Unemployment in Canada

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Unemployment Disgrace In Canada

The Actual Unemployment Rate in Canada Approaches 18%?
Government sources claim under 5%

The discrepancy between the Canada unemployment rate and the actual unemployment rate is because government sources only claim those on Employment Benefits and disregard those on Income Assistance and those who have quit registering their employment status or have never been gainfully employed.

Unemployment is a huge burden on Canadians both financially and socially. First of all, unemployed persons do not pay income taxes, therefore the shortfall must be made up by those who are able to pay taxes.

One big problem with both Employment Benefits and Income Assistance are the penalties applied to persons trying to find work and taking underpaid jobs while on Employment Benefits or Income Assistance. They are subtracted from their monthly allowance. And so they should be – except, the benefits are not enough for most to live on. Hence people are placed in risk of poverty.

There is also the problem of where the recipient resides. Residing in a larger community in relative dollars, the recipient receives less than a person residing in a smaller sub-urban area when taking into account the higher cost of housing. This adds to the poverty quotient of those residing in larger communities. Although there are programs to partially even out these disparities, all these programs add to the bureaucracy of implementing these programs and hence the costs; that is, if the persons who need the extra financial assistance are even made knowledgeable of assistance in the first place.

Here are some Canadian resource links; Canada Benefits Programs

Increasing the Opportunities for Meaningful Employment.

There needs to be an umbrella department which oversees all governmental and public labour sources and resources in Canada. Right now three levels of government operate on differing standards and many utilities and services are run semi-independently from government, ie; hospitals, schools, ferries, highways maintenance etc. We have experienced a huge sell-off of much of Canadian infrastructure to private corporations especially in the transportation and energy sector. We have also experienced large scale downsizing and contracting out of many taxpayer supported jobs.

Contracting out may be beneficial for the corporation or facility but it hampers the community greatly.

One case in point. BC Hospitals.

Laundry, food service and janitorial services have been privatized and contracted out in BC hospitals.
Since 2003, about 8,500 public sector jobs have been terminated and the work contracted out to three of the world’s largest trans-national service corporations, offering less than 60% the previous pay. The reality of these newly privatized jobs: low pay, meager benefits, heavy workloads, poor training, more injuries, family stress, and no job security.
The contracts awarded to private companies usually save the service approximately $3 hr or $24 per day/Employee. At 200 employees this could save about $115,000 per mo. + benefits. Sounds good, but:

When a service takes 200+ jobs in a community and reduces their pay from $18 hr to $11 hr it is actually taking $11,200+ per day of redistributable income out of the system. Every dollar spent in a community redistributes 5 to 7 times, so in effect this contracting out is costing the community $55,000 to $77,000 per day or $1,848,000 per month in monies spent within the community. Monies that would be spent in restaurants, movies, consumer goods, clothing etc and help provide jobs to other people, besides increasing the tax base of that community by making businesses more viable.

Decreasing a working wage to $11.00 per hr means less disposable income if any and increases the poverty quotients in the community. Nobody benefits.

See: Canada Poverty Facts

• Reducing Child Poverty to Increase Productivity: A Human Capital Strategy
• Insight: Rethinking Child Poverty

Canada needs to adopt a minimum guaranteed income for all persons over 18 adjusted to the cost of living quotient of where they reside. This has be tied to a must work if able or be in school to receive policy. There are enough jobs in Canada, just not enough incentive to fill those jobs.

The first incentive:   Adequate Income

The minimum wage in each province needs to equal the guaranteed income based on a 40 hr week. A guaranteed income will put more money into the hands of low income individuals and families who will then spend that extra money, putting millions of extra dollars into local economies. Unlike the wealthy, much of whose tax cuts go into foreign luxury items and off-shore investments, minimum wage earners spend their extra cash at local small businesses.

Small family businesses will actually benefit from raising the minimum wage,. In 2000, 71% of low wage jobs where in businesses with more than 20 employees; 40% were in businesses with over 500 employees.

The Canadian Federation of Independent Business states, “Because small businesses have difficulty hiring and retaining qualified workers, they are willing to pay higher wages to keep skilled workers. Otherwise they must go through the onerous process of hiring and training new employees, and it can take months if not years for their investments in employees to bear fruit.”

“We need also to raise the basic personal income tax exemption. If the intent of minimum wage is to ensure a minimum income for the poor, then one sure measure to achieve this is to increase the basic personal income tax exemption. This leaves more money in their pockets by raising the threshold at which they start paying personal income tax.”

The hospitality and tourism industry will be most effected by a increase in minimum wage, therefore introduce a special minimum wage for those earning gratuities. Quebec and Ontario already have a special minimum wage for these sectors.

Current social assistance rates in Canada are nowhere near what people need to cover basic necessities such as food, rent, utilities, clothing and transportation. A minimum wage would effectively act as a “ceiling” for social assistance rates. An inadequate minimum wage means inadequate social assistance rates.

Until the adequacy and integration of income security programs improve, a large number of unemployed people will rely on social assistance. At present, a significant number of people who are able to leave social assistance because they have found a job, are forced to return to social assistance because of the temporary or precarious nature of their work. It should also be acknowledged that some parents, who would prefer to do paid work rather than stay at home to parent, are unable to because of the lack of affordable, accessible, regulated childcare.

It should also be further acknowledged that some parents, because of their spouses low pay, can not afford to stay at home to parent, and are financially forced to go to work. Because families are financially hindered, daycare and child supervision is compromised leaving children at greater risk of becoming involved in delinquent behavior.
 

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