It is a crime – we’re shipping jobs away from here. You know, I say to our politicians, you are making us do business with one hand tied behind our back.”

In February, 2010, the U.S. and Canada signed an agreement that gave relief to Canadian suppliers – but only on contracts in some states, and of those, only contracts over sizable value thresholds.

The new trade agreements and the creeping expansion of existing procurement policies – notable among the latter is the Berry Amendment, which restricts military buying to American suppliers – prompted FilSpec to purchase a U.S. plant in 2009. It employs almost 180 people, slightly more than FilSpec’s Canadian work force.

The acquisition enabled the company to continue selling yarns to U.S. customers who make products for the U.S. Army. A larger U.S. presence also allowed FilSpec to hedge against the rising loonie by buying and selling more in U.S. dollars. American sales now account for 70 per cent of FilSpec’s business.

With the Canadian dollar regularly trading above parity, FilSpec is mulling making more acquisitions south of the border. Indeed, industry executives say they have ever-fewer reasons to make acquisitions or other investments in Canada because Ottawa has failed to champion their industry at home.

For instance, unlike its U.S. counterpart, the federal government does not compel the Department of National Defence to buy from Canadian manufacturers. “If you haven’t got the government procurement, if you haven’t got good trade agreements, if you don’t have a domestic market, then the industry is not going to invest,” Ms. Siwicki says.

Yet another sore spot between the industry and Ottawa is the Least Developed Countries Market Access Initiative, which eliminated quotas and duties on imports from scores of developing countries in 2003. That change by itself touched off a spate of plant closings in Canada, while forcing other manufacturers to move production offshore.

Ottawa, though, has unfurled a number of initiatives to help the industry – it has eliminated tariffs on raw materials and equipment that the industry imports from abroad, and provided a modest amount of funding for industry programs.

The next concern for the industry is, not surprisingly, new rounds of trade talks. There are fears that the industry’s rustbelt reputation will taint the perceptions of politicians as Canada negotiates monumental agreements with the European Union and India.

“India as a big market. Europe is a big market,” Ms. Siwicki says. “It is important that the Canadian negotiators come back with something that gives us true access to those markets.”

< http://www.theglobeandmail.com/report-on-business/economy/manufacturing/the-high-tech-rebirth-of-canadas-textile-industry/article2066077/singlepage/#articlecontent >

Workers at the bottom of the pay scale have long been among the most exploited. Their desperation to keep a job they can’t afford to lose makes them easy targets for unscrupulous employers.

But the extent to which vulnerable workers in Ontario are being ripped off by some employers, as outlined in a new study, is startling.

One in three low-wage workers has had wages unfairly withheld or outright stolen by employers, according to the Workers’ Action Centre report. For some, it’s paycheques that are short hours, for others it’s being denied vacation pay or forced to work copious overtime hours for no pay at all.

This amounts to “wage theft” and an indictment of the government’s ability to enforce its labour laws and regulations on behalf of those who need the protections the most.

High-violation industries such as cleaning, hospitality and construction are often the only places that newcomers, young people and other vulnerable workers can find a job.

When they are taken advantage of they can’t file a grievance with their union because most don’t have one. They can’t afford to hire a lawyer and even if they could, they fear that rocking the boat will mean getting fired. Many don’t even know what their rights are.

So a complaint driven system of enforcing the law isn’t good enough. Some workers do get back wages because of labour ministry investigations. But most have little hope of getting all that they are owed or of being properly protected from the next unscrupulous employer.

The province, for example, is in court with one firm over transgressions in 2008. But as theStar’s Laurie Monsebraaten reported last week, the company’s current workers also complain that they aren’t getting their proper wages.

To be fair, the Liberal government has plugged some of the worst holes in the Employment Standards Act by providing protections for temporary agency workers. It has hired 80 more inspection officers and has cut in half the backlog of complaints. But, as the Workers’ Action Centre report makes clear, more must be done.

It’s heartening, then, that Labour Minister Charles Sousa seems to agree. “I recognize that there are people still who are vulnerable and require support,” he said.

A good start would be for him to implement some of the report’s recommendations for change. When a substantial complaint of wage theft is verified, that should trigger a broader labour investigation into the company involved. And the ministry needn’t wait for complaints to roll in. Inspectors should more proactively target employers in high-violation industries.

On paper, Ontario has strong laws. But they need to be enforced in a way that offers real protection for the poorest and most vulnerable workers.

< http://www.thestar.com/opinion/editorials/article/991656–enforce-our-labour-laws >