Importing cheaper workers

Changes to immigration policy could transform society.

by Armine Yalnizyan

Have you noticed how common it has become to talk about replacing workers with even cheaper workers? If you're looking over your shoulder, you're not paranoid; you're paying attention. There's probably a cheaper you out there. And in Canada, the feds are helping your boss find them.

This week, the International Labour Organization noted there are 50 million fewer jobs in the global economy than before the financial crisis began in 2008. Some 200 million people are now looking for work.

People around the world are on the move, leaving their homes in search of opportunity. Many of them have landed here.

Canada has welcomed newcomers in record numbers throughout the recession, even as unemployment rates spiked. But our policies are shifting, and with it the type of labour market and society we are creating. Today, the preferential nod is being given to a soaring number of temporary foreign workers, or "guest" workers. These are people who are brought here at the pleasure of employers, and stay at the pleasure of employers.

In 2011, 156,000 economic immigrants entered Canada as permanent residents, while 191,000 people entered with a temporary work permit, granted to employers by the federal government. Many of these permits extend beyond a year, so as of December 1, 2011 there were 300,111 temporary foreign workers in Canada, the highest number on record. The number of temporary foreign workers has more than doubled since 2006.

The federal government is promoting the temporary foreign worker program as a solution to skills shortages now faced by employers, particularly in the West. Yet 35 percent of the nation's temporary foreign workers are in Ontario, and almost one in five (18 percent) is in Toronto, which has an unemployment rate of 8.6 percent. Labour shortage? I don't think so.

Those numbers will soon rise. Last week, the federal government announced that employers could usher in highly skilled temporary workers such as engineers and electricians in 10 days instead of the current 12- to 14-week approval process, noting red tape will likely be reduced in processing other categories of temporary foreign workers as well.

Of note, the fastest growing category of temporary foreign workers is low-skilled workers, whose numbers have grown ten-fold in just five years. These are not the seasonal fruit-and-vegetable pickers on which our nation also relies. These folks toil year-round at Tim Hortons, Canadian Tire, in our abattoirs, nursing homes, and hotels — workplaces where employers say they can't find Canadian workers willing to work at the offered wages.

Disturbingly, the federal announcement also set out new wage rules that permit employers to pay temporary foreign workers up to 15 per cent below the average paid for that type of work locally, sanctioning the creation of a two-tiered "us and them" labour market.

Even if such a rule were rigorously applied and monitored — and budget cuts may eliminate the staff to do this job — it guarantees a downward trend in wages for everyone. Fifteen per cent below the average is a recipe for continuous decline when labour shortages are filled, as a matter of policy, by those who get paid less and are not allowed to stay long enough to ask for more.

Ottawa's recently announced reforms did not include a change in the four-year cap on residency for temporary foreign workers, brought into play in 2011. That rule guarantees two things: One, employers can minimize the costs of churn; and two, a permanently temporary class of workers is created, keeping wages and expectations low.

The salute to increased use of temporary foreign workers was also not accompanied by increases in the quotas the federal government sets for the number of people provinces can nominate for fast-track citizenship. In Alberta, by the end of 2011, more than 58,000 people were working under temporary foreign work permits, up from about 37,000 at the end of 2007. The province can only nominate up to 5,000 of these workers to become Canadians. The vast majority of low-skilled temporary foreign workers have no avenue for permanent residency.

Even the Chinese railway workers of the 1800s came with "landed immigrant" status. Emphasizing the benefits of a disposable class of workers is a very recent, and unsavoury, development in our history.

This nation was built by immigrants who had a stake in its future. Together we created an economy which today is the tenth largest in the world. While the economy will continue to grow, the distribution of the gains from that growth threatens to become rapidly even more lopsided.

As an economist, I understand cheaper labour will benefit some employers in the short term, though the longer-term results will slow purchasing power and growth.

As a Canadian, I am appalled that public policy can be boiled down to this. We are all cheapened as a result.

Armine Yalnizyan (MIR 1985) is an economist who has focused on serving the community since her graduation from the Centre in 1985. After 10 years as program director with the Social Planning Council of Metropolitan Toronto, in 1998 she authored a ground-breaking report, The Growing Gap, about income inequality in Canada. Through this, and her many other publications (reports, articles and chapters in books) she has contributed to Canada's public discussion of social and economic equality. In 2002, Armine became the first recipient of the Atkinson Foundation Award for Economic Justice. She is a founding member of the Progressive Economics Forum; and a board member of the Public Interest Advocacy Centre.

Website: http://www.cirhr.utoronto.ca/aboutcir/morleygundersonawardwinners/yalnizyan2003.html

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© Copyright 2012 Armine Yalnizyan, All rights Reserved. Written For: StraightGoods.ca