On July 16, Toronto City Council will vote on a proposal to amend the city’s Fair Wage Policy. The policy, which was established in 1893, requires contractors and suppliers for the city to pay their workers the prevailing market wages and benefits in their field of employment or, for unionized fields, union rates. The basic idea behind the policy is to protect workers from unscrupulous contractors trying to underbid their competitors by paying their workers less than the prevailing wage rates. A second goal of the policy is to enhance the city’s reputation for engaging in ethical and fair business dealings.
The city’s Fair Wage Policy currently covers workers in six sectors, including construction workers, cleaners and security guards. Fair wage rates are determined by local market conditions and vary significantly across sectors. For example, the fair wage rate for carpenters employed by city contractors in Toronto is nearly three times higher than that of light duty cleaners.
In principle, the Fair Wage Policy is a progressive measure (unsurprisingly, this made it a target of Rob Ford who in 2010 promised to abolish the policy if elected). Not only does it set a floor beneath wages, it also prohibits city contractors from engaging in exploitative practices such as misclassifying workers as independent contractors so as to avoid obligations under employment law.
In reality, however, the Fair Wage Policy is only as effective as the people who formulate and implement it. A stunning example of how the policy has not been working at City Hall can be seen in the current wage rates. Although city staff in the Fair Wage Office are required to update the wage rates every three years, the last time this was done was 2003.
The tragic but predicable outcome is that in many cases the “fair wage” established by the city is less than the minimum wage. If cleaning companies working for the city paid their employees the fair wage currently on the books — $9.78 per hour — they would be in violation of the Ontario Minimum Wage Law which prohibits employers from paying their workers less than $10.25 an hour. The city’s failure to update the wage rates has in effect rendered the policy meaningless.
City Council must vote on Tuesday to amend the wage rates. Doing so would represent an important first step in ensuring that the policy actually protects workers. It would also allow the city to claim the moral high ground as a fair and ethical employer.
Yet while the wage rates currently being considered constitute an improvement over the outdated rates, they are still far too low. The fair wage rate being recommended for city cleaners — $12.43 an hour — falls far short of what the Canadian Centre for Policy Alternatives estimates to be a living wage in Toronto — $17.76 an hour. A cleaner making $12.43 an hour would earn around $23,000 a year, an income that is just slightly above the Canada Low Income Cut-Off (LICO) for a single person. If that cleaner is supporting a family, their income would fall far below the LICO level. What the city should be considering, then, is a living wage rather than a fair wage.
A living wage covers the costs of basic necessities such as shelter, food, clothing and transportation, and reflects the actual cost of living in a particular geographic region, for example, the GTA. Living wages allow workers not just to survive, but to also support their families and invest in the local economy without having to rely on expensive income supports.
Living wage policies have already been adopted by cities in the U.S. and the U.K, including London, New York and Chicago, not only because this is the ethical way for governments to do business, but because these cities understand that raising workers out of poverty is essential to maintaining a strong local economy and local tax base. In the United States, half of all urban workers live in cities where politicians have legislated municipal living wages. As Toronto takes its place among the great global cities of the 21st century, we must assume the responsibilities that come with that position. It is time for City Council to replace the well-intentioned but insufficient fair wage rates with a living wage.
Contracting out cleaning services
Alongside the proposal to update the fair wage rates, on Tuesday City Council will consider a proposal to give city staff the power to approve the use of subcontracting in custodial services. This proposal represents a step backward, one that would hasten Deputy Mayor and Etobicoke-Lakeshore PC candidate Doug Holyday’s campaign to contract out everything that is not nailed down.
In April 2012, City Council voted 29-12 to prevent city managers from contracting out cleaning services without Council approval. The vote slowed the momentum to privatize city cleaning jobs by forcing staff to get Council approval before contracting out jobs (only a few months before the vote, city staff contracted out around 40 cleaning jobs in 25 police stations). The April vote represented a small but important victory for democratic and transparent decision-making and for quality jobs.
The recommendation to re-delegate contracting-out powers to city staff represents an attempt to subvert the will of Council, and by extension, the wishes of Torontonians who rallied to the support of the city cleaners. Any measure that makes it easier to contract out jobs is a loss for workers, but this is especially true for cleaners who work in one of the most exploitative sectors, organized around a bidding structure that exerts a powerful downward pressure on wages.
Many cleaners in the private sector earn poverty-level wages with no benefits and are forced to work multiple jobs to make ends meet. Safety and training provisions are often lacking. In contrast, cleaners in the public sector earn living wages, enjoy benefits and regular hours of employment, and are given adequate training to ensure worker safety. These are the kinds of jobs we need to protect if we want to tackle the alarming growth of income inequality in Toronto.
The contracting out that has already taken place at City Hall gives us little reason to think that the substandard practices in the cleaning sector won’t be imported to the city — they already have. In February 2012, the city awarded a $1.7-million contract to Impact Cleaning, a company notorious for violating the city’s Fair Wage Policy and underpaying vulnerable workers, including undocumented workers. Impact has been forced to pay workers tens of thousands of dollars in back wages.
City staff’s decision to hire Impact Cleaning suggests that it is crucial that Council retain the oversight they were given in April of 2012 over contracting out in the cleaning sector. While this in and of itself will not end the rush to turn good jobs into low-wage jobs, it will make it harder for the Ford administration to do so behind closed doors under the veil of secrecy.
Jenny Carson is Associate Professor in the Department of History at Ryerson University.
Photo: Jaclyn Bealer/pennstatenews/Flickr
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