Canada's Growth Industry: Sweatshops

A "bad boss" hotline that was recently set up at a legal clinic in the low-income community of Parkdale in Toronto has fielded hundreds of telephone calls from desperate workers who want to talk about unpaid wages, below minimum wage pay, lack of overtime pay and unjust termination of employment. Eighty percent of the inquiries involve the arbitrary reduction of workers' hours and abusive employers.

"Our clients reflect the community we work with," she says. "They come from the many employment sectors which are characterized by low wages and poor working conditions: manufacturing, such as garments and textiles; warehouses; food services; cleaning; clerical work, including office work with temporary agencies; telemarketers; retail workers; domestic workers; and home workers."

"A large proportion of our clients are women and visible-minority workers," Sax adds.

According Alex Dagg, manager for the Ontario district council of the Union of Needle Trades, Industrial and Textile Employees (UNITE), many employees are too scared to take their complaints to the Ontario Ministry of Labor.

Under the province's current Conservative government, resources for enforcement of laws have been reduced, she adds.

Sweatshops thrive among companies "where labor involves a large part of the employer's cost, and his competition is based on price, not the quality of the product," says Charlotte Yates, associate professor in labor studies at McMaster University in nearby Hamilton.

And while legislation covering employment standards requires much updating in a changing economy, it is still the only protection available for non-union workers from arbitrary employers, she adds. One-third of the Canadian labor force is unionized. Conditions that parallel working conditions in the maquiladoras and other low-wage export zones in Latin American and Asia exist in the Toronto garment industry, says UNITE's Alex Dagg.

Twenty years ago, about 80 percent of the garment workers in Canada were unionized, but that has plummeted to about 20 percent, following a period of economic restructuring and the departure of companies for southern countries with cheaper labor and lax employment regulations.

Yet the garment sector continues to thrive, with half of the clothes worn by Canadians still manufactured in their home country. The industry is largely made up of small suppliers on contract to major clothing labels. Many of the workers are immigrant women who spend upwards of 12 hours a day with no overtime pay, sewing garments at 4.50 Canadian dollars an hour (roughly $6.20), or about 65 percent of the legal minimum wage, reports Dagg.

Dagg says she has heard accounts of garment workers who were forced to work for free on Saturdays or during the first month of their job. Also, many of the clothing contractors are "fly-by-night outfits," which constantly change their names and are sometimes unreliable in terms of paying their workers on time, she adds.

While there is much anecdotal evidence of an increase in sweatshops in the Canadian labor market, statistics reflecting this rise are difficult to pin down, says Grant Schellenberg, a research associate with the Canadian Council on Social Development (CCSD). "A lot of it is not captured in official surveys. It is really part of an underground economy."

Nevertheless, it is clear that temporary or contract work, much of it of an insecure nature, is on the increase in Canada, as in other northern countries, according to the CCSD. One in 10 Canadians is part of what social scientists call the contingent workforce.

As Joe Smith (not his real name) has found, even secure workers can end up in sweatshop conditions. Smith, a professional typographer who lost his job at the University of Toronto after 15 years, finally landed on his feet, after a year of "unemployment," at an advertising agency. Unfortunately, he was only paid when the assignments arrived at his computer. The rest of the time, he sat unpaid at his desk, waiting for work.

But in a country suffering from persistent unemployment of 9.0 to 10 percent, it is difficult for people like Smith to be fussy about the work they do. He is now with a graphics house, which has a steady business in corporate annual reports. The only drawback is that during the busy season, he and his colleagues are obliged to work seven days a week to meet some deadlines. But his checks now include overtime pay.

Don Young, a community development consultant in Toronto, says that Canadians "are attempting to compete with the maquiladoras or the Brazils of the world (when) we should be trying to compete with the Swedens and make products that people can be proud of having made and that are worth buying."