Canada Jobs And Labour: 5 Signs Workers Are In For A Rough 2012

Canada Workers Labour 2012

First Posted: 02/ 9/2012 2:02 pm Updated: 02/ 9/2012 2:02 pm

If there is any doubt that Canadian workers are in for a tough year, consider the cluster of gloomy developments that have taken shape in recent days.

Though Canada’s job market emerged from the recession in a position of relative strength, Statistics Canada reported on Friday that job growth in January left much to be desired, with the economy adding just 2,300 jobs, a far cry from the 24,000 jobs analysts were expecting.

“This is a weak performance over the past six months,” says Benjamin Tal, deputy chief economist at CIBC World Markets, who notes that the rate of job growth hasn’t been this slow outside of a downturn since the 1970s.

Meanwhile, Illinois-based heavy equipment manufacturing giant Caterpillar ended a bitter lockout at its Electro-Motive Diesel plant in London, Ont., with an announcement that it will be shifting operations to its other facilities in North and South America, adding 700 skilled workers and managers to the city’s already lengthy unemployment rolls.

And in Toronto, where Mayor Rob Ford has made it his prerogative to “stop the gravy train” of presumably wasteful public spending, negotiations with the city’s outdoor workers stretched past the deadline set by negotiators. The deal reached well into the eleventh hour is said to have come at the expense of union concessions.

None of which has done much to inspire confidence among workers. Far from isolated incidents, experts say these occurrences reflect deeper labour market trends that are increasingly tipping the balance away from employees, and ratcheting up labour unrest.

“We’re seeing more and more evidence of very aggressive, take it or leave it approaches by employers,” says Charlotte Yates, dean of social sciences at McMaster University. “It’s ironic that we call it labour unrest instead of employer unrest, since the employers are the ones who are really being aggressive.”

Here are five signs that workers are in for a rough ride in 2012.

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  • 5 Signs Canada's Workers Are In For A Rough 2012

    Photo: CP/Andrew Vaughan

  • Good Jobs Few And Far Between

    When it comes to evaluating Canadian job growth, the employment numbers are just part of what worries Benjamin Tal, deputy chief economist at CIBC World Markets. "It's not only the quantity, but also the quality of employment that's falling in Canada," says Tal. "A lot of the jobs that are being created are low-quality, especially part-time jobs and low-paying jobs." Though -- unlike the U.S. -- Canada has regained all the jobs lost in the recession, he says that an absence of good-paying jobs is the "main reason" why wages have stagnated. Adjusted for inflation, personal after-tax income is now rising at the slowest rate since 1995. Meanwhile, the skills mismatch in many jurisdictions has left employers short on skilled labour despite still-high unemployment levels in other regions. "If you lose a job, you don't have the skill set to go an find a job elsewhere that companies want and need," says Tal. (Alamy photo)

  • Globalization

    When Caterpillar decided to stop assembling locomotives in its Electro-Motive facility in London, Ont., it was a poignant reminder of how globalization is giving deep-pocketed, transnational corporations the ultimate trump card in bargaining with workers: a cheaper alternative. According to Mike Moffatt, a labour expert at the University of Western Ontario's Ivey School of Business, because of automation and an increase in imports from lower wage jurisdictions like China and Mexico, Canadian workers are competing for fewer manufacturing jobs. "That's given firms real power to negotiate down wages," says Moffatt, who points to the <a href="http://www.reuters.com/article/2012/02/06/riotintoalcan-alma-idUSL2E8D699U20120206" target="_hplink">Rio Tinto lockout in Quebec</a> as another illustration of the might afforded to companies with global reach. Since locking out workers at its aluminum smelter in Saguenay-Lac-Saint-Jean on December 31, the Anglo-Australian mining giant has used non-union workers to operate the facility at one-third capacity. With no plans to return to the bargaining table, the company recently announced it is restarting two suspended lines, and is expecting to return to full capacity in May. As Tal maintains, "In this environment, the bargaining power of labour is diminishing."

