Unemployment

The Permanent War Economy and Deindustrialization

(Image: Detroit, Michigan, the former centre of America’s auto industry. Source)

Politicians of all political stripes like to dress inflated military budgets, and the wicked arms deals that frequently accompany them, in terms of “job creation.” Former U.S. Defense Secretary Leon Panetta, arguing against any reduction in military funding, claimed that any decrease “would result in job cuts that would add potentially 1 (percentage point) to the national unemployment rate.”[1] Here in Canada, both Stephen Harper and his Liberal counterpart Justin Trudeau have justified the $15 billion arms deal with Saudi Arabia, the largest such deal in Canadian history, as a means of creating jobs. “The fact is that there are jobs in London relying on this” deal, Trudeau said [2].

A closer examination will reveal something different. By not producing a life-serving product, i.e., an article used for either consumption or for further production, military spending is not only the worst of available choices for job creation, it contributes to industrial and infrastructure decay. (more…)

Trudeau ‘Unsure’ About Raising the Minimum Wage

What does Prime Minister Justin Trudeau think about raising the minimum wage?

During a series of interviews with ordinary Canadians aired on CBC Sunday night, Trudeau shared his reservations about provincial initiatives to raise the minimum wage, telling a struggling, low-wage worker he questions if that means “everything just gets more expensive or we have jobs leaving.”

Neil Piercey was one ‘ordinary Canadian’ who got an opportunity to grill Trudeau.

Piercey is a 58-year-old worker from London, Ontario who was laid off from a long-time, good paying manufacturing job, but now finds himself in a low-wage job and without a pension as he nears retirement.

In a clip that didn’t air during Sunday night’s broadcast, but was later uploaded to the web, Piercey asks the Prime Minister if he thinks it would be “a good idea to raise the minimum wage?”

Piercey was told the federal government only controls wages on certain industries that fall under federal jurisdiction (something Trudeau’s Liberals supported raising in 2014 before criticizing it during last year’s election campaign), but then Trudeau went a step further, sharing his thoughts about a few provincial initiatives to raise the minimum wage:

“A number of provinces are looking at raising the minimum wage across the board. There’s always a question of whether or not that has the impact that everyone would like to have. Maybe everything just gets more expensive or we have jobs leaving. We have to be very careful about that.”

Although Trudeau said there’s “no easy solutions” and added that “the possibility” of earning enough to live on is “something that Canada’s always done,” CBC’s Rosemary Barton noted after the broadcast that Trudeau’s message left the struggling manufacturing worker disappointed and “unsure about what will happen to him.”

He might also be disappointed in several problems with Trudeau’s questions about the effectiveness of raising the minimum wage:

1. Raising the minimum wage is highly unlikely to mean “jobs leaving”:
Trudeau wonders if raising the minimum wage could mean “jobs leaving” and relocating elsewhere?

The problem with that, according to the Canadian Centre for Policy Alternatives, is most minimum wage jobs are concentrated in the service industry, so it doesn’t make sense to ship those kinds of jobs to places with lower wages:

“The problem with this argument lies in the kinds of jobs that pay at or near minimum wages. Some 70 percent of people employed at the minimum wage are in the retail, accommodation and food services industries. These kinds of businesses are, in the first place, not highly mobile. Moreover, an increase – even a substantial one – in the minimum wage would be paid by all businesses in these sectors, so that a capital flight would not be the result.”

2. There’s little evidence minimum wage has an impact on unemployment:
It’s also not clear that minimum wage increases means an increase unemployment. A literature review by the Canadian Labour Congress last year concludes there’s little evidence suggesting raising the minimum wage has an impact on unemployment:

“After examining the economic research available on the connection between unemployment and minimum wage increases, it is difficult to say with conviction how the two factors are related, if they are at all … According to The World Bank’s World Development Report 2013: Jobs, there is no known universal impact of the minimum wage on unemployment rates.”

Meanwhile, another CCPA study notes employment is driven more by “demand” than by the minimum wage, suggesting “fear of disemployment effects are overblown by those with a vested interest in keeping wages down.”

3. Raising the minimum wage has minimal impact on prices:

What about Trudeau’s concern that “maybe everything just gets more expensive”?

