The high cost of low wages

Posted on August 22, 2008 in Debates, Governance Debates, Inclusion Debates – Opinion – The high cost of low wages: Society and economy benefit when all jobs provide employees with a living wage
August 22, 2008. John Cartwright

Here’s a trick question: Why should billion dollar corporations be allowed to pay poverty wages in Canada?

Not long ago the answer would have been fairly easy – they shouldn’t. But in the last 20 years, the dominant economic model has created both a massive concentration of capital at the top and a growing number of poverty level jobs at the bottom.

Even as the economy is stalling and thousands are losing their jobs through plant closures, big oil is announcing record profits. The banks are doing very well, thank you, while payday loan operations spring up in every poor neighbourhood. In all sectors, companies are sourcing temp agencies instead of offering stable full-time jobs.

Three years ago, the Labour Council released a study showing that more than 1 million workers in Greater Toronto earned less than $29,800 a year.

That was news to some (how can you put a roof over your head for less than 30 grand?) but reality to many others (if only I could earn as much as that in a year!).

Since then, a number of other reports have shown who is impacted by low incomes. Whether it is on a neighbourhood basis as outlined by the Three Cities report, or looking at racialized communities through the Colour of Poverty campaign, the results are disturbing. But they are not surprising for those of us who are on the front lines with low-wage workers.

The continent-wide Hotel Workers Rising campaign to raise standards in the hospitality sector is led by immigrants and workers of colour. Their story is easy to understand – they work for global hospitality companies yet there are still hotels that pay housekeepers less than $15 per hour for cleaning 17 rooms a day. In places without a union, that figure drops in some cases to less than $11 per hour. How can anyone raise a family on those kinds of wages?

The same union is organizing food service workers employed by global companies like Aramark, Compass and Sodexo. Recently a group of Aramark workers at Seneca College were forced to strike for a first contract just to bring the lower classifications over the $10 mark.

The story is the same for cleaning contractors, where the Justice for Janitors campaign is slowly raising wages above $10 or $11 an hour in the face of massive employer resistance.

These kinds of stories are repeated time and again in Canada’s largest urban centre.

Hospital workers being displaced by contractors paying just above minimum wage; home-care delivery being taken over by companies that classify everyone as “independent contractors” to avoid paying good wages, holiday or sick time. The list goes on. The historic BCE buyout was proceeded by massive outsourcing of operator and information work, and Enbridge has done the same thing.

What makes headlines are the layoffs in manufacturing.

Standing with the workers at Progressive Moulded Products when the company shut its doors was a gut-wrenching experience for anyone who cares about the future of work in this region. The faces were every colour in humankind, the majority from South Asia, China and the Caribbean. These people produced auto parts for the Big Three, but had never unionized.

Earning from $14 to 17 per hour, they were hardly at the top of the food chain. For days, they tried to block the machinery being taken away until they got their severance pay, but to no avail. The courts ignored their rights under law but issued injunctions within hours to corporate creditors.

The just-in-time economic model is failing many Canadians.

But fortunately, these aren’t the only stories to tell. Most of us do find that our knowledge and skill is rewarded.

Toronto has the most productive construction workforce in North America, a result of the contribution of immigrants combined with a strong commitment to training and apprenticeship.

The largest manufacturing plant in the city is Bombardier, where thousands of skilled employees design and produce the DASH aircraft.

In classrooms, health-care and government facilities across the GTA, highly qualified staff deliver strong public services.

We also have the country’s largest concentration of financial services, sciences and professions that provide high salaries.

But the point is that someone will always be cleaning the offices, preparing food and minding the kids and the seniors. These jobs should pay a living wage as well. So should retail, the second largest sector by numbers, although a large portion is part-time.

There is a growing gap between those with decent wages and the working poor. In the private sector, the difference between average and median wages has increased by $1.37 per hour in the last decade. That translates into tens of thousands falling behind, while those at the very top prosper.

Can something be done to secure good jobs for all?

The answer is yes. We only need to look back a few years to see policies in both the public and private sectors that favoured secure, stable employment over the low-wage alternative.

From procurement of local goods and services, to fair labour laws, to investment in social infrastructure and green industry, there are many opportunities to shape a healthy economy with good jobs as its key feature. Some will be different jobs, of course, as the imperative of sustainability transforms our society.

Deliberately choosing a good jobs strategy will require a rethinking of the directions we have been taking in recent years.

Whether there is the political will to make those choices is another matter, but it is the real issue that needs to be debated.

Otherwise, the trick question we started with will get even trickier in years to come.

John Cartwright is president of the Toronto & York Region Labour Council.

This entry was posted on Friday, August 22nd, 2008 at 12:00 am and is filed under Debates, Governance Debates, Inclusion Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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