Friday, August 17, 2018

Labour & Pop Culture: Death to my Hometown

This week’s installment of Labour & Pop Culture looks at “Death to my Hometown” by Bruce Springsteen. This Celtic-infused (and very angry) song was part of Springsteen’s 2012 album Wrecking Ball, which examined the impact of the 2008 recession on Americans.

The song's premise is that economic mis-management is a form of violence, with effects analogous to war. He particularly notes that the impersonal nature of the economic system means that it is hard to identify and punish those responsible for economic crimes:
Send the robber barons straight to hell
The greedy thieves who came around
And ate the flesh of everything they found
Whose crimes have gone unpunished now
Who walk the streets as free men now
Protest songs like this one do a nice job of capturing frustration and giving it voice. What this song lacks any sort of call to action (excepting the vague “be ready when they come” and "send them straight to hell") that would change the underlying political economy that allowed this economic violence to be perpetrated on the working class.

Well, no cannon ball did fly, no rifles cut us down
No bombs fell from the sky, no blood soaked the ground
No powder flash blinded the eye
No deathly thunder sounded
But just as sure as the hand of God
They brought death to my hometown
They brought death to my hometown

Now, no shells ripped the evening sky
No cities burning down
No army stormed the shores for which we’d die
No dictators were crowned
I awoke on a quiet night, I never heard a sound
The marauders raided in the dark
And brought death to my hometown
They brought death to my hometown

They destroyed our families, factories
And they took our homes
They left our bodies on the plains
The vultures picked our bones

So, listen up my sonny boy, be ready when they come
For they’ll be returning sure as the rising sun
Now get yourself a song to sing
And sing it ’til you’re done
Sing it hard and sing it well
Send the robber barons straight to hell
The greedy thieves who came around
And ate the flesh of everything they found
Whose crimes have gone unpunished now
Who walk the streets as free men now

They brought death to our hometown, boys
Death to our hometown
Death to our hometown, boys
Death to our hometown

-- Bob Barnetson

Tuesday, August 14, 2018

New labour market training agreements announced

In late June, the federal government announced it had signed new labour market training agreements with Alberta worth $1.7 billion over the next six years. There are two main funding streams:

The Labour Market Development Agreements (LMDA) address Type 2 Employment Insurance (EI) training benefits. EI claimants as well as some EI premium payers can receive training under this program. It looks like Alberta gets about $154m per year to provide thee benefits to Albertans.

The Workforce Development Agreements (WDAs) replace the Canada Jobs Grant Fund (CJGF) as well as the Labour Market Agreements for Persons with Disabilities and the Trageted Initiatives for Older Workers (both of which re now defunct and subsumed by the WDA). The WDA funds training that is not eligible to be covered under LMDA and Alberta gets about $91m per year under WDAs.

Interestingly, it appears that Alberta will continue to operate the Canada-Alberta Job Grant. This grant was the brain child of Jason Kenney when he was the federal employment minister. Kenney promised that the grant would see employers select unemployed people, offer then training and then hire them. Specifically, Kenney said
The whole point of the job grant is it will involve employers in selecting employees who they believe will have the propensity to work, getting them specific training, and the employers offer them a job at the end of it.
The mechanics of the CJG were that employers could spend up to $5000 for training and seek matching funds at a 1:2 ratio (i.e., up to $10,000) from the government to offset training costs. In effect, the CJG transferred the power to determine what kind of labour market training would by funded to employers.

Even a few years into the grant, it was apparent that things were going poorly. British Columbia reported that, after two years of operating the Canada-BC Job Grant, 99% of participants were drawn from the ranks of the already employed. This finding reveals that the CJG is not meeting its goal of increasing labour-market attachment among unemployed British Columbians.

Additionally, the majority of participants already had some PSE and most saw no wage-increase following the training. Less than 4% of employer applications identified participants as a youth, a person with a disability, Indigenous, or a new immigrant. Only 30% of participants were women. Finally, only a minority of employers used the CJG to pay for new or additional training. Most employers used CJG funding to offset existing training costs.

Alberta reported a very similar experience, noting that the Canada-Alberta Job Grant is being used to mostly train employed men with PSE in skilled management and non-management occupations. Manitoba concluded:
No evidence was found the Grant increased the supply of skilled labour, increased participation of underrepresented groups, or developed the long term human resource capacity of employers. Over the short term, training did not increase labour market attachment, as very few participants obtained or retained jobs as a direct result of the training. The vast majority of training participants were employed before receiving training (99%). (p.51)
The Northwest Territories was particularly critical of the impact of the CJG on existing labour-market training programs:
The cost sharing element of the Job Grant also negatively impacted funding for existing employment and training programs, particularly those targeted for unemployed, and under-employed individuals who do not have a job offer, and for individuals entering or re-entering the labour force. These impacts will increase as the Job Grant is fully phased in to reach 60% of the Job Fund. (pp. 65-66).
While there are exceptions to this general pattern (as well as data gaps in the evaluations), the CJG appeared to redirect federal training dollars towards already employed men in high-status and high-wage occupations. The CJG funding model also shifts federal funding away from assisting unemployed workers to become job-ready. In these ways, the CJG replicates existing patterns of advantage (and disadvantage).

