[I had sent Walkom a copy of the Bob Evans article he quotes extensively -
dr]

There's much we can do to combat poverty
Enforcing current laws would help
Sep. 30, 2006. 08:43 AM
Toronto Star
THOMAS WALKOM

This newspaper has launched an ad campaign inviting readers to ask why
(among other things) so much poverty exists in Canada. They may find the
answer unsettling. At one level, poverty is a deliberate policy. The
working poor are poor mainly because their employers don't want to pay them
very much. This cheap wage policy is aided and abetted by governments in a
host of ways — by making it difficult to unionize low-wage workers, by
scaling back unemployment benefits, by failing to enforce even the weak
labour standards that do exist.

This is not to say that poverty is easy to eliminate. The poor, as someone
once noted, will always be with us. But recent studies show that the scale
of inequality in North America has accelerated dramatically over the past
25 years.

Writing in the latest edition of the journal Healthcare Policy, University
of British Columbia economist Robert Evans points out that over this
period, most of the economic gains recorded in Canada were appropriated by
the super-rich. Between 1976 and 1990, average per capita income in Canada
barely budged. But over the same period, the top 0.01 per cent of earners
saw their incomes more than double.

To Evans, the trend corresponds with the rise of a "corporate kleptocracy"
— highly paid CEOs and other senior executives who milk the profits from
the firms they run, leaving little or nothing to top up the wages of those
at the bottom.

The growing influence of the super-rich, he argues, helps to explain the
success over the past two decades of what he calls the elite agenda: lower
taxes for the well-to-do, smaller government and reduced social spending.

All of this directly affects the working poor. If, thanks to the "elite
agenda," it is near impossible for most workers to collect unemployment
benefits (as it has been since the mid-'90s), the pool of workers competing
for low-wage jobs grows — which in turn keeps those wages down.

In effect, there are now two types of workers in Canada. The lucky ones
have full-time, often unionized, jobs with good wages and benefits such as
pensions. The less fortunate make do with non-standard work. They may work
at two or three part-time jobs; they may be temporary workers, contract
workers or those who, while doing the work of normal corporate employees,
are listed on the books as self-employed.

In the past, the term "self-employed" was usually applied to well-paid
professionals like doctors and lawyers. Now, all kinds of low-wage workers
— from delivery people to television researchers — are treated by their
bosses as self-employed. The reason? An employer does not have to pay
employment insurance or Canada Pension Plan premiums for self-employed
workers. Minimum wage and maximum hours of work laws do not apply to such
workers. Nor are they entitled to the vacation or overtime pay that regular
employees must receive by law. Unionization is near impossible.

Theoretically, bosses are not supposed to skirt Ontario's Employment
Standards Act by arbitrarily reclassifying their workers as self-employed.
But plenty do. Sometimes they are brazen. Sometimes they are sly; they fire
well-paid unionized workers, contract out their jobs to another firm and
let that firm break the law.

As Toronto's Workers' Action Centre notes, the Ontario government itself
estimates that one in three employers in the province violates the
Employment Standards Act. Yet, there is no serious attempt to enforce the
law. The labour ministry is understaffed. Even when it finds an infraction,
it rarely prosecutes offending employers.

All of this underlines the fact that poverty can be combated if people wish
to do so. As Evans points out, Canada's spectacular growth in income
inequality was not the inevitable result of globalization or some other
alleged iron law. In France and Japan, for example, the gap between rich
and poor did not widen over this period.

Rather, the exacerbation of poverty within Canada is the result of
deliberate actions that can be rectified. Just enforcing employment
standards laws would help. Strengthening them by, for instance, making it
easier for those in non-standard jobs to unionize would bring up wages.

Stricter government regulation could eliminate the wink-and-nudge practices
that typify corporate executive compensation schemes — schemes that provide
lots of lolly to the kleptocrats at the top while leaving employees at the
bottom vulnerable to the grim world of non-standard work.

Why are there so many poor people in such a rich country? Because we allow
it. We do not have to.


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