  • Austerity Agenda

    Just as the power has shifted toward private-sector employers, Michael Lynk, a labour law expert at the University of Western Ontario, says there is a sense that governments are becoming emboldened amid the post-recession climate of austerity that has swept from Toronto's City Hall to Parliament Hill. "There's increasingly an attitude of take-it-or-or leave-it by [private sector] employers, but we may begin to see that with public sector bargaining as well, where they basically say, 'You have to meet our bargaining objectives this round, and we're going to be prepared to endure a short or lengthy lockout to prove our point," he says. Though global economic instability recently prompted federal Finance Minister Jim Flaherty to pull back on his earlier commitment to deep cost-cutting in the upcoming budget, government departments are expecting spending to be slashed by between five and 10 per cent, a goal that will be met at least in part at the expense of public service jobs and benefits. The Canadian Centre for Policy Alternatives recently estimated that the <a href="http://www.behindthenumbers.ca/2012/02/02/federal-cuts-could-push-unemployment-to-8/" target="_hplink">federal government's budget cuts could push unemployment up half a percentage point, to 8 per cent</a>. (CP photo)

  • Pension Problems

    From <a href="http://dalgazette.com/featured/faculty-strike-rumours-explained/" target="_hplink">Dalhousie University</a> to <a href="http://www.thestar.com/article/1120516--labour-strife-ahead-in-air-canada-pilot-talks" target="_hplink">Air Canada</a>, employers no longer able -- or willing -- to fund costly pension plans are mounting attempts to roll back retirement benefits, stoking labour unrest and a growing sense of financial insecurity among workers. As Dalhouse University labour economist Lars Osberg explains, the financial crisis took a huge bite out of the value of corporate pension portfolios and the interest rate required to generate the stream of returns to make these programs sustainable. All of which explains why experts anticipate a deepening of the trend away from inflation-protected, gold-plated defined-benefit pension plans, shifting responsibility for retirement savings from employers to workers.

  • Decline Of Unions

    The power in numbers that enabled Big Labour to negotiate better wages and benefits in the aftermath of the Second World War is a distant memory today, as the <a href="http://www.huffingtonpost.ca/2011/12/12/canada-income-inequality-decline-unions-middle-class-jobs_n_1139136.html" target="_hplink">erosion of unions continues to whittle away the strength of collective bargaining</a>. This is particularly true in the private sector, where unionization sits at 16 per cent of employees, less than a quarter of public sector unionization. "I think you will see more disputes with unions having to compromise more than in the past," says Tal. "I really don't see that they have the upper hand at this point." Given the yawning gap between private and public sector unionization, Lynk warns that pressure on public sector unions could mount as it has in the U.S. in recent months. "The argument they've been floating is, 'Why should public sector workers have jobs for life, good pensions, and decent wages? They're eating up your taxes,'" he says. "I wouldn't be surprised if we're not [starting] to see the beginnings of that kind of argument here in Canada."

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chuck nathaniel
Your micro-bio is pending approval
10:55 PM on 02/12/2012
The Myth that Canada is somehow separated from the global financial meltdown is eroding.
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03:56 PM on 02/10/2012
First sign...free trade talks with China.....
02:01 PM on 02/10/2012
if you can't beat 'em join 'em.take part time job $7-8 an hour work till ei,collect then grab welfare.we will bankrupt this govt. and all corps that leave for cheap labour
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Aneesia
01:08 PM on 02/10/2012
A Canadian wrote a book called "Shock Doctrine". It describes accurately what is happening in the US and Canada now. Web site too. Be scared !
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rickthaluddite
What noisy cats are we
11:53 AM on 02/10/2012
I'm working part-time in a restaurant right now for minimum wage ($10.25/hr in Ontario.) It's okay because I also have a full-time income that pays my bills and this is just a bit on the side to save. Contrast that to 1995 when I was working part-time managing a Pizza Pizza franchise on the weekends and making $10.75/hr. I did a good job and my boss paid me well because Friday and Saturday were lucrative and he could spend his weekends making money while he was doing weekend stuff with his family and friends. Things are tough and the woman who owns the restaurant I help out at now is just hanging on like everyone else. I do hate min. wage tho' because it's the boss telling you, "If I could pay you less, I would."
11:53 AM on 02/10/2012
The global economy has created a race to the bottom for wages and benefits.