In terms of access, control and benefit, the CJG privileged the interests of employers. Employers determined which employees received what kind of training under the CJG because employers made applications for the funding. Employers were the main beneficiaries of the CJG, receiving taxpayer-subsidized training for their employees.

Workers may benefit from this training, if it leads to more satisfying or remunerative work, either with their current employer or another employer in the future. The workers who received the most benefit from CJG were largely well-educated men who were already employed in skilled occupations and who didn't identify as Indigenous, immigrant, or disabled. Further, the CJG focuses training dollars on workers who are essentially job-ready, thereby disadvantaging Canadians with little prospect of labour-force attachment.

Basically, the Canada Job Grant was a terrible, terrible idea (which is what most practitioners said when Kenney proposed it). Why any province would retain a training program that yields such inequitable results is beyond me.

-- Bob Barnetson

Friday, August 10, 2018

Labour & Pop Culture: In Dubious Battle

This week’s installment of Labour & Pop Culture looks at the novel “In Dubious Battle” by George Steinbeck (1936). This books looks at an agricultural workers strike and follows two communist organizers who orchestrate it. It precedes his better-known works such as Of Mice and Men, The Grapes of Wrath, and Cannery Row. James Franco recently released a film adaptation that was poorly received.

Jim Nolan is a new organizer, being shown the ropes by Mac McLeod. They become fruit pickers and jolly along a strike that is brewing because the owners have cut the fruit pickers wages. A more interesting aspect of the novel is watching Mac teach Jim how to mobilize workers through a combination of education and manipulation.

The owners respond in typical ways, using economic pressure, vigilantes, the police and the state (in the form of health regulations) to undermine the strike. The death of a worker at the hands of a vigilante galvanizes the flagging strike.

The owners then up the ante, by shooing Jim, burning buildings, and kidnapping allies of the strikers. Jim is eventually killed, sacrificing himself for his principles (or perhaps the party). Mac uses Jim’s death to further advance the interests of the workers.

-- Bob Barnetson

Tuesday, August 7, 2018

CFIB stokes employer anger about Alberta WCB premiums

Like most employer lobby groups, the Canadian Federation of Independent Businesses (CFIB) has been resistant to changes to Alberta’s workers’ compensation system. Most recently, they have been trying to whip up anger about workers’ compensation board (WCB) surplus payments for employers.

To understand what is going on, you need a basic understanding of how workers compensation works and how it is funded. Apologies for the length of this explanation--it is complicated.

Employers pay premiums that fund the WCB. In return, they can’t be sued by the workers they maim and kill. Instead, the WCB provides stable, predictable, and immediate compensation to workers (most of the time, anyhow). Workers’ compensation isn’t perfect, but, in aggregate, it is better than the alternative for all parties.

Employer premiums are set based upon the projected cost of injuries each year in each industry or sector (called the industry rate and expressed as $x per $100 of payroll). Some employers can have their premiums raised or lowered based upon their specific claims costs (this is called experience rating).

When setting premiums, the WCB tries to collect enough money from an industry to cover the current and future costs of injuries incurred by that industry in that year. For example, if I get run down on a job site because there weren’t enough workers hired to act as spotters, there will be current-year costs (such as wage-loss and medical aid) plus likely future costs (such as permanent wage loss payments or future medical treatments as my discs degenerate from the injury).

Ensuring that the WCB has collected enough money from this year’s employers to cover this year’s injuries prevents the transfer of claims costs over time. That is to say, if the WCB did not collect enough to cover the future costs of my injury from the current group of employers, then future employers (who likely had nothing to do with my injury) would have to pay premiums to offset those costs (which isn't really fair to the future employers).

The money to pay for injuries is collected in an accident fund. Alberta’s accident fund is about $11 billion. This money is invested and the returns help off-set future claims costs (which will total about $17 billion, all in).

Alberta’s accident fund is considered fully funded when it is between 114% and 128% of projected injury costs. This “over funding” reflects that not every injury or illness that occur in this year will be claimed this year. This is particularly the case with occupational diseases, that often take years to manifest themselves and even longer to be accepted. So having a cushion helps ensure today’s employers pay for the cost of today’s injuries.

When the accident fund is over 128% due to greater than expected investment returns, the WCB’s past practice has been to give the surplus to employers on a pro-rated basis. This has happened in (I think) 9 of the last 13 years. Over the past five years, this has amounted to somewhere around $2 billion in surplus payments. In 2017, the fund was at 127%, so there are no surplus distributions in 2018.

It is important to note that previous surpluses have not been the result of premium overpayments by employers (but rather come from investment income). Indeed, over the last three years, employer premiums have not even covered the cost of injuries and have been supplemented by investment income. The CFIB typically forgets to mention its members are being undercharged for thir workers’ injuries.

