Apr 182013
Print Friendly

Royal Bank's blunder highlights Canadians' loyalty to income equality.

by Marc Zwelling

Why did the Royal Bank of Canada apologize for letting a contractor hire offshore workers while the bank was downsizing its Canadian payroll?  Public opinion is why.

The bank went into damage control earlier this month when some of the 45 employees being sacked in the RBC’s information technology operations in Toronto told their story to the CBC. An RBC contractor was importing workers to take over the Toronto IT jobs before handing off the work to another contractor in India.

So long as the public thought of Temporary Foreign Workers as nannies, fast-food employees, hotel cleaners and farm workers, the public accepted the FTW program growth from 250,000 in 2006 to more than 400,000 in 2010. But the RBC story involves white collar jobs.

RBC president and CEO Gord Nixon sounded humiliated in his “open letter to Canadians.” The bank published the letter in a full-page ad in daily newspapers and posted it on the bank website.

“First, I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them,” said the chief of the country’s largest bank in assets and employees. “All will be offered comparable job opportunities within the bank.”

The CBC also disclosed that California-based iGate had obtained a permit to let the replacement workers into Canada under the federal government’s temporary foreign worker program, which green lights permits for employers who can show they are unable to find qualified Canadian workers.

RBC’s turn in the media glare followed the uproar last year involving a firm controlled by investors in China that imported 201 workers from China for a coal mine it’s developing in British Columbia.

On the top floor of a downtown office tower, bank leaders can get isolated from public opinion. The Canadian Bankers’ Association thumped its chest last year when its annual poll showed “86 percent of Canadians have a favourable impression of banks in Canada, up from only 59 percent in 2001.”

But while Canadians like their banks, they don’t like bankers, who are among the least respected professionals around. According to a 2012 Angus Reid Public Opinion study, 55 percent of us have a “great deal” or “fair amount” of respect for bankers, putting them 22nd in a list of 25. At the top, nurses and doctors (96 percent respect them); at the bottom, politicians (27 percent) and car salesmen (26 percent).

Those bank fees and towering salaries don’t help the bankers when they step into public relations quicksand. RBC's Gord Nixon got $12.6 million last year, a 25 percent increase over the previous year.  Probably Nixon was caught off-guard by public outrage because downsizing, offshoring and outsourcing are everyday corporate behaviours.

As the Dow Jones business news service reported, “RBC is the latest bank in Canada to downsize as it attempts to reduce costs in the face of a sluggish economy and slowing residential-mortgage and consumer lending.”  The revelation that the RBC employees facing layoffs had been training their own replacements just added fuel to the media fire.

The Conservatives see the economy as an engine that needs flushing to expel the gunk and sludge. It’s too easy for redundant employees to collect unemployment benefits instead of packing up to move to new jobs.

So long as nannies, fast-food employees, hotel cleaners and farm workers were the public’s idea of temporary foreign workers, there was no public outrage as the foreign worker program expanded from a quarter of a million imported employees in 2006 to more than 400,000 in 2010.

What made the Royal Bank situation newsworthy was that it involved white-collar, well-educated people. Young Canadians take out student loans to afford college and university, and their parents save for their kids’ education, expecting that when they graduate kids will get – jobs at the RBC.

While not in the category of BP’s Gulf of Mexico oil spill in 2010, the temporary foreign worker fiasco shook the RBC. As Nixon confessed in his open letter, “RBC has been in the news this week in a way no company ever wants to be.”

After helping the bank downsize, the government abandoned RBC. Prime Minister Stephen Harper claimed, “We have been concerned by the growth of the program.” He promised that “in very short order” the government would have “a series of reforms … to make sure this program is serving its purpose.”

Actually it has served its purpose. The Harper Conservatives expanded the program because it fits their definition of the country’s labour market problems. The Conservatives see the economy as an engine that needs flushing to expel the gunk and sludge. It’s too easy for redundant employees to collect unemployment benefits instead of packing up to move to new jobs. By raising wages, unions also impede the smooth running of the labour market engine. The Conservative narrative says reduce labour costs, and employers will hire more.

The foreign worker program has never been popular.

  • In a 2007 Vector Poll™ 80 percent agreed that instead of bringing in more temps, “the more effective way to combat a labour shortage is for employers to improve wages and benefits for all workers”  (45 percent agreed “strongly”).
  • 62 percent agreed strongly that instead of allowing in more temporary foreign workers, “the government should put more money and effort into solving labour shortages through better education and job training.
  • In 2008, a 44 percent plurality opposed “making it easier for employers to bring in temporary workers from abroad … when employers claim there is a labour shortage in Canada.” Just counting those expressing a view, the public opposed the foreign worker program by 58 percent to 42 percent.

Soon after the Conservatives were elected in 2006, employers lobbied them to lower the gates to offshore workers. The same year, immigration minister Monte Solberg said, “Not a day has gone by since I was appointed minister that I have not heard about labour market shortages threatening to hold up Canada’s economic growth.”

The Conservatives’ spin, in Solberg’s words, was “temporary foreign workers help support economic growth and prosperity.…”

As he cut ribbons at new offices to expedite foreign worker permits, Solberg was conceding that management comes first in the government’s heart. Labour shortages are a problem for employers but a solution for workers and unions, who can negotiate higher pay in tight labour markets.

