Newfoundland & Labrador No Longer Only Atlantic "Ghetto"

Nova Scotia is a “low-wage ghetto,” according to the co-author of a report released today.

The report recently co-written by Professor Larry Haiven of Saint Mary’s University in Halifax shows that while productivity has increased over the past 20 years in Nova Scotia wages have lagged behind.

“If workers have been contributing to an overall productivity increase, then what have they gotten out of it? The answer is nothing”, says Professor Haiven.

“Workers are actually making less than they did 20 years ago.”

According to the professor, Nova Scotia has the third highest number of low-paid workers in Canada, behind P.E.I and Newfoundland & Labrador and has the third lowest hourly wage, just a little better than New Brunswick and Newfoundland & Labrador.

The situation has led professor Haiven to label Nova Scotia as a “low-wage ghetto”, a term reminiscent of Globe and Mail columnist Margaret Wente’s attack a short while back when she referred to Newfoundland & Labrador as a “scenic welfare ghetto”.

The report goes on to say that increases in profits over the years are not filtering down to workers but instead are being raked in by the business community. No doubt this is a valid point but the reasoning given in the report, that corporate executives believe workers in Atlantic Canada are somehow less productive, is a little off base.

Having been a part of the work force with a major corporation in Newfoundland & Labrador for many years I’ve had the dubious honor of hearing executives speak of the true reason for not increasing wages and misconceptions over productivity are not a factor. In fact my experience has shown a high level of productivity in the area.

The conversation around compensation usually boils down to one of supply and demand. If someone is working in Newfoundland & Labrador, for example, corporate leadership often feels that since there are few alternatives for that worker to find another competitive job in the region that worker will put up with what they get.

On the other hand, those working for the same company in, let’s say, Alberta, often receive higher wages and larger annual increases than their counterparts in Atlantic Canada doing the same job.

Let’s face it, corporations are in the business of making money. It’s that simple. In that sense it’s hard to blame them for taking advantage of any opportunity to reduce costs and increase profits if they can get away with it. Remember that unemployment levels in Alberta are around 3.5% but better than 13% in Newfoundland and Labrador and more than double Alberta’s rate in the rest of Atlantic Canada.

This isn’t to say I agree with the status quo or condone these acts of corporate greed, quite the opposite, but we might as well face the facts.

The solution to the problem isn’t to attack industry for taking advantage of a situation that exists or to explain it away as a misperception about productivity. The answer is to remove any advantage they believe they have.

As the economy in this area improves through mega-projects, oil and gas developments and other development opportunities, the demand for workers in many fields will increase. It’s up to workers themselves to then pick and choose where they want to work and to walk away from any employer who is not willing to provide them with a reasonable salary and benefits package.

Taking this approach will soon see the tables turn.

Yes, there will be moaning and groaning from the business community but that’s life. We are already beginning to see this happen.

Even with a 13% unemployment rate and with thousands of citizens migrating back and forth to work in Fort MacMurray, there are constant reports of companies in Newfoundland & Labrador complaining that they can’t find enough workers to meet their growing needs or to staff planned future projects.

Too bad! Do something about it.

The management of these companies always follow up on their plea for help by saying that, “of course we can’t compete with wages in Alberta.”

My question is, “Why the hell not?”

The cost of raw materials, jurisdictional tax regimes, etc, being relatively similar across Canada how is it that a company in Alberta, Ontario or for that matter EVERY other jurisdiction right across Canada can offer higher wages than a company in Newfoundland & Labrador?

It’s B.S.

The truth is that they can and will pay more if they want to stay in business.

The reason wages are low is because for years companies have gotten away with it because there were few alternatives for anyone who wanted to work. Those days are quickly coming to an end and if the companies out there whining about a lack of workers don’t solve their own problem by paying a competitive salary then they might as well close up shop, get out of the way and let someone else come in who will.

As angry as Ms. Wente’s, “scenic ghetto” remark made many people in Newfoundland & Labrador feel, including yours truly, there is little doubt the strong wording used by Professor Haiven will have a similar effect in Nova Scotia.

The term used by Professor Haiven about his home province may have been harsh but it begs the question, “What should we call a “Have” province, like Newfoundland & Labrador, that has even lower average wages and a larger number of low-paid workers than a “Have Not” province like Nova Scotia?

Prime Minister Stephen Harper would likely call it a place suffering from a distinct “culture of defeat”. Personally I don’t believe that sort of defeatist attitude ever existed here and I find the current situation disgusting. I also believe it’s one that won’t last much longer.

With new projects planned to come to fruition in Newfoundland & Labrador over the next several years it’s time for any company operating in this region to begin treating local staff in the same way as workers are treated in the rest of Canada. The days of the free ride and of quasi-slave labor are over. Any companies that have become dependent for their survival on that little extra edge they gained by offering low salaries or who simply don’t want to level the playing field won’t last much longer.

On the bright side, for any company management who feel bad about having to close up shop, there is a bright side. With any luck they can find a well paying job out West like they’ve watched so many others do.