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How do the party platforms address the changing nature of work, pay, and poverty?

October 6, 2019

The world of work is changing and creating anxiety about jobs and incomes. There is some overlap on how the major parties contesting the Canadian federal election propose to deal with these challenges, but the Conservatives are definitely the outlier. The Greens score high on vision but low on feasibility,  both the New Democrats and Liberals put a list of reasonable proposals on the table, with the Liberals offering a bigger vision that is also feasible. The Conservatives don’t seem to propose anything to address the world of work, imagining citizens as consumers, and implicitly offering a smaller role for government in the workplace.

 

The “changing nature of work” has to be—right up there with climate change—one of the hottest issues facing Canadians, a big cause of uncertainty and insecurity that underlies the middle class malaise that all of the parties contesting the Canadian federal election are hoping to address.

And quite rightly so. The future of work and globalization should raise a lot of anxiety. Richard Baldwin’s latest book, The Globotics Upheaval: Globalization, Robotics and the Future of Work, argues that as powerful innovations in digital technology meet globalization many higher paid workers in service jobs will be confronted with the disruptions that workers in manufacturing jobs had to deal with during the first wave of globalization during the 1990s.

If, as he argues, its “coming faster than most people believe,” then what should the politicians vying for our votes be doing about it? The first step for public policy is to foster higher and more secure incomes, and to offer better insurance.

How well do the platforms and promises stand up? I offer a review of the four major parties in the same spirit as the excellent review by Trevor Tombe and his co-author on climate change policies. Read “How The Four Federal Parties Climate Plans Stack Up” published in Chatelaine, and you will notice that my labour market and social policy scorecard is essentially the same.

There is in fact a good deal of overlap between the platforms, with one exception: the Conservatives have not come to the game with anything to offer. But all the other parties would:

raise the minimum wage to $15 for those industries in federal jurisdiction

ban unpaid internships

address workplace training but in different ways

But looking at where they differ, the Greens score higher on vision but much lower on feasibility, and both the New Democrats and Liberals put a list of reasonable proposals on the table, but with the Liberals offering a bigger vision that is also feasible.

The Green Party scores high on vision, low on specifics

“The world of work is changing rapidly,” say the Greens. The biggest transition they imagine is that facing workers in the fossil fuel sectors as the green economy grows and displaces them, but they do recognize the coming challenges that machine learning and artificial intelligence, without necessarily appreciating that this will impact all workers in all sectors.

Source: Green Party (2019) “Honest. Ethical. Caring. Leadership.” page 31.

That is why the part of the platform addressed to “ending poverty” rings true, offering a backstop to the incomes of all Canadians. The platform states that “Of all Canada’s social problems, child poverty may be the most shameful.” But the platform goes even bigger, proposing a “Guaranteed Livable Income” for all. Now that is vision.

OMG, I can’t believe this, as I sat here writing these very words the door bell rang and two volunteers from the Green Party stood on my door step anxious to explain the party’s platform to me. I kid you not!

“We will institute a Guaranteed Basic Income.”

“What is that?”

“A Basic income that everyone will have a right to?”

“You mean if I stopped working right now I would get money from the government? How much would that amount to?”

“Well I don’t really know.”

Indeed, the Parliamentary Budget Officer does not appear to have received a request from the Party to cost a Basic Income proposal, but to be fair the platform puts no specifics on the table, and only talks about entering into negotiations to establish a program, stating that the Party will:

Establish a universal Guaranteed Livable Income (GLI) program to replace the current array of income supports, such as disability payments, social assistance and income supplements for seniors. … payment would be set at a “livable” level for different regions of the country. The negotiation to implement a livable income across the country would take place through the Council of Canadian Governments. Unlike existing income support programs, additional income would not be clawed back. Those earning above a certain total income would pay the GLI back in taxes. (Green Party 2019, page 30).

Vision outpaces specifics on another important policy. The Green platform is certainly correct in suggesting that “We are overdue to modernize our Employment Insurance Program to better meet the needs of today …”

The federal government has almost complete authority over the “Employment Insurance” program, making it the first and most obvious thing to address job and income insecurity. But nothing else is said about this program with the exception that benefits should be made portable. But Employment Insurance benefits are already portable. Yes, this program is long overdue to be modernized for the new economy, but the Greens offer no specifics.

New Democrats offer some tried and true policies with a nod to guaranteed income

The New Democrats are at least much more concrete on what they would do with Employment Insurance, but in way that increases generosity without offering big innovation for a new world of work.

