D.C. Fraser is Glacier Farm Media’s Ottawa correspondent. Reach out to him by emailing firstname.lastname@example.org.
The coronavirus pandemic is revealing a fundamental problem with our society — thousands of essential workers don’t make nearly enough money.
The question is, how to fix it.
It’s worth debating whether that responsibility should fall to private employers or the government, which has already launched a basic income in everything but name.
The Canadian Emergency Response Benefit (CERB) needs to be adjusted to ensure it is not clawed back from those also earning some income. But employers looking for workers should also consider changes to attract domestic labour.
The federal benefit offers $2,000 each month to people unable to work because of the COVID-19 pandemic. It has cost the federal government close to $39 billion so far, as more than eight million people have applied since the start of April.
In a recent virtual press conference, Bank of Canada governor Stephen Poloz told reporters the CERB offers more flexibility for the government to respond to emergency situations, such as the pandemic, than traditional employment insurance.
“The CERB, the way it’s been created, now that we’ve seen how that works, that works a lot faster than EI,” Poloz said. “Adding that tool to the fiscal tool kit is the sort of thing that can make the fiscal delivery more automatically sensitive to the economic cycle.”
It wasn’t an explicit endorsement of CERB, which is essentially a basic income offering a lump sum payment to people experiencing tough times. Poloz was, however, suggesting some version of the program is worth keeping.
That doesn’t mean tweaks aren’t required.
Currently, if someone earns more than $1,000 a month, they are disqualified from receiving the benefit.
Many people argue the program requires more flexibility to allow claimants to continue receiving some of the CERB benefit while also earning more than $1,000 a month.
The basic idea is, if you allow people to earn a bit more money at a job while also continuing to receive money from the government, it will incentivize people to accept vacant positions.
It is an argument that federal policy makers should pay close attention to. And it won’t be surprising if they do, given the amount of attention and lobbying the allowable-income issue has received.
But it should not deter from a collective realization that the CERB is not wholly responsible for deterring businesses from being able to hire workers. Poor wages and bad working conditions are also to blame.
Over a year, CERB would pay someone $24,000.
If that is about the same or even more than what is being offered by a vacant job posting, the fault is on the employer for not paying a better wage.
As an example, vacant jobs at meat packing plants currently offer wages around $29,000 to $47,000 a year.
In announcing $4 billion worth of wage “top ups” for workers in essential services, Ottawa has already attempted to further incentivize, and reward, workers to continue working.
While offering the additional money is admirable of governments, it should cause all Canadians to pause and think about the workers we’ve come to realize are essential and integral to ensuring grocery stores are operational.
They are often poorly paid and working in less-than-ideal conditions. It’s tough to make some of these jobs, like working in a meat packing plant, desirable, which is why so many Canadians choose not to do them.
The pandemic is a disaster, but it is also an opportunity to reckon with the problems built into our society. We should not let it slip away.