Workers fear wage subsidy will help bosses the most

Members of UNITE HERE Local 40

ZAILDA CHAN IS NOT HOLDING HER BREATH. She doesn’t expect the Canada Emergency Wage Subsidy (CEWS) to do much of anything for all the everyday working people she represents.

“I think this is a bailout for businesses,” says  the president of UNITE HERE Local 40 in Vancouver, “because ultimately the bosses have all the power. They’ll have the power of whether or not to bring people back to work at all and how many people to bring back.”

Bosses benefit more than workers

CEWS will offer three months of subsidies of up to 75% of employee wages to all employers that expect a 30% drop in revenues due to the coronavirus shutdown. In return, employers must not layoff any workers during the time they receive the subsidy.

Businesses receiving this support won’t be obliged to top up employee pay to 100% of their pre-layoff level. This means employers could receive more from the government than they suffer with a 30% revenue decline.

In effect the federal government is offering to become paymaster for a large segment of the private sector for three months. This would amount to socializing the cost of running a business, but not sharing any of the business profits.

Chan says: “I’m concerned whether employers will even bring back their employees with this subsidy, or if they’ll stay closed instead because that would be cheaper for them. It might be more sustainable for them to not open their doors.”

What about workers already laid off?

Another gaping flaw with the wage subsidy is that it only goes to workers who have a job. Hundreds of thousands of workers in the hospitality, entertainment, and tourist sectors have been laid off already. Chan points out close to 90% of her members are now out of work. To say nothing of all those left without work  in the so-called gig economy.

“The government is being a little bit timid in making bold moves and really coming through for workers,” says Chan.

Instead of handing taxpayers’ money to the bosses, UNITE HERE says the government should pay an 80% wage replacement directly to workers. And that should include the money made through tips, which is a crucial source of earnings in the hospitality sector.

Giving the money directly to workers would remove the risk of the subsidy being abused, says Chan.

Union calls for more clarity

In addition to securing adequate financial support for workers out of a job, UNITE HERE also wants more clarity from federal and provincial governments on what union members who are still working may be expected to do. Of particular concern is a plan being floated that would use empty hotels in B.C. and Ontario to take in hospital patients with low care needs, so that the wards can be reserved for coronavirus cases.

UNITE HERE Toronto president Guled Warsame says union members are ready to assist, but more cooperation will be needed. “We support any effort that leads to curbing the spread of the virus,” says Warsame, with the understanding that  “hotel and food service workers must be free to choose to work in such conditions, and if they choose so they must receive training, protective equipment and fair compensation.”

Solidarity fund

In the absence of sufficient support from the government, UNITE HERE Local 40 has launched a BC Hospitality Workers Relief Fund to help support the close to 90% of its members currently out of work. The Local 40 members still working serving the traveling public are putting their health at risk, but not working enough hours to cover basic needs. It could take weeks before any of them get their first EI cheque or the new CERB.

You can find out more about the Solidarity Fund here

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