As he cut ribbons at new offices to expedite foreign worker permits, Solberg was conceding that management comes first in the government’s heart. After all, labour shortages are an employer problem but a worker solution. It’s easier for workers and unions to negotiate higher pay in tight labour markets.

Nonetheless, in those days most Canadians didn’t see temporary foreign workers as a threat to their jobs or living standards.

In 2008, 43 percent of the public said foreign temps “mostly take low-paying jobs Canadian workers don't want” while only 9 percent felt they take jobs Canadians would do. The rest – 39 percent – said temping foreigners do both. Just 17 percent felt foreign temps “mostly hurt the economy by driving wages down for many Canadians.”

The deep recession beginning in 2008 increased everybody’s anxiety.  In an August 2012 Vector Poll™ 43 percent disagreed that “temporary foreign workers are an economic benefit to the country because they fill jobs that Canadians do not want or cannot do,” a 34-point increase in four years.

Framing the issue as offshore temps vs Canadian workers tips public opinion overwhelmingly against the foreign worker program. In a December 2012 Nanos Research poll, 47 percent “opposed” and another 22 percent “somewhat opposed” bringing “temporary foreign workers into Canada while Canadians qualified for those same jobs are looking for work.” Only 25 percent supported the program (6 percent had no opinion).

With a nod to public opinion, that’s why the RBC’s sorry.

About Marc Zwelling

Marc Zwelling is President of Vector Poll™, which provides phone, mail and on-line polls and focus groups. He is also the author of Public Opinion and Polling For Dummies .

Marc can be reached at the email address below.

eMail: polls@vectorresearch.com

Website: http://www.vectorresearch.com

© Copyright 2013 Marc Zwelling, All rights Reserved. Written For: StraightGoods.ca

  3 Responses to “Temporary foreign workers = permanent public opinion problem”

  1. I've always hated those 'in your face' banks ads asking you to tell them what a great job they're doing. There's nothing subtle about them either and thinking people know exactly what's up. They, the banks' top officials, just want to put the public in it's place. They want to be able to tell the public – while their political allies protect them and ignore their transgressions – that they are doing a great job because "There's the public telling us we're doing a great job." Try getting a bank, or any special capitalist interest, to play nice when it can just tell brush you off with "What do you mean? Look at that statstic."
    I'm still amazed though. Darkness is it's own reward. When powerful, rich people are reduced to playing such a game, What does it say about their quality? I mean, 'That' is what they do with their incredible power and freedom? They think up scammy little scams like ads and polls that they can then turn around and shove in our faces so that they can more easily – How easy do you need it to be? – do what they're politicl allies allow and encourage them to do? Those are wasted minds. And 'wasted' perfectly describes how they are working when they dream up this crap.
    Solutions flow from caring. Problems flow from not caring. Too many people are not caring about how they survive. Too many people, including victims of corporatocracy, are playing the losing game of 'riches for the strongest'. A game of life that ensures that there will be losers isn't wise. It's a product of darkness.
    If the people are stung enough by this lack of care by the corporatotocracy to do something about it (What exactly?), Does that mean that the people being stung now care? Because good solutions won't come from people squawking solely because they've been personally affected by the bad behavior of others who don't care. That's not caring. That's just being wounded, even if it causes a single problem to get some attention and can lead to it getting fixed. So far, We've had 'proper' verbal responses from RBC and Stephen 'I'm having too much fun' Harper. Those aren't even a solution to the foreign worker program program. Actually, Given the way these politicians deal with problems (for Canadians), We may REALLY dislike what they finally do to fix them. Which is why none of this hand-wringing over a scammy, tax evading bank is terribly useful.
    We need to completely destroy corporoatocracy. It's not going to destroy itself. 'We' need to. 'One' can.
    *What a crap website! Come on guys. Besides being butt ugly (Don't do an RBC "But our readers like it" on me either.), I can't even copy the text I enter into this field. Sometimes I want to blog about something and will copy my post. Sometimes my post is 'disappeared' and that makes me angry. If I'm passionate enough about the subject and if I've spent some time composing my comment and it disappears (sometimes in forums attached to 'progressive' orgs), I will do up my blog post and include my disappeared post because I think it's illuminating. 'Have a look at what they didn't like me writing' is my thrust. I expanded this field/box in order to screen capture the region with my comment and the corner disappeared under your side bar on the right!!! I can't afford to donate to SG or any org. But I'm sure others can and do. Is this what you give them for their trouble? Is this necessary? Who has the time for this?!

  2. […] Temporary foreign workers = permanent public opinion problem » StraightGoods.ca. […]

  3. What I find corrupt is that RBC hires corporate executives at preposterous compensation to lay of Canadian workers. There is no CEO in Canada worth $12 MILLION per year, PLUS BONUSES!
    But even more rediculous is this overpaid exec and his crony crooks hire each other to sit on their boards of directors, and pay them additional millions. So mr Nixon will be hired by other corporations to sit on their board of directors to add to his income. AND THERE IS NO LIMIT TO THIS RIP OFF. No one seems to ask: How can he be worth millions to RBC while spending quality time on several other corporate boards? Is he just seat warming?
    About the "unqualified" Canadians – why isn't the government insisting that corporations that want to make their profits in Canada, hire Canadians, and either pay higher taxes, or TRAIN CANADIANS TO QUALIFY FOR THOSE JOBS? 

Sorry, the comment form is closed at this time.