That said, they put a major change on the table that will go a big way in making this form of insurance more accessible: Canadians will need only 360 hours of insurable unemployment to qualify for benefits regardless of where they live in the country.

The existing “Variable Entrance Requirement” has been a source of contention in many parts of the country, particularly in Ontario where the unemployment rate is usually lower. Canadians living in a region with a local unemployment rate less than 6% are required to have worked 700 hours in the past 52 weeks to qualify for benefits, those living in areas with an unemployment rate twice as high require as little as 420 hours.

So a uniform rule of 360 hours is a major change to this program, making it easier to get access regardless of where you live. But the New Democrats go further. The replacement rate would increase to 60% of maximum insurable earnings from the current 55%, and a floor would be put on benefits so that no one receives less than $1,200 a month.

This latter “low income supplement” is a guaranteed income of sorts, but falling short of the kind of vision the Greens image as it is conditional on having had enough work to qualify and subject to the existing 14 to 45 week maximum benefit entitlement. These changes should be welcomed by many workers, particularly in Ontario, but they continue along the lines of making Employment Insurance a stop-gap for lower paid and intermittent work, rather than insurance for big long-term loses, and of potential benefit to workers paid more than the average.

I can’t seem to find any information, neither in the platform nor from the Parliamentary Budget Officer, on the cost of these proposals.

The New Democrats also propose to create 300,000 good jobs, and mandate that all employers spend one percent of payroll on training their workers. It is not clear how they would do this. But they do say that they would “work with the provinces to launch a national basic income pilot project, in addition to continuing Ontario’s program, to gather data about this approach to tackling income precarity.” A smaller vision than the greens, but no more feasible.

Liberals strike a balance between vision and feasibility

If, as the Green Party’s platform says “Of all Canada’s social problems, child poverty may be the most shameful,” then the Liberal platform offers a solution, having in essence already created a basic income for families with the Canada Child Benefit, they propose to enhance this program in a number of ways.

Source: Liberal Party (2019, page 9)

But the biggest proposal is to introduce a

Guaranteed Paid Family Leave – an ambitious program that will make sure that parents who don’t qualify for paid leave through Employment Insurance, or who don’t get enough because they’re between jobs, earn little, or haven’t worked enough hours, will receive a guaranteed income during the first year of their child’s life. This will be especially helpful for women, who
typically carry more family responsibilities, and will
mean that every single Canadian parent will be able
to afford to spend the first year at home with their
child, when it matters most. (Liberal Party 2019, page 9).

Source: Liberal Party (2019, page 11).

This addresses family and demographic risks, and the fall-out of job loss for families with children, saying nothing to those living on their own, where a big and increasing chunk of the poor are to be found. So whereas the Green vision for ending poverty extends to all, but with no specifics, the Liberal plan covers families and children with a proven and explicit set of proposals.

The most important and most relevant change to Employment Insurance to address the future of work is the “Career Insurance Benefit”, an enhancement of regular benefits that will offer insurance not just for the time unemployed in the search of a new job, but also for the income loss from taking a lower paying job.

This is a form of “wage insurance“, and will take an innovative step in making Employment Insurance more relevant for many workers, who may never have collected benefits in the past and are laid off from jobs that they have held for at least five years. No other party has offered anything of the sort.

The Liberal platform is distinguished by having these proposals costed by the Parliamentary Budget Officer. There is a vision here, but it is interesting the Liberal Platform does not state it more boldly, not even offering a restatement of the Poverty Reduction Strategy that only months ago was passed into law and which offers an official poverty line and a set of explicit targets.

The Conservative platform is silent on the world of work

The Conservative party has not released its platform, so it is hard to comment on the total package of policies and assess how it might address the new world of work. Their web site does announce “Andrew Scheer to Make EI Matrenity Benefits Tax-Free,” but the actual policy proposal falls short of that. As described by the Parliamentary Budget Office the policy actually involves a non refundable credit reducing the rate payable to the lowest federal marginal income tax rate, and besides if you are already in that tax bracket it is of no use to you.

Not a big innovation here, and certainly not as generous as the specific proposals put forward by some of the other policies.

It is hard to say much more. To the extent that the Conservatives have a vision for the future of work it would seem to treat Canadians as consumers not workers, and there is no discussion of changes to workplace regulations, insurance, social and incomes policies.

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