Sunday, April 3, 2016

UPDATED: Pondering The Precariat

California, as you have likely heard, is raising its minimum wage to $15 by 2022. Although the efficacy of the increase is being hotly contested, with some claiming it will lead to substantial job loss and others citing studies that show just the opposite, the fact is that it will raise the incomes of 30 to 40% of workers in that state. And that statistic alone underscores the plight of the working poor and the precariously employed, not just in the U.S., but also in Canada. In the Greater Toronto and Hamilton area, for example, those employed in part-time, contract and temporary work is an astonishing 52%.

Those are statistics we can no longer ignore.

In a good and prescriptive editorial, The Toronto Star makes some solid arguments for both governments and unions to be much more involved in ameliorating this abysmal situation. It suggests that the federal government needs to do the following:
- Enhance the Canada Pension Plan. Precarious workers at the bottom of the rung have little opportunity to save for retirement.

- Make Employment Insurance benefits easier to get. Precarious workers may not work long enough in temporary jobs to receive them, or the benefits may run out long before they have found a new job.

- Create a national pharmacare program. Canada is the only country with a universal health-care system that fails to cover the cost of prescription medicine. Right now 85 per cent of those earning less than $10,000 and 70 per cent of those earning between $10,000 and $20,000 — in other words, precarious workers on the bottom employment rung — don’t have an employer-provided health plan.

- Create a national, affordable child care system that will enable parents to take on new jobs when they’re offered.
There is a role for provincial governments as well. Ontario, where one in eight workers makes the minimum wage, can do the following:
- Raise the minimum wage to at least $12 an hour, and aim for $15. As one economist put it, the current minimum wage of $11.25 “falls far short of any suggested benchmark: productivity gains, the average industrial wage, the living wage, or the poverty line.”

- Beef up the Employment Standards Act to require employers to give paid sick days, ensure temporary workers are paid the same rate as fulltime workers doing the same job, and follow the example of Australia, where casual employees must be paid 15 to 25 per cent above minimum wage to compensate for having fewer benefits.

- Enforce the Employment Standards Act with more inspections and follow-up fines and charges. Companies in violation of the act should be ineligible for government contracts.
Unions can help as well, by reaching
out to precarious workers in temporary and part time positions and represent them on issues from wages and scheduling to minimum hours per week.
There are all kinds of arguments brought forth on a regular basis to oppose many progressive measures such as minimum wage increases, ranging from job loss to having to pay more for goods and services. The issue of job loss has been studied, with some finding it decreases employment and others finding no such effect.

However, it seems to me that there is only real question to be asked, and Canadians are in a unique position to answer:

Are all of us are willing to pay a little more, be it through taxes or the cost of goods and services, to ensure that all of our fellow citizens' lives are defined by much more than quiet but deep desperation?

UPDATE: Although not discussed in this post, another redistributive policy approach gaining a fair amount of traction is the guaranteed annual income, about which I have written many times on this blog. Canadian Dimension has a very interesting piece on the concept and its possible negative consequences if not implemented correctly. Click here to read it.


  1. The magical fifteen dollar per hour quest, conceived initially as a somewhat round-figured symbolic goal of some sort by progressives, has now been seized upon by those who wield economic power as a means of limiting and possibly cutting short the discussion. The fifteen dollar amount is perceived by the public in the context of conditions in 2016 (maybe even 2015) and common understanding of its economic relevance can hardly be applied to 2022.

    In order to avoid distorting perceptions any further, I'd prefer that we take it one or two dollars, or even eighty-five cents, at a time and forget about symbolic figures like fifteen. Just ask any union negotiator or contract employee how he feels about six year contracts.

    1. Your point is well-taken, John but unlike you, to me the true value, if any, to be taken from this is that the $15 goal, however long it takes to be realized, is at least indicative of an upward movement toward recognizing the working poor among us. I realize you see it as a means to wield economic power to continue the oppression, but I like to think, especially with the controversy it has generated, it is meaningful.