Canada’s high inflation rate is disproportionately affecting low-income workers, prompting some of them to demand higher wages from their employers, even if it means going on strike.
Thousands of janitors in downtown Toronto represented by the Service Employees International Union – most of whom clean some of the largest corporate-owned office buildings – will hold a strike vote at the end of this week. They say basic necessities such as groceries and transportation have risen so dramatically in price over the past few months that their present earnings, which hover just above minimum wage, are simply insufficient.
“You have to remember that for low-income workers, you spend a higher proportion of your wages on things like food and housing. So the increases in groceries and fuel costs take a bigger chunk out of the spending of a lower-income person,” said Kaylie Tiessen, an economist and policy analyst at Unifor, Canada’s largest private-sector union.
Renielda Torcende has worked for C&W Services (owned by the commercial real estate services firm Cushman & Wakefield) for just over four years, working 40 hours a week on a night shift that usually starts at 10 p.m. and ends at 6 o’clock in the morning. She cleans buildings at Toronto Metropolitan University, formerly known as Ryerson University, and earns $16.20 an hour. If she wasn’t assigned to work nights, she would earn 50 cents less an hour, or $15.70.
Recently, she started working as a nanny or a cleaner in private homes on weekday afternoons and weekends, blaming the rising cost of food and transportation for needing to take on a second and third job. Ms. Torcende is a single mother, and much of her earnings beyond rent, utilities and food go toward her school-aged son.
“I would love to have one job that pays me more so that I do not have to work a second job,” she told The Globe and Mail, adding that an SEIU strike might be financially painful in the short-run, but could mean an increase in hourly wages on par with inflation.
Canada’s inflation rate hit a 31-year high of 6.7 per cent in March, driven by persistent supply chain disruptions and the Russia-Ukraine war, which has pushed up commodity prices. Approximately two-thirds of items in the Consumer Price Index – including gasoline, shelter and household appliances – experienced annual price gains of more than 3 per cent.
“We know that savings rates are really low for low-income people and they often are the ones to take on debt in a high inflation environment. So, ironically, the medicine to deal with inflation, which is raising interest rates, will again hit the poorest the hardest,” noted Mikal Skuterud, a labour economist at the University of Waterloo.
SEIU Local 2, which represents more than 4,000 cleaners in the Greater Toronto Area, is currently at the bargaining table with 11 different cleaning companies, among them C&W, Amphora Maintenance Services and GDI Integrated Facility Services. The key point of contention is wages – employers are willing to give janitorial staff hourly raises, but not anything close to the current rate of inflation, according to Tom Galivan, secretary-treasurer of SEIU Local 2.
“We are coming into bargaining after many of our members have been on the front lines of the [COVID-19] pandemic. The workers have taken a firm position that they are not going to take wage increases that are less than the rising cost of living,” Mr. Galivan said.
SEIU’s push for higher wages in the wake of severe inflation comes on the heels of a number of other union groups successfully negotiating inflation-level wage increases for their members, particularly those earning minimum wage.
After a week-long strike of 900 workers at a Metro grocery chain warehouse in Etobicoke, Ont., in early April, Unifor secured a 15.8-per-cent increase for its members over the next four and a half years, starting with an hourly increase of roughly 8 per cent in the first year.
Meanwhile, almost 200 warehouse workers at Sobeys in Terrebonne, Que., who are represented by the United Food and Commercial Workers union remain on a strike that is now approaching its third month, as they demand better pay and benefits in a climate of high inflation.
According to Ms. Tiessen, unions have started seriously rethinking collective agreements they are locked into that do not have clauses that automatically grant wage increases that match inflation. “Before the 2008 recession, it was common for collective agreements to have cost of living adjustment (COLA) clauses. We are certainly paying more attention to all the different ways we can start negotiating COLA back into agreements,” she said.
Strikes by unions tend to increase either when unemployment rates are low or inflation rates are high, said Prof. Skuterud.
Using data from Statistics Canada, he studied wage changes for unionized and non-unionized workers by income categories over the past two years. His findings indicate that low-income unionized workers have seen their wages remain relatively unchanged compared to their non-unionized counterparts – factoring in inflation, the latter group has, in fact, seen a slight wage increase.
“Unionized employers are slower to respond to inflation because they have to wait to get to the bargaining table first,” he noted. “I expect we are going to see many difficult negotiations in this era of inflation as unions try to make up for lost wages.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
Vanmala Subramaniam