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The Progressive Economics Forum

Temporary Foreign Workers and the Labour Market

Further to recent commentary regarding the Harper government’s dramatic expansion of the Temporary Foreign Worker (TWF) program, consider this shocking factoid:

Even before the expansion of the program envisioned in the current omnibus “budget” bill, temporary foreign workers (who do not have the same rights as other Canadian workers, and whose presence here depends entirely on keeping their employers happy) already accounted for almost 30% of all net new paid jobs created in Canada between 2007 and 2011.

 

The TFW data in the above table comes from the annual CIC tables, based on the stock of TFW workers as of December 1 each year.  Comparing those figures to total paid employment (employees, not counting self-employed) over the same time period, it turns out that over 29% of all net new positions went to TFWs.

The TFW program, therefore, is is not a marginal activity; this represents the core of labour market strategy by employers and this obliging government.   TFW guest workers are not working primarily on farms or in the oil sands; they are working anywhere in the country (over one-third of them in Ontario) that employers complain they can’t find workers to do the right job at the right price.  That, after all, is the essence of the “labour extraction problem” that is at the core of capitalist labour relations (read Chapter 8 of Economics for Everyone for a crach course).  Hence, this initiative by Harper & Co. is aimed at relaxing a fundamental constraint on class relations in our whole labour market, and in that regard represents a very important (and dangerous) shift in the balance of power in our society.

Now, of course, the Harper government has given free reign for employers to tap desperate workers from other countries (with just 10 days’ notice), and given explicit approval to using that supply of labour to drive down Canadian wages.  Allowing TFW employers to pay 15% below the “going rate,” of course, is a moving target.  This practice itself will result in a reduction in the going rate, which in turn will allow TFW employers to pay even less for guest workers in the future.

So we can expect, barring a strong and ambitious fightback, these desperate guest workers to play an even larger role in our labour market than they already have since 2007.

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Comments

Comment from Francis Fuller
Time: May 8, 2012, 4:03 am

I would argue for a relationship between TFW and the upward revaluation of the dollar due to energy exports.

As the dollar revalues higher, employers will find thier margins being squeezed. The means to regain that lost margin is to force down the price of labour by an equivalent amount hence the demand for TFW.

The TFW program is an aspect of the Dutch Disease, a consequence of Harper’s willingness to favour the oil industry, the rest of Canada be damned.

Comment from Angella MacEwen
Time: May 8, 2012, 12:03 pm

Just to your point that TFW are employed throughout Canada – every province saw an increase between 2007 and 2011 – http://www.cic.gc.ca/english/resources/statistics/facts2011-preliminary/04.asp

Comment from Purple Library Guy
Time: May 10, 2012, 9:37 am

This seems like a policy tailor made to alienate the Conservative base. Basically, they’re saying “We want to bring in masses of pseudo-immigrants specifically to take your jobs. Before they can actually start their own businesses and contribute, or assimilate into Canadian society or even learn the language, we’re going to ship them home and replace them with different ones who will start over from scratch. We want to give you all the things you hate about immigration with none of the things you grudgingly accept.”

But at the same time, you can see where it’s absolutely part of the general logic of aggressive neoliberalism; it’s something the Cons can’t not want to do. It’s the flip side of offshoring. Normally, to shrink labour costs both directly and by making local labour more insecure, they ship jobs to places where wages are very low. But there are many jobs which literally cannot be shipped elsewhere–services that require someone physically standing there to serve you that coffee, construction and so forth. So to give the owners of firms in that sort of business the same offshoring advantage, instead of moving the factory and the jobs, you move the low-paid workers to where the jobs are. Same reduced labour costs, same increased unemployment leading to same insecure workers.

Perhaps oddly, the Israelis were among the pioneers of this when they started bringing in outside workers to replace already-cheap Palestinian labour, to make Palestinians less essential to the Israeli economy and more insecure and impoverished. But it’s widespread throughout the Middle East and, of course, it’s not a Conservative policy if the US hasn’t already been doing it for a while.

Comment from Worker
Time: May 19, 2012, 2:45 am

Mininum wage went up 15%Employers will pay foreign workers 15% less.Harper and Christy Clark must be in cahoots.Budgets simalar.Same PR people.Cuts to gov.t jobs Enviroment regs gutted Austerity American lobbysts here.Want cheap labour no enviromental laws .No rights for workers

Comment from Bryan
Time: June 23, 2012, 7:42 am

The guest worker dilemma sure is a tough problem to solve. Employers want reduced cost for labor because it will yield a higher profit for them. So these guest workers are stuck right in the middle with the option of just bearing with it rather than be out of work.

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