The world added a billion people in the last 12 years and the population continues to grow. There are over a billion people living on less than $2 a day. There will always be someone willing to work for less to survive.

The world has a food crisis, a water crisis, an oil crisis, a climate change crisis, a financial crisis, a jobs crisis and an overpopulation crisis. There needs to be a balance between jobs, resources and population.
11:12 AM on 02/10/2012
It is the dangerous monetary policy that threatens our entire economy which should worry all workers and lower class segments of society. Instead of clamoring for high wages to match inflation, we should demand SOUND MONEY, resulting in low wages and low prices. The devaluation of the currency represents the true theft of wealth from the lower and middles classes to the elites.
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Aneesia
11:11 AM on 02/10/2012
Looks like Canada is in bed with the Corporations and is selling out the people for cheap labor overseas and the ability to avoid safety and environmental laws....the same as the US has done...which has wreaked havoc on almost everyone but the wealthy and the US Congress($$$).
Why would any nation in their right mind try to emulate a corrupt nation like the USA.
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Blacksheep1
Keeping the Left honest, 7 days a week!
11:26 AM on 02/10/2012
Yes, why try to emulate the most powerful and prosperous nation on Earth?
11:38 AM on 02/10/2012
Your head is in the sand.
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rickthaluddite
What noisy cats are we
11:56 AM on 02/10/2012
You mean the one who doesn't even attempt to pay its bills-- that prosperous nation? You're silly.
02:05 PM on 02/10/2012
right on 'nuff said
Elmwoodmac
No matter where you go, there you are!
11:05 AM on 02/10/2012
FYI, it's already "bumpy" for me and other family members and friends. The economy is worse off than I believe the governement wants to let on.
09:35 AM on 02/10/2012
Sitting in a small town in Mexico getting a wonderful perspective on how life will be in North America in 20 years. The differences are that in Canada we dont grow large amounts of good food cheap, we still have to heat our homes, we have too many rules against the little guy making it and Canadians just aren't as hardy.

The bottom line as to the future is that we have peaked, unless governments develop policies for zero or declining growth we are hooped. The biggest problem we face is nobody wants to tell the truth and nobody wants to hear it, let alone believe it.

I also must add when comparing Canadians to Mexicans we don't know how to have fun or be as happy with so much less, but we better get used to it.
09:55 AM on 02/10/2012
Faved for "unless governments develop policies for zero or declining growth we are hooped."
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Planarama
Common sense will one day prevail.
09:16 AM on 02/10/2012
Why should public sector workers make more than their private sector counter-parts?

Because the government is not in the business of profiting on the backs of their labour. Government is, and should always be, not for profit.
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Jay from Ottawa
sovereignty sale, 1.3T OBO
10:31 AM on 02/10/2012
As should be the essentials of life. Power, water, food, healthcare & education.
11:02 AM on 02/10/2012
How do you pay for that let alone justify using force to take resources from one and give them to another? You do not have a right to other people's labour and wealth. You have a right to your life and your property, that is it. Any other right comes at the expense of someone else's resources. It is this mentality that has the entire Western World in collective debt. We believe we can simply create wealth out of thin air to provide for everyone in our societies. As such, we embark upon the destruction of our currencies in order to provide programs which we cannot afford. The idea that access to resources is a right only works with a large coercive body to maintain the theft of resources from one group to the other.
yer
Stop the Alberta Taliban
07:49 AM on 02/10/2012
How to you avoid the 360,000 Canadians waiting for the Employment Insurance payments in the months not in the days or weeks? Shoddy reporting
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gravescanada
07:28 AM on 02/10/2012
Exactly how much proof do the supporters of the Harper Government need? How far down do we have to go before we realize that Harper's policies, while making some conservatives feel good, are horrible for Canada as a whole? Do we not realize that nothing Harper is doing is going to help Canadians? Its all about enriching Corporations, Multinational Corporations and Big Oil.
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DirkNeptune
I love raspberry pie, damn it.
09:16 AM on 02/10/2012
The 30% in this country who are hard core conservatives are beyond reach. They ignore all facts and data that fly in the face of their ideology.

