COVER

Tolerating zero

Freezes and rollbacks hit the salaries of Canadian workers

JOHN DALY May 9 1994
COVER

Tolerating zero

Freezes and rollbacks hit the salaries of Canadian workers

JOHN DALY May 9 1994

Tolerating zero

COVER

Freezes and rollbacks hit the salaries of Canadian workers

JOHN DALY

Derrick and Dolores Steven belong to a union that may have set a trend for tens of thousands of other Canadian wage-earners—but as far as the Stevens are concerned, it is a bad one. The couple were two of the 7,000 members of the United Food and Commercial Workers Union employed at Miracle Food Mart supermarkets in Ontario who returned to work in February after a bitter three-month strike. Their spoils from that battle: a $1.75-anhour wage cut. Derrick, 33, earns $16.67 an hour, or just over $35,000 a year, as a night foreman at a Miracle store in Toronto. Dolores, 31, earns $11.71 as a scanning co-ordinator at another Miracle supermarket—making sure that prices of items on the shelf match those in the store’s computer system. Derrick does not mince words when describing the contract. “I think it sucked,” he said. But the couple bought a house two years ago and are expecting their first child in October.

And while the Stevens and many other Miracle employees were upset about the agreement, 75 per cent of the members voted in favor of returning to work. “Half the people couldn’t afford to stay out,”

Derrick Steven said. “We know times are tough,” he added. “The company took advantage of that.”

The Stevens’ situation is becoming more common every day.

Although Statistics Canada officially declared the recession over in January, 1993, and employment is on the rise, few Canadians have seen much evidence of a recovery yet in their paycheques. On the contrary, according to the federal ministry of human resources, the average annual wage increases in union contract settlements have declined from 3.1 per cent in 1991, to 0.7 per cent last year, to 0 per cent in February—the lowest since Ottawa began collecting such data in 1978. The February figure was bolstered by a 0.4-percent average yearly increase in public sector settlements. In private sector contracts, the average was a 0.3-per-cent wage reduction. And most experts forecast that the meagre increases—and rollbacks—will continue.

In a survey of 425 large employers released last month, the Toronto-based consulting firm William Mercer Ltd. forecast

that wage increases would average 2.6 per cent this year. The annual inflation rate, not counting tax increases or cigarette price reductions, is still about 1.5 per cent. Mercer consultant Keri Humber said that, “If you’re getting less than a 2-per-cent increase, you’re falling behind.”

So far, one of the the strongest forces hold-

ing down incomes across the country is the spread of wage freezes in the public sector. While they acknowledge that governments are strapped for cash, many civil servants feel that they have been singled out unfairly. In Saskatoon, the city’s chief librarian, Sandra Anderson, says that her budget, including the salaries of the library system’s 300 employees, has been frozen for the past three years. She said that that is particularly frustrating for library staff because they are all working harder to handle a 50-percent increase in lending activity since the beginning of the recession.

But the fallout from the wage freezes and rollbacks by both governments and large private employers is spreading. Like many other Canadians who work in retail and service jobs, Marjorie Babin, a 39-year-old hair stylist in Lower Sackville, N.S., says that her customers have less to spend than they used to, and that, in turn, has put a dent in her family’s earnings. Babin works in the 3’s Company hair salon in a shopping mall in Lower Sackville, 20 km north of Halifax. Her husband, Roy, is an auto mechanic, and the couple have three children. Although Babin declines to disclose the couple’s combined income, she says that it has declined a little in recent years, and she explains why. Her salon charges $23.95 for women’s haircuts, and $17.75 for men’s, the same as it has for the past two years. Even before that, Babin says that her customers began cutting back on “the frills,” such as perms and color highlighting. Her husband has suffered through a similar slowdown in his business. “Meanwhile, our bills have increased, our taxes have increased,” Babin said.

Despite the dwindling purchasing power of their paycheques, Babin says that most of her customers who are working are happy just to have a job—and so is she. “Employers down here are saying they’ll cut wages or else they’ll get rid of employees,” Babin said. In other regions and sectors of the economy, the story is similar. And until the recovery kicks into higher gear, most Canadians appear to be in no mood to press their luck by demanding more.