New changes will tilt labour market in favour of low-wage employers

Changes to EI announced today pull back the curtain on Harper’s low-wage agenda says the Alberta Federation of Labour.

“These changes will drive down wages eventually and inevitably force people into jobs they don’t want at wages lower than their previous job” says AFL President Gil McGowan.

The Federation, which represents over 140,000 workers across the province, warns that this morning’s announcement by Human Resources Minister Diane Finley will inevitably hurt all working families in the country, including here in Alberta.

“To add insult to injury, rather than talking to Canadians about his sweeping changes to EI, the government of Stephen Harper buried the new measures in the omnibus budget bill,” says McGowan.

“The way these announcements were made shows the depth of secrecy and anti-labour sentiment espoused by the Conservative Government of Stephen Harper.”

Under the new regulations – planned for early 2013 – there will be three new categories for unemployed workers. Each class of worker will be forced, by varying degrees, to consider jobs with lower and lower wages than they previously earned. For example, an Albertan who is a “frequent EI user,”‘ working in industrial construction and facing regular layoffs and contract work, would be forced to accept any work for which they are qualified for and take a pay cut up to 30 per cent less than their previous hourly wage.

McGowan underscores that new EI measures mark a drastic shift in how the labour market will operate in Canada. “These changes radically alter labour market pressures in favour of employers offering low wage jobs to Canadians.”

“When the labour market functions as it should, employers strengthen and increase wages to attract workers. These new changes allow employers to simply sit back, wait, and keep wages low for Canadians. Eventually, an unemployed worker will be bullied into a low paying job,” says Gil McGowan.

“These changes coupled with plans by the Federal Conservatives to get rid of the Fair Wages and Labour Act, and a ramping up of the Temporary Foreign Worker Program, show that Canada is on a crash course towards labour austerity and conditions that are clearly in favour of employers, not workers.”

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AFL President Gil McGowan will be available to the media at 1:30 pm at the CUPE Western Municipal Convention located at the Coast Edmonton Plaza Hotel located at 10155 105 Street in Edmonton. He can be reached by phone at 780-218-9888.

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Backgrounder

With the Conservative government’s changes to the Employment Insurance (EI) system, unemployed workers will be pressured into taking jobs with lower wages than they had when they were employed. This pressure increases the longer a worker is unemployed and will increase faster based on workers’ history of EI claims.

The Conservatives now place claimants into three categories:

• Long-tenured workers: workers who received 35 or fewer weeks of regular or fishing EI over the last five years. These workers will be allowed to restrict their job searching to positions that pay 90 per cent of their previous earnings and are in their “usual” occupation.
• Frequent claimants: workers who had three or more regular and/or fishing claims and received over 60 weeks of regular and/or fishing benefits in the past five years.
• Occasional claimants: workers not captured under the two above definitions.

All workers will be forced to accept wages lower than those they earned while working the longer they receive EI benefits.

Studies show that workers with high levels of education take longer to look for and find a job when they are unemployed.

Under the Conservatives’ changes to the EI system, workers with high levels of education could be forced into jobs that are below their skill set or usual wage range the longer they spend looking for suitable employment.

These changes will have major consequences to Canada’s labour market. Employers now do not have to increase wages to attract workers. They can simply sit back and wait for unemployed workers to accept low-wage jobs.