Numerous academic studies show raising the minimum wage has little impact on consumers, even if the full cost of paying workers were passed on to the customer. A 2011 University of California, Berkeley study estimated raising the minimum wage by approximately $5 would only lead to a 1.1% increase in the average Walmart shopper’s bill at the checkout line:

“Even if Walmart were to pass 100 percent of the wage increase on to consumers, the average impact on a Walmart shopper would be quite small: 1.1 percent of prices, well below Walmart’s estimated savings to consumers. This works out to $0.46 per shopping trip, or $12.49 per year, for the average consumer who spends approximately $1,187 per year at Walmart. This is the most extreme estimate, as portions of the raise could be absorbed through other mechanisms, including increased productivity or lower profit margins.”

Another study out of Purdue University estimated raising the minimum wage for McDonald’s workers by $8 would increase the price of a Big Mac by only 15 cents. And a recent study out of Cornell looking at the impact of minimum wage increases on the US restaurant industry over 20 years found it only translated into a 0.3% to 1.5% increase in costs for consumers.

Nearly half of Canadian minimum wage earners work at companies with 500+ employees. “Large corporations are also paying the bottom wage despite their profitability,” the CLC observes.

4. Older Canadians increasingly find themselves in low-paying jobs:
Piercey also told Trudeau it’s impossible for those earning a minimum wage to save for retirement, to which Trudeau responded by talking about investing in skills training so “people have a chance of getting beyond minimum wage jobs.”

But what good does that do for laid off workers approaching retirement?

Despite stereotypes of minimum wage workers as teenagers and students working part-time jobs, Statistics Canada data shows that in 2014, over one-third (35%) of workers in low-paying jobs were over 40 years in age:

15wage-age

5. Canada’s current minimum wages don’t equal a living wage:

How much money do you need to earn per hour just to make ends meet, anyway?

If you live in Toronto, you’ll need to earn $18.52 per hour to earn enough to live on. Across the country, the living wage varies between $20.68/hr in Vancouver, $18.15/hr in Calgary, $16.46/hr in Regina, $14.07/hr in Winnipeg, $14.15/hr in Windsor, or $20.10/hr in Halifax, to offer a few examples.

Compare that to hourly minimum wages across the country:

provincial-minimumwages

And it’s worth noting – after four decades, the minimum wage in Canada has increased by only one penny after inflation since 1975.

Source: http://www.pressprogress.ca/justin_trudeau_told_a_struggling_worker_he_not_sure_about_raising_the_minimum_wage

Ontario Coalition Against Poverty

The Austerity Agenda in Sheep’s Clothing

As we go into the New Year with Justin Trudeau’s Liberal Government in place, it’s worth noting that the struggle against poverty in Toronto now unfolds with a complete set of federal, provincial and municipal regimes all seeking to position themselves politically as moderate if not progressive. This has particular implications and poses particular challenges in terms of effectively resisting austerity, poverty and social abandonment.

There is, of course, an implication in the last sentence I just used. At none of the levels of government we face can we seriously imagine that we are dealing with anything other than continuation and deepening of the agenda of austerity. That agenda is an escalating, internationally determined fact of political life that we can’t seriously expect Trudeau, Wynne or Tory to break ranks with. Still, the fact that we are not dealing with hard right regimes is of considerable significance. The positive side of dealing with the more moderate austerity forces is that they don’t wish to take things as far and they are more likely to tactically retreat in the face of serious opposition. The other side of the matter, however, is that such regimes are harder to confront. They impose austerity more stealthily and have developed considerable skills when it comes to diverting potential resistance into a process of fruitless dialogue.

Because of the newness of the Trudeau regime and, because it replaces such a hated bastion of reaction as the Harper Tories, it is likely that illusions in its false progressive credentials will linger for a while. However, we begin the New Year with global markets reacting to fears that a world economy that has produced only dubious post 2008 recovery is nearing the next downturn phase. With the collapse in oil prices and an economy being kept precariously afloat by unsustainable household debt, it is likely that Canada will feel the full weight of any such development. In this situation, it’s pretty clear that Trudeau has not been put in Ottawa to broker any major concessions. He presides over a system of federal social provision that has been seriously undermined. The Employment Insurance system has been gutted, healthcare weakened, social housing all but eliminated and transfer payments toward social assistance scaled back. A movement that demanded and fought for the reversal of this enormous damage to the social infrastructure could create a major problem for the Liberals and force more from them than token gestures.

