Scrap the cuts: Changes to EI drive down wages for all

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In the current economy, we are told, it is unlikely that you will make it through your life without being laid-off and have to search for a new job. In fact, we are told that this will actually happen more than once or twice, it will be a rather regular.

The reason for this is not that we are all bad workers, but rather because that the nature of capitalism. The economic system imposed on us has brought with it a reduction in secure employment and a massive increase in precarious work.

Given this increase in precarious work, you would think that a reasonable thing to do would be to beef-up the Employment Insurance system. After all, the EI system was established in 1940 when the government finally recognised losing your job and falling into poverty was not very good for the economy, not to mention social order.

Well, this Conservative government has done the opposite. Harper's Conservatives have brought cynical changes to the EI system making it harder on the close to 10 per cent of workers that are unemployed. While the EI program has not always worked for all workers (changes made in the 1990's mean only 40 per cent actually qualify for EI), the Conservative changes will be the first time it works against workers.

The drastic reform of the EI system brought in with last year's omnibus budget will work with the Temporary Foreign Workers Program (TFW) to drive down wages for Canadian workers.

The changes to EI include forcing "frequent" unemployed (meaning that growing group of precarious workers) to take jobs at a lower skill level than they are trained and at 30 per cent lower wages. This means increasing competition for work at the lower skill level, driving down wages. This is bad enough. However, it also means that it will be harder to find workers that live in Canada to do precarious skilled labour. This leads to an increase in demand for temporary foreign workers. The bonus is that if a corporation uses a temporary foreign workers, they can pay those workers 15 per cent less than they were paying those who came before.

The increase in precarious work, which is a direct result of other policies of the Conservative government, and the Liberals that have come before them. The difference now is that the changes that make accessing EI harder, make those that get EI to take jobs below their skill level at a wage cut and a TFW program that gives an incentive to hire discount labour mean you will not get your job back even if it is re-offered. You will be too busy competing with your teenage children and your "retired" parents at the burger joint for a minimum wage job.

It is a near-perfect system of exploitation and wage reduction as so terribly highlighted by the recent outsourcing of jobs at Royal Bank of Canada. Over 40 workers were laid-off because they cost RBC more than the temporary foreign workers that could replace them. They were lucky in a way as the public outrage meant RBC had to give many of those that were laid-off jobs in other parts of the company. However, if they do end-up on the unemployment line like so many of their fellow workers in Canada, they will be facing a system stacked against them.


Graham Cox is a national research representative with CUPE. 

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