Thursday, March 10, 2011

Unemployment and Underemployment. But What About Precarious Employment?

"There are great numbers of people who are in work but who, from a financial point of view, might equally well be unemployed, because they are not drawing anything that can be described as a living wage." — George Orwell, The Road to Wigan Pier, 1937 (1)
If there is one word that we have heard more than any other in the past two years, it's "economy". The "economy" in crisis. We can't address other concerns until "economy" is taken care of.

"Economy, economy, economy".

Expensive taxpayer funded TV ads sell us on the notion that Jim Flaherty and Stephen Harper have handled the "economy" well. We averted the worst of the "economic crisis" because of these two whizzes.

First off, as I've already pointed out, they did not handle the "economy" very well at all. Flaherty has just always been a master of disguise, and coupled with Harper's secrecy, most in the media, and indeed most Canadians, have no idea what is happening with our money.

And let's not forget, this was not so much an "economic crisis" as it was a "heist", perpetrated by Wall Street.

Now the media is lapping up the next phase of the fairy tale, suggesting that the government is focused on "jobs" and the corporate tax cuts that will help to create those "jobs", despite the fact that history has proven that to be wrong. "Voodoo economics" in the words of a famous Republican.

But what about those jobs that everyone is raving about? We are told that all jobs lost during the "heist" have been replaced. But how true is that? People who lost their jobs may have found another, but few have been able to replace the jobs they lost. Instead they are working for lower wages, working longer hours, and many are having to rely on foodbanks just to get by.

According to the authors of Persistent Poverty: Voices from the Margins;
Today many people are so absorbed in the struggle to stay afloat and get ahead that they have failed to observe how the focus of concern has steadily inched up the income ladder, from the homeless to the working poor and now, alarmingly, to significant parts of the middle class. (1)
And alongside unemployment and underemployment, there has been a significant growth in precarious employment.

Precarious employment is work for remuneration characterized by uncertainty, low income, and limited social benefits and statutory entitlements. 'This kind of work can have multiple dimensions. It might be self-employment or paid employment; it might be temporary, permanent, full-time, or part-time.'

The uncertainty is not only in whether or not you will have a job the next day, but is also a concern over whether or not you will have a full pay cheque. Often employers will send staff home early if it is slow, to save money. But this makes it difficult to maintain a household budget. You live day to day, not just pay to pay.

Another word we hear a lot these days is "growth". Economic growth as another measure of our success. However, "Canada's most recent burst of economic growth has been accompanied by stubbornly high rates of poverty among working-age adults" (1). This is not a good measure of a country's economy.

And it is certainly not "recovery", when so many people are on financial "life support".

Recently we are seeing headlines that our banks are recording record profits. The same banks who were gifted with $125 billion dollars of our money.

National Bank reports record profit

Royal Bank Profit Rises to Record on Consumer Lending

Bank of Nova Scotia Reports Record Profit, Raises Its Quarterly Dividend

However, there is one headline that may have been lost in all of these feel good bank profits stories. Hunger on the rise in Canada, report warns

What if those banks took some of that massive profit, and instead of rewarding their investors, paid back some of the money we gave them to help feed our poor? I know it would never happen, but what if?

If we view those headlines as sin in it's rawest form, another story would probably have you on your knees. The income disparity. The growing gap between rich and poor. The increasing struggles that are now reaching the middle, are not an accident.

A leaked memo in 2006, from Citigroup, to it's wealthiest clients, reveals that what is happening today was cleverly engineered, and the memo provides its readers with suggestions to make sure that the trend continues.
The World is dividing into two blocs - the Plutonomy and the rest. The U.S., UK, and Canada are the key Plutonomies - economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc.

... In a plutonomy there is no such animal as"the U.S. consumer" or"the UK consumer", or indeed the"Russian consumer". There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the"non-rich", the multitudinous many, but only accounting for surprisingly small bites of the national pie.