Meanwhile, In Ontario…

For the Ontario Government, while they have hardly faced anything comparable to the Days of Action that were directed against the Harris Tories, the ‘social justice’ mantle they have put on has already lost a great deal of its credibility. The Ontario Coalition Against Poverty (OCAP) has become well used to the Wynne Government’s ongoing game of ‘poverty reduction’ under which a never ending process of consultations is used to deflect political challenge as the Liberals deepen poverty and allow the spending power of social assistance to decline against inflation. The challenges that the Liberals have faced from public sector workers, the campaign for an increased minimum wage and the Raise the Rates campaign that OCAP has been part of demonstrate that the capacity of the Liberals to stave off social resistance to their austerity agenda in sheep’s clothing is not unlimited. Greater levels of mobilization against the Liberals’ poverty measures are perfectly possible and likely.

With the lack of openly declared party politics at the municipal level, the implementation of ‘kinder, gentler’ austerity in Toronto is a little more complex. After Rob Ford’s dysfunctional attempt at right wing populism, a sigh of relief greeted the election of John Tory as Mayor. The conservatives, centrists and soft left members of City Council have all been folded into a regime that likes to give everyone a place at the table and prides itself on an ‘inclusiveness’ that can take various forms, as long as they don’t seriously impede the twin agendas of austerity and upscale urban redevelopment.

Where Rob Ford would have insisted there was plenty of shelter space for the homeless and tried to block any measures to address the crisis on the streets, Tory plays a more skillful game. Under pressure, he opens some warming centres and drop-ins and adopts other minor measures of alleviation. He clearly places a premium on trying to reduce the risk of actual street freezing deaths, which spell political problems for him. Meanwhile, the City policy of keeping shelter occupancy at a maximum of 90 per cent continues to be disregarded and the bureaucracy works to ensure that shelter facilities are moved out from the centre of the city in the interests of redevelopment. The plight of the homeless actually becomes worse but under a regime that has the political intelligence to protect its legitimacy at the cost of some concessions.

Illusory Solutions

The advantages to be gained from the ‘poverty reduction’ circus have not been lost on John Tory and his team. The approach that the Liberals put in place at the Provincial level is now being replicated municipally. The main political capital provided by this approach is that it creates the illusion that the ‘complex problem’ of poverty is being duly considered, solutions sought and the ‘stakeholders’ consulted. Through this procedure, community anger can be safely channeled, expectations put on hold and ‘solutions’ presented that don’t conflict with and even facilitate the prevailing agenda. We will wait in vain for the City to give a lead in challenging precarious work and low wages. The library system in Toronto, has cut its workforce and employs a scandalous number of part time workers. We can be sure that there will be no great desire to ensure that the City run welfare offices adopt a less restrictive approach to the provision of benefits. Any housing initiatives that emerge will be focused on facilitating upscale development, with token ‘affordable housing’ measures included and an emphasis on furthering the privatization of public housing.

At each of the levels of government, then, the above mentioned political contradiction manifests itself. They are all regimes that are relatively less able to withstand serious challenge and social mobilization and this makes it easier to win concessions from them and force them into retreats. However, their very method of operating, based on ‘inclusiveness’ and co-option, makes it all the harder to create the critical mass of resistance that makes such victories possible. In 2016, the possibility opens up that the pace and scale of austerity will make the balancing act that such regimes rely on impossible to sustain. In such a situation, we could break the grip of the fake consensus, increase the scale of the fight against austerity and poverty and win some significant victories.

Source: https://canadiandimension.com/articles/view/the-austerity-agenda-in-sheeps-clothing

Image Source: (Same as above)

Canada loses 19,700 jobs in April, unemployment still at 6.8 per cent

From Canadian Labour Reporter

OTTAWA (Reuters) — Canada’s economy shed 19,700 jobs in April as losses in part-time work offset gains in full-time positions, while the unemployment rate remained at 6.8 per cent, Statistics Canada said on Friday.

Analysts had expected a net job loss of 5,000 positions. The data highlighted that Canada is still struggling to boost employment some six years after the end of the Great Recession.

Part-time employment dropped by 66,500 jobs, the biggest fall since the loss of 77,500 posts in March 2011. Full-time employment rose by 46,900 jobs.

The 12-month gain came to 139,100 jobs, an advance of 0.8 per cent, while the six-month average for employment growth was just 2,600 jobs, down from 16,300 in March.

Bank of Canada Governor Stephen Poloz, who has long expressed concern over the sluggish job market, last week forecast the economy would return to full employment by 2016.

