rabble blogs are the personal pages of some of Canada's most insightful progressive activists and commentators. All opinions belong to the writer; however, writers are expected to adhere to our guidelines. We welcome new bloggers -- contact us for details.

Crisis comes at worst time for struggling Canadian workers and families

Please chip in to support more articles like this. Support rabble.ca today for as little as $1 per month!

Image: anonphotography.com​/Flickr

If you were walking around the streets of most Canadian cities over the last few days, you could not escape the sound of silence -- little traffic, shuttered stores and empty office buildings. That silence was, however, punctured by the ongoing sound of construction workers continuing to do their jobs at work sites across the country.

As Canadians get used to the new normal caused by the COVID-19 crisis, many of us are being urged to work from home, in the hope that we can flatten the curve and avoid a public health disaster. But for the many Canadians who shower after work rather than before, working from home is not an option. Most Canadian workers have to show up for their jobs at retail stores, hotels, warehouses, construction sites, auto plants or steel mills, or they don't get paid.

Governments, economists and business are already projecting that this crisis will lead to catastrophic job losses. Incredibly, last week alone, the federal government received nearly one million applications for employment insurance, an incredible and unprecedented number. 

It is clear that initially the service sector will be hardest-hit -- retail trade, recreational and travel services, accommodation and food services. This sector is characterized by a prevalence of low-wage jobs and self-employed workers who have no cushion for economic hardship. 

Soon enough, however, all sectors of the economy will be profoundly affected. As demand dries up and supply chains are broken, our goods-producing sectors will also see massive layoffs.

This crisis could not come at a worse time for Canadian workers, and so far, the government's response has been woefully inadequate. Unfortunately, the reality for most Canadian workers is that their wages have been stagnant for decades, while corporations have seen robust profits. As a result, Canadian household debt, at about 100 per cent of GDP, is among the highest in the developed world. This means that massive numbers of Canadian families have no savings to survive the gathering economic storm that is about to strike.

Moreover, for decades now, successive Canadian federal governments have allowed our social programs to atrophy. In 2018, barely one-third of low-waged unemployed workers even received EI benefits -- a number that has been steadily declining over the last 25 years. Therefore, while it is a good thing that the government package announced last week will provide emergency EI benefits to many workers who would not have been previously eligible, it is not nearly enough to support workers through this crisis.

The federal government must do more to help workers who are facing unemployment. To start, we should increase EI benefits for all Canadians to a replacement rate of at least 60 per cent of wages (up to maximum of $625 a week) while lowering the eligibility threshold to 325 hours and increasing the benefit floor to $300 a week.

More importantly, the government must provide much stronger economic incentives for employers to keep workers on the payroll. The initial plan for a 10 per cent wage subsidy for small businesses was grossly inadequate, as it would not have kept businesses afloat. 

The USW and others argued the federal government should look to the examples of European nations, such as the U.K., where the government will pay grants covering up to 80 per cent of workers' salaries if companies keep them on their payroll, rather than lay them off as the economy crashes. These extraordinary payments will be worth up to $4,200 per month, just above the median income in the U.K.

The Canadian government has since heeded our call and announced an increased wage subsidy of 75 per cent of workers' wages. However, serious concerns remain regarding eligibility for the increased subsidy, with indications that not all businesses will qualify.

It is imperative that Canada follow the lead of European countries that are making their wage subsidies available to as many companies as need the help. 

The subsidy must be broadly applied in Canada as well, in order to provide desperately needed support to hundreds of thousands of companies and help protect the jobs of millions of Canadians. Restricting the subsidy will result in massive job losses across the country and will exacerbate this crisis.

In order to keep our economy from total collapse, governments must focus on two priorities: keeping workers employed and supporting those who are laid off or unable to work because they are sick or caretaking. This means that in the short term we need to get as much government support into the hands of as many affected workers as possible. In the longer term, this crisis, like the 2008 financial crash, will affect our economy for years to come. We have to be concerned that many businesses that are forced to close in the next six months will never re-open. 

Governments must do more to keep workers employed and they need to be thinking about how we build an economy where workers are not so vulnerable when the next economic crisis hits our country.

Ken Neumann is the Canadian director of the United Steelworkers.

Image: anonphotography.com​/Flickr

Thank you for reading this story…

More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.

rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.

Comments

We welcome your comments! rabble.ca embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on rabble.ca and your privacy here. Please keep in mind:

Do

  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.

Don't

  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.