The WCB could have chosen to do something else with accident fund surpluses (e.g., improved benefits, addressed long-standing contested claims, paid for better injury prevention efforts). But the WCB has long been captured by employer interests and focuses on keeping the cost of injuring workers as low as possible for employers. So its policy has been to pay out surplus distributions.

During the recent WCB review, the review panel recommended keeping surpluses inside the WCB system and using them for other purposes. Specifically, they said:
Recommendation 44:

Amend the Workers’ Compensation Act to make clear that money in the Accident Fund is in trust for the benefit of workers and employers to support a sustainable workers’ compensation system.

Seen in this context, the current practice of distributing a “surplus” to employers is not appropriate. Under the current practice there is no way to ensure that the distributed money will be used for workers’ compensation purposes. It flows to employers with “no strings attached”. In our Panel’s view, this practice should end, and a more appropriate policy should be designed to address instances where the Accident Fund exceeds the target range established in the WCB Funding Policy. We believe this policy should be established and in place to deal with any “surpluses” that are realized from the 2017 assessment year. (p.116).
The New Democratic government slightly amended section 91(2) of the Workers' Compensation Act to say:
91 (2) The general purpose of the Accident Fund is to support a sustainable workers’ compensation system for the benefit of workers and employers.
But they did not go so far as to prohibit surplus distributions.

The WCB is now proposing a slight amendment to its funding policy (consultation concludes August 13). The gist is that when the accident fund is larger than 128% of expected costs, the surplus get allocated in a couple of ways:
  1. The Board retains the discretion to allocate surpluses as its sees fit.
  2. If premiums were too high, then the premium overage goes back to employers (again, this historically hasn't been the cause of surpluses and premiums have been set too low).
  3. If investment income results in a surplus, the funds are allocated between employers and programs designed to reduce injuries.
Basically, the WCB is making allowance for the possibility that surplus investment returns could be allocated to making workplaces safer, rather than just lining employers’ pockets. Not surprisingly, the CFIB opposes any redirection of WCB surpluses to prevent injuries.

Instead, it says that employers should be trusted to use the rebate to improve safety. In light of recent research on injury rates and employer non-compliance with occupational health and safety laws in Alberta, trusting employers to protect workers is basically a laughable proposal.

Further, the CFIB wants the accident fund surplus distribution threshold set at 110% of projected costs. The result of this will almost certainly be the development of an unfunded liability in the accident fund.

It is a bit weird that a business group would be proposing a fiscally irresponsible policy change—at least until you think it about some more. An unfunded liability caused by the CFIB’s proposal will mean one or more of three things:
  1. Future employers will end up paying for the costs of injuries caused by present-day employers.
  2. Taxpayers will be forced to cover the unfunded liability.
  3. The WCB will be forced to reduce worker benefits.

The CFIB’s proposals make more sense once we see that the CFIB is seeking to externalize the cost of injury from its present members onto other parties (most likely future injured workers and taxpayers).

That is to say, this whole campaign is about reducing the cost of injury to employers by transferring it to workers—either through injuries, crappier injury compensation, and/or higher taxes. For this reason the government and WCB appear to quite rightly be ignoring the CFIB.

-- Bob Barnetson

Friday, August 3, 2018

Labour & Pop Culture: Damnation Ep 1-5

Rainy summer days are a nice time for TV. I have been working my way through the Netflix series Damnation.

The series is set in the rural America in the 1930s (but filmed by Calgary). It follows local preacher (of sorts) Seth who rallies local farmers facing price fixing by local business folks who are in league with the nasty banker.

The series opens with a producers strike, based on the Farmers’ Holiday Association strike of the 1930s. There was also a producers strike in Alberta in the late 1940s. This idea circulated in Alberta again during the debate about Bill 6.

The bad guys then bring in a strike breaker (Creeley) who kills strikers. While this seems a touch dramatic, it is based upon the strike breaking activity of private detective agencies like the Pinkertons (in the story, Creeley is a Pinkerton).

Episode 1 ends when Seth responds by nailing the dead man up to the bank door with the sign “which side are you on?” around his neck. (Which Side Are You On is a 1931 miners’ strike song from Harlan County—which is also (sort of) covered in the series).

Episode 2 features white supremacists and explores how the newspaper aligns itself with the interests of the local business people. Episodes 3-5 explores escalating conflict over farm foreclosures and an effort to split the farmers up to undermine their strike. A lot of people die in this series.

There are three strong female characters in story (a sociopathic strikebreaker, the preacher's radical wife, and a very cagey prostitute), which is nice to see given the tendency of unions of be viewed as “male” organizations and the limited roles of women in the 1930s. I’m hopeful we’ll see more of them in the second half of the series.

I’m pretty keen to finish this series and see how it plays out. There is some larger conspiracy by industrialists at work in the series that I’m keen to see revealed.

-- Bob Barnetson