The labour participation rate, which is of particular interest to the central bank, fell to 65.8 per cent from 65.9 per cent in March. In December 2014 and January 2015 it had hit 65.7 per cent, the lowest since the 65.6 per cent recorded in July 2000.

No to the Murderous Migration Policies of the EU

Joint Statement of the Communist Party of Greece, Communist Party of Italy, Communist Party of Malta, Communist Party of the Peoples of Spain

At the initiative of the KKE, the Communist Parties of 4 European countries of the Mediterranean, which are receiving the largest waves of refugees and immigrants, denounce the political line of the EU and point to the causes of the problem, as well as the direction of the communists’ struggle on this issue. The joint statement is as follows:

The KKE, CPI, PC Malta, PCPE wish to stress the following regarding the unspeakable tragedy unfolding in our countries’ seas in relation to the refugees and immigrants:

The ongoing tragedy has a “name”: it is the political line of the EU and other countries, like the USA, that is responsible for the wars in the Eastern Mediterranean, Middle East and North Africa. This tragedy is rooted in the capitalist system itself, on this terrain we have the manifestation of poverty, the class exploitation and oppression of the working class and peoples by reactionary regimes, the sharpening of the imperialist contradictions, which cause the imperialist wars and interventions.

The imperialist interventions and wars developed in Syria, Libya, Iraq, Mali and other countries of the Middle East and Africa have a deep impact in the people of those countries who are forced to risk their lives by displacing themselves to other areas.

The problem of the waves of immigration cannot be solved without dealing with the causes that create them. The “fences”, Frontex, and the other repressive measures merely increase the number of the dead and the slave traders’ prices.

The governments of the so-called European “South”, “right” and “left”, bear enormous responsibilities because they participate in this crime, they participate in the imperialist plans of NATO and the EU.

We are struggling for relief measures, so that the governments immediately ensure humane temporary reception centres for the refugees as well as the provision of travel documents so that these people can reach the countries that are their real destinations. We must defy the Dublin Regulations and the Schengen Treaty.

In addition, we stress that this issue cannot be dealt with in separation from its causes. Our peoples’ struggle against the imperialist interventions of the EU and NATO, against the rotten capitalist system itself must be strengthened

Federal Budget Rewards the Rich but Fails everyday Canadians

From the Canadian Union of Public Employees

The Conservatives’ 2015 federal budget may balance the books, but it is highly unbalanced in its impact on Canadians.  It puts millions of seniors at risk of poverty, abandons families in need of affordable child care and quality public health care, and doesn’t help Canadians workers who need better jobs, says the Canadian Union of Public Employees.

“The Conservatives have chosen irresponsible economic policies that slash revenues to benefit a few corporations and the wealthy,” says Paul Moist, national president of CUPE, Canada’s largest union. “This budget does far more harm than good in addressing the gap between workers and the richest Canadians. With this budget, that gap will only continue to grow.”

Maintaining unreasonably low corporate taxes, income splitting, tax credits for wealthy families like the expanded TFSA’s provide no help for everyday Canadians.  These measures recklessly slash federal revenues that will mean more cuts to public services that Canadians depend on.

“Expanding TFSA does almost nothing to help the over 11 million Canadians without a work place pension. Instead of expanding the Canada Pension Plan – widely seen as the most effective, efficient and affordable way to keep seniors out of poverty – the Conservatives only offer another tax shelter for the rich,” says Moist. “The lost revenues from expanding TFSA’s – at least $1 billion over the next five years – will only mean more pressure on OAS/GIS. This budget is an unqualified failure for the vast majority of Canadian seniors.”

Canadian families struggling to find affordable child care are also left without any help.

“Families are spending more on child care than on housing – up to $2000 a month. This means the tax credit being offered up by Conservatives will barely cover one month. And that will be for only handful of families; most won’t get a dime,” says Moist.

The Conservatives lack of leadership on child care is even more pronounced in health care. Despite long waiting lists, five million Canadians without a family doctor, and skyrocketing prescription drug prices, the 2015 federal budget confirms Conservatives are cutting more than $36 billion from health care.

“We need strong federal leadership to strengthen our public health care system,” says Moist. “Our public health care is coming apart at the seams, and Conservatives simply shrug their shoulders hoping someone else will take care of it.”

CUPE is urging the Official Opposition to move budget amendments that will help create quality jobs, make urgent investments in public health care and child care, expand the CPP, and introduce measures that protect valued public services.

