Could it be that the middle class was a late 20th-century fluke of history? For a few fleeting decades, almost anyone with an average IQ and education could reasonably expect to count on a decent job and pension. In the past few years, that assumption has gone out the window.
The new reality is the growing polarization in the labour market between insecure, lower-wage jobs and secure, upper-income ones. The proportion of workers in “precarious” employment is ballooning everywhere. Even before the crisis, companies in Europe had essentially stopped offering full-time jobs with benefits. Temporary contracts are now the norm.
Increasingly, this is true in Canada, too. Companies and governments alike refuse to take on permanent employees eligible for full benefits. They are resorting to temps or contracting out services. This flexibility suits employers. But it is not usually a great deal for the workers.
University of London professor Guy Standing has popularized a term for this burgeoning new class of insecure workers. Borrowing from the French, he calls them the “precariat.” And he warns they are a growing political problem, owing to their “anger, anomie, anxiety and alienation.”
“This makes [for] a very dangerous situation,” Prof. Standing warns. He advocates more “redistribution to address this grotesque inequality.”
The authors of a new study on the proliferation of precarious employment in the Greater Toronto Area and Hamilton come to largely the same conclusion about what needs to be done for the nearly 40 per cent of workers in the region who, according to the study’s generous estimate, now find themselves in insecure jobs.
The study – prepared by McMaster University professor Wayne Lewchuk and funded by the United Way Toronto and a federal granting agency – makes several reasonable suggestions, such as improving access to child care and training programs and boosting income support for low-wage workers. Overall, however, the report reads like a policy paper from the Canadian Labour Congress.
“Providing more opportunities to join unions and form other types of collective representation may lead to more secure employment relationships,” says the report, which also suggests giving workers the ability to negotiate collective agreements at “the sectoral or occupational level” rather than only at the firm level.
If anything, however, expanding union power in its current form would lead to even more precarious jobs and unemployment. Ask the hordes of recent teaching graduates who can’t get work because existing union contracts are driving provincial governments deep into the hole. Or ask aspiring auto workers who watch jobs go south as the union here digs in its heels.
Oddly, the McMaster study ignores young people – it focuses only on insecure workers between 25 and 64 – even though youth unemployment and underemployment are arguably much bigger problems. In January, fully 13.5 per cent of young workers were unemployed here, compared to about 6 per cent of workers 25 and over. The Organization for Economic Co-operation and Development warned Canada last year about “the possible under-use of skills that are costly to produce” as new postsecondary grads see their career prospects stymied.
Faced with iron-clad collective agreements, firms and governments string young workers along on temporary contracts. Yet, the Canadian union movement still blames greedy multinational corporations for the rise in insecure jobs, absolving itself of responsibility while erecting a firewall around its shrinking membership.
To be sure, there has been movement. Ontario teachers will get conditional, rather than automatic, inflation protection on their pensions. The Canadian Auto Workers has agreed to lower wages for new hires, although the pay will rise to the full union rate after 10 years.
Even so, such “concessions” are minor relative to the scope of the problem.
The CAW’s refusal to agree to a permanent two-tier wage structure is one reason Canada’s share of North American auto production and employment is expected to shrink over the next five years – in spite of a costly taxpayer bailout in 2009. In the U.S., where the United Auto Workers has signed off on permanently lower wages for new hires, jobs are booming and workers at the Big Three are pocketing $780-million (U.S.) in profit-sharing cheques for 2012.
Canadian unions deserve a lot of credit for creating the middle class. But if they were truly committed to preserving what’s left of it and shrinking the precariat, they would reconsider their ostrich-like refusal to abandon a 1970s-style bargaining strategy. They just might become relevant again.