A groundbreaking new study from Statistics Canada has confirmed what many feared: The hollowing out of Canada’s manufacturing sector is taking a big chunk out of workers’ paycheques.
Wages for men were hit particularly hard, especially in cities that bore the brunt of the decline in manufacturing jobs, such as Toronto, Oshawa and Windsor. Between 2000 and 2015, men’s wages were flat or in decline in those cities, even as wages for men across Canada rose by an average of 13 per cent.
The study found minimal effect on women’s wages, with some experts suggesting that was because the manufacturing industry has traditionally been dominated by men.
“This quantifies what everyone felt was true,” said Sheila Block, an economist at the Canadian Centre for Policy Alternatives.
In the Toronto census metropolitan area (CMA), manufacturing’s share of the workforce fell 6.8 per cent from 2000 to 2015. In Oshawa, the drop was 9.8 per cent. In both cities during the same period, men’s average earnings were flat.
In Windsor, which has seen the loss of thousands of jobs in the automotive sector, average men’s wages plummeted by 14 per cent during that period.
In Chatham-Kent, hit by the closure of a Navistar plant in 2002, average men’s wages fell by 10 per cent. (The Toronto CMA includes most of the Greater Toronto Area, with the notable exception of Oshawa).
It isn’t just people in the manufacturing sector who suffer when those jobs are lost, said Stephanie Ross, director of McMaster University’s School of Labour Studies.
“Anyone who lives in a community where manufacturing has been important has seen this happen with their own eyes. You can see the impact on the local economy, on other businesses,” said Ross.
Jerry Dias, head of Unifor, the country’s largest private sector union, put it even more bluntly.
“You can’t have a strong economy without a strong manufacturing sector. Period. It’s crystal clear,” said Dias. (Unifor represents editorial employees at the Star.)
Dias blames international trade deals for much of the decline in manufacturing jobs.
“We’ve had a succession of governments who couldn’t bargain their way out of a paper bag when it comes to trade deals, and this is a direct result of that. We used to be number four in the world when it comes to assembling cars. Now we’re number 12. The market’s still strong. People haven’t stopped buying cars,” Dias said.
Wages also tend to fall for non-manufacturing jobs when factories close, added the CCPA’s Block.
“If a person has a choice between a well-paying job in a factory and something else, other employers have to keep up, or they won’t be able to hire anybody. Good manufacturing wages lift what other people get paid, too. Without that upward pressure, wages will fall,” Block said. That, in turn, increases the disparity between people at the top of the income scale, and those further down.
“This is an important piece of the puzzle when it comes to increasing income inequality. This isn’t affecting your wages if you’re a lawyer on Bay Street,” said Block.
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Training and education for people who lose their jobs after 20 years in the same sector is important, but it won’t solve the problem of too many people seeking too few jobs, said McMaster’s Ross.
“Individual training doesn’t do much if there are no jobs to go into. If there are hundreds of people going for a handful of jobs, it doesn’t matter how much training and education you get. And that’s the situation people are facing,” Ross said.