... We posit that the drivers of plutonomy in the U.S. (the UK and Canada) are likely to strengthen, entrenching and buttressing plutonomy where it exists. The six drivers of the current plutonomy: 1) an ongoing technology/biotechnology revolution, 2) capitalist-friendly governments and tax regimes, 3) globalization that re-arranges global supply chains with mobile well-capitalized elites and immigrants, 4) greater financial complexity and innovation, 5) the rule of law, and 6) patent protection are all well ensconced in the U.S., the UK, and Canada. They are also gaining strength in the emerging world. (2)
The memo is 30 pages long and I'm dissecting because there is a lot of important information that will have a profound affect on "average Canadians". But what's interesting is that the authors provide some warnings to the ultra-rich. The threats to the status quo.
We can see a number of potential challenges to plutonomy. The first, and probably most potent, is through a labor backlash. Outsourcing, offshoring or insourcing of cheap labor is done to undercut current labor costs .... Low-end developed market labor might not have much economic power, but it does have equal voting power with the rich .... the third threat comes from the potential social backlash. (2)
A labour movement, a vote equal to that of the rich and a social backlash, all threaten the wealthy's hold on power.

In the United States, the filthy rich Koch brothers created the Tea Party to stave off a potential labour movement, but events in Wisconsin, Egypt and Tunisia, remind us that real change is possible. We don't have to accept this. There should be no poverty in a wealthy country like Canada. And people shouldn't have to work so hard for so little.

Stephen Harper's VP when he was President of the right-wing National Citizens Coalition, Gerry Nicholls, claims that the difference between the "left" and the "right", is that the the "left" is guided by emotion, while the "right" is guided by reason.

The Canadian Senate spent 2 1/2 years investigating poverty in Canada, but Stephen Harper has declared that he has no intention of acting on any of their recommendations. That's "reason"?

Sorry, but little old emotional leftie me, sees that there is something fundamentally wrong with that. I'm glad that I weep for the poor and the homeless. And I'm glad that I feel empathy for the disenfranchised, but none for the poor Wall Street banker who was forced to swallow his pride and accept a handout from the taxpayer.

If the conditions of the Great Depression are being recreated, it's time to also recreate the movements that brought us out of it. And it sure wasn't corporate welfare.


1. Persistent Poverty: Voices From the Margins, by Jamie Swift, Brice Balmer and Mira Dineen, Between the Lines Toronto, 2010, ISBN: 978-1-897071-73-1, Pg. 16-25

2. Equity Strategy, By: Ajay Kapur, Niall Macleod, Narendra Singh, Citigroup Global Market Research, October 16, 2005


  1. I remember precarious employment. No fun at all, let me tell you.

  2. My son's in that situation now. After 17 years with the same company he was laid off a year ago. In the summer he helped install pools. If it rained he didn't work. He has a full-time job now but at about 60% of what he was making before. No benefits.

  3. Sitting tantalizingly in a warehouse in Winnipeg are 2,000 boxes of information about one of the most fascinating social policy experiments in Canadian history.

    The experiment began in 1974. It was designed to test the concept of a guaranteed annual income in a small, fairly typical, community. Dauphin, a rural municipality of 13,000 midway between Winnipeg and Regina, was chosen at the behest of former Manitoba premier Ed Schreyer.

    The city’s low-income residents were lifted and kept out of poverty, using a negative income tax. (Canada Revenue Agency topped up their income if it fell below the poverty line.) They could use the money as they chose.

    Here is what Forget’s research has already shown:

    • During the GAI experiment, Dauphin had a dramatically lower rate of hospital admissions than similar communities in Manitoba.

    • Its high-school dropout rate fell and stayed down for a generation.

    • It had fewer accidents, serious injuries, arrests and convictions.

    • Consultations for mental illness declined.

    • And, contrary to policy-makers’ fears, people in Dauphin did not stop working or reduce their hours to get “free” money from the government.

    “In all of the indicators I could find for quality of life, people did better,” Forget says.

    But she can’t do a proper cost-benefit analysis. “Someone needs to estimate the savings associated with reduced bureaucracy, better education and health outcomes and probably lower costs associated with crime and special education,” she told The Uniter, a student newspaper at the University of Winnipeg.

    Research Profile - Life in a Town Without Poverty

    Dr. Evelyn ForgetA new look at a radical experiment in Manitoba 35 years ago shows that guaranteeing people an annual income leads to better health

    "Politically, there was a concern that if you began a guaranteed annual income, people would stop working and start having large families," says Dr. Forget, who presented her findings this year at the Institut national d'études démographiques in Paris. "But we found that, if anything, birth rates among the youngest women declined."

    "I think people living with poverty are living with a great deal of stress.

    In fact, stress is almost too mild a word for the kind of terror people live in while trying to care for their children and make good decisions for their children when they don't have the capacity to enact those decisions."
    -- Dr. Evelyn Forget