It's the other 9% that are key.

My guess is many are sick of Harper already with many regretting voting for him last election. They voted him for him because the economy seemed ok or they saw no viable alternative in the other two candidates.

They didn't vote for him to cut their pensions, undermine our health care system and make the rich richer.
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gravescanada
06:53 AM on 02/11/2012
I am a permanent resident, have been for a long time. I am going to renounce my American Citizenship and become a Canadian Citizen thanks to Harper. I am going to be out there to help get him voted out.
09:18 AM on 02/10/2012
wouldnt that help jobs then?
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gravescanada
09:39 AM on 02/10/2012
Just need to look at Electro Motive and Caterpillar to see the results of playing with Multinational Corporations. We gave tax incentives to Electro Motive and then allowed Caterpillar to buy the company with no conditions. Then Caterpillar offers the employees a 50% wage cut, a cut they knew would not be acceptable. After the workers refused the offer, they locked them out and began the process of shutting down the plant and moving everything to Indiana, a right to work state in the USA. Right to work really means an employer can fire you for no reason and you have no recourse. This is the future of Canada employment if we are not careful. We expect our Corporations and Businesses to treat workers fairly, which Caterpillar did not do.
07:23 AM on 02/10/2012
Well as far as the Canaian people are concerned,who really cares !!! Wewread , we cry, we stomp our feet , we hold our brath, but in the end all for haught !! Do we think for one minute the politicans in Ottawa are reading the news/ headlines about our country goinbg into the duper Not as long as their getting their pound of flesh via salaries, pension on the backs of the working poor .
I say we should suck it all up remember we put Harper in poer completely for 4 years and thats whatwe wil get ,four years of nothing but Hraper. Does this man really understand lats say the eastern part of canad or better still does he really care . We all know, well maybe not you westernerns and central Canada that Canada stops at the Queebec / New brunswick border. Wemay look stupid to the rest of Canada but we sure know this, so most of us let it roll off our backs as Canada Parliment is goingto do "Nothing " for Canada as a whole.
I know for one i will go to heaven when this is over as the line up for Hell is going to be so long I'll never get through.BTW will see a lot of famousd or not so famous people on the way. Joe.Dee
07:10 AM on 02/10/2012
I'll add another reason. When someone who is unemployed and ends up with a $4,000.00 tax bill, there is something twisted and wrong with the Canadian tax system.

Stop taxing the unemployed.
11:13 AM on 02/10/2012
One step further, get rid of the immoral income tax to keep more money in the pockets of the poor!
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chuck nathaniel
Your micro-bio is pending approval
10:59 PM on 02/12/2012
IF you are unemployed and owe 4,000 in taxes, you are leaving something big out of the picture.
09:07 AM on 02/13/2012
Indeed I am. Doesn't change the facts though.

And, by the way, the facts don't include failure to pay or tax evasion. I don't owe any taxes. I pay them promptly.

Taxation is a vile practice keeping thousands of non-productive bureaucrats in jobs and disproportionately high pensions, paid for by people struggling every day to survive. That, by any measure, is wrong.

It is long past time for governments to survive as private industry does. When the money runs out, that's the end. No going back to the people or adding on a fee here and there to make up for the shortfall.

Government is overflowing with departments that need to be dramatically reduced or done away with altogether.

I advocate a flat-rate tax system with no loopholes, no incentives, no breaks (except for government pensions (those who have worked for a threshold number of years in the country) with no tax. The rich would still pay much, much more, as they do now; the system would be more fair; overnight one huge government bureaucracy would be cut down by as much as ninety-percent; overpriced lawyers and tax accountants would be scrambling.