“This budget is clearly taking our country in the wrong direction. It fails workers, families, seniors, students, Indigenous peoples and the environment,” says Moist. “The only bright side is that with our pending federal election, this will be the Conservatives last budget. Next budget, we’ll be able to start repairing the damage done. It’s time for a change.”

CUPE’s complete analysis of the 2015 federal budget will be available on cupe.ca.

Future Shop stores closing, some converting to Best Buys, 1,500 jobs lost

From Canadian Labour Reporter

Future Shop stores across Canada are closing effective immediately, resulting in hundreds of full and part-time jobs being lost.

Best Buy Canada, a subsidiary of Best Buy Co. Inc. that owns and operates both Best Buy and Future Shop stores, said in a statement Saturday that it will be closing 66 Future Shops for good, while 65 others will be converted into Best Buys.

The move will result in the loss of 500 full-time and 1,000 part-times jobs. The affected employees will receive severance, employee assistance and outplacement support, the company said.

Brandon Buchanan, a former Future Shop employee in Toronto who worked in the mobile audio section in 2012, said he was shocked to hear the stores are closing.

“That happened kind of suddenly, because a lot of the people I still know work here apparently, they showed up this morning and it was just locked out,” he said. “I had planned on maybe coming back and checking it out for a job again now that I’m back in the city but I guess that’s not happening.”

Stores in Toronto were locked and covered in paper with signs posted telling customers to shop at nearby Best Buy stores.

(more…)

Gender Wage Gap in Alberta Increasing

From Canadian Labour Reporter 

A new report from the Parkland Institute says the wage gap between men and women in Alberta is heading in the wrong direction.

According to the report from the University of Alberta research group, full-time working women earn about 37 per cent less per year than men.

When comparing the average total income in Alberta, women earn about 42 per cent less per year than men.

In comparison, the gender wage gap for full-time earners sits at about 20 per cent in Saskatchewan, 25 per cent in Quebec and 26 per cent in Ontario.

Ricardo Acuna, the executive director of the Parkland Institute, says the wage gap has been growing since 1993 and he worries the looming provincial budget will only make things worse.

Premier Jim Prentice has promised a tough budget that will reshape the foundations of how the province raises and spends money, a move prompted by the steep slide in the price of oil.

“Right now the premier is talking about changing things around, he’s talking about maybe cutting what we’re spending on the civil service, maybe rolling back civil service salaries,” says Acuna. “These are jobs that are predominantly held by women.”

Canadian Job Quality Sinks to Record Low

From Canadian Labour Reporter 

The quality of jobs in this country is fading fast, according to a new report from CIBC.

Released on March 5, CIBC’s latest employment quality index noted job quality in Canada is now at a record low, showing declines in all measures.

According to CIBC, its report indicates that the drop in job quality is “more structural than cyclical in nature and likely can’t be reversed by monetary policy.”

This mirrors the latest warnings from the Bank of Canada cautioning that the headline unemployment rate is not as rosy as perceived, added Benjamin Tal, deputy chief economist at CIBC and the study’s author.

“In many ways, the (Bank of Canada) has a point. Our measure of employment quality is now at a record low, suggesting that the composition of employment is suboptimal,” Tal said. “But a closer examination of the trajectories of our index’s subcomponents suggests that the bank’s prescribed remedy of low and lower interest rates might not cure what ails the labour market.”

Since the 1980s, the number of part-time jobs has risen much faster than the number of full-time jobs, which Tal explained is often seen as the most important measure of employment quality.

Another contributing factor is that self employment versus paid employment was also skewed. Over the past 25 years, the number of self-employed workers has been on a steep decline, but in the last year grew at a rate of four times faster than the number of paid employees.

“While full-time paid-employment jobs are on average of higher quality than part-time and self-employment jobs, not all full-time paid-employment jobs were created equal,” Tal went on to say. “The number of low-paying full-time jobs has risen faster than the number of mid-paying jobs, which in turn, has risen faster than the number of high-paying jobs.”

CIBC’s report also revealed that job quality has already taken a hit in Alberta, falling three per cent by the end of December 2014. Saskatchewan and Manitoba have seen similar declines, with Ontario falling by four per cent. However, British Columbia, the Atlantic provinces and Quebec have bucked the trend and seen an increase in quality.

There are implications for unions, Tal explained, saying that the fastest growing segment of the labour market is also the one with the weakest bargaining power.

“That works to weaken the link between labour market performance and aggregate wage gains,” he added.