Depressed wages: a drag on Canada’s economy

Sid Ryan, Opinion, The Toronto Star:

Just in time to celebrate Labour Day, the American retail giant Target rolled into Canada, swallowed up 150 Zellers stores from the Hudson’s Bay Company, and promptly fired all 15,000 employees.
If that isn’t the very definition of precarious, I don’t know what is.

Unfortunately, it is also a sign of the times. Roughly 1.7 million workers in Ontario find themselves in precarious jobs characterized by low wages, few benefits and no job stability. They pour our coffee, serve us in stores, clean our hotel rooms, maintain our offices, run our factories and their very existence challenges the notion that employment is an antidote to poverty. After all, if four out of five jobs added to Canada’s labour market since the 2008 recession are temporary or contractual then it is no wonder that 22 per cent of the working population in Ontario can’t call themselves “gainfully employed.”

What does it feel like to be working on the margins? I suggest you ask a former Zellers employee. Before being summarily dismissed by Target, barely any of them were making more than three dollars an hour above minimum wage — even if they had given the company more than 15 years of loyal service. If any manage to get hired back to work at one of Target’s discount fashion stores opening next year, they will likely return to earning minimum wage, with minimal benefits and without full-time hours.

This is the fate that awaits service workers in Canada when foreign companies gobble up our retail industry. It is part of a growing downward pressure on wages that is stranding an emergent class of vulnerable workers who are often living close to the poverty line – a group predominantly comprised of women, people of colour and new or established immigrants. 

The competition created when workers are shuffled from one precarious job to another is at the root of Ontario’s race to the bottom. Add to that a new federal policy that allows Canadian companies to fast-track temporary foreign workers and pay them 15 per cent below the going rate and that descent speeds up.

Over the past two hundred years, unionized wages in Ontario’s industrial, manufacturing and public sectors have raised the bar for every worker, as employers in non-union shops competed to keep a skilled workforce. Their collective wage gains helped create Canada’s middle class and many of their benefits became the law of the land — including the eight-hour work day, sick leave, maternity leave, pensions and injury compensation. 

But workers in Ontario’s expanding retail and service sector are forming a new underclass of vulnerable workers. spending less in neighbourhood shops and businesses.

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