In a meeting won by actions at the ACORN Canada convention six weeks ago with top officials of the Finance Ministry our negotiators efforts to discuss the need [...]]]> New Orleans ACORN International’s global Remittance Justice Campaign (www.remittancejustice.og) continues to confront new, amazing, and mysterious challenges as ACORN Canada pushes forward in Ottawa and British Columbia.

In a meeting won by actions at the ACORN Canada convention six weeks ago with top officials of the Finance Ministry our negotiators efforts to discuss the need for regulation of remittances to prevent predatory pricing and achieve needed equity, transparency, and fundamental fairness was greeted about the same way as if we had started cursing loudly at the front of the church.  We had offended fundamental, conservative Stephen Harper government dogma about so-called “free markets” and laissez faire rapacious capitalism by banks and money transfer organizations, especially if the rip-off occurred with migrant workers and immigrant, “new Canadians” as they are called.

The Finance Ministry turned the conversation to “disclosures” in a patty cake, kiss-your-cousin shot across the ACORN bow.  Disclosures just won’t get it done, but….  There are some critical things that could be achieved by some real disclosures that include:

• simple language
• base rate from remitting institution to country for bank customer
• base rate from remitting institution to country for non-bank customer
• transparent fees at receiving end if any or a guarantee that there are none.
• disclosure of exchange rate at time of remittance transfer
• disclosure of pricing regime compared other electronic transfer procedures to prove this is not discriminatory pricing

We might save billions just by letting that little light shine.

On the western side of Canada an action by ACORN British Columbia demanding remittance justice provoked an email response from Englwood, Colorado, a Denver suburb, and headquarters of Western Union.  Spokesman there told the Burnaby News-Leader:

“’Many people worldwide have no access to formal financial services. We invest in rural areas and urban locations alike to offer consumers an option to send and receive remittances and better manage their finances.’  Increased consumer choices for sending money have led to lower costs across the industry, the company said.”

Wow!  Here is what that statement translates to in normal everyday English:

“We enjoy near monopoly advantages in many global markets because there are no other financial service alternatives, so we charge whatever we damned well please to send and receive remittances, because we can.  The only reason we will lower costs is if a competitor crowds into our monopoly market and forces us to have to do so.”

At ACORN I guess Western Union thought it was important to remind us that with no regulations and little competition, rapacious corporate greed can pretty much stand on its hind legs and flip off its customers, their organizations, and entire limp wristed, uncaring governments at their whim and will.  Hello!

New Orleans Yesterday on the ACORN International website (www.acorninternational.org), we released the third of our investigative, research reports in connection with our Remittance Justice Campaign.  The bottom line is that the amounts of informal transfers are huge and underestimated.  They are wildly cheaper by many orders of magnitude (0.25% to 1.25% compared to World [...]]]>

New Orleans Yesterday on the ACORN International website (www.acorninternational.org), we released the third of our investigative, research reports in connection with our Remittance Justice Campaign.  The bottom line is that the amounts of informal transfers are huge and underestimated.  They are wildly cheaper by many orders of magnitude (0.25% to 1.25% compared to World Bank 10% and our earlier survey of 22%).  They are most unregulated because the system often lacks a paper trail, also allowing easy access for money laundering and terrorism.

The hawala system proves that money can be transferred cheaply and efficiently between immigrant families and migrant workers back home.  This failure of regulation is predatory and dangerous.  We argue the case for reform and demand change.  See the whole report below:

VOTING WITH THEIR MONEY IN A RIGGED ELECTION[1]

The Demand for Alternative Mechanisms for Remittance Transfers from Immigrant Families and Migrant Workers

Campaign for Remittance Justice Update

In December of 2010, ACORN International’s opening report of the remittance campaign, Past Time for Remittance Justice, exposed the trials and tribulations of migrants around the world who pay exorbitantly high fees to send small amounts of their hard-earned money back to their home countries to support their families. The message was clear: the high costs charged by money transfer organizations were predatory and no one was taking the plight of the remitting migrant worker seriously. When ACORN International’s second report, Looking the Other Way: The Absence of Remittance Regulation, was made public, sadly not much had changed.

Our calls for regulation and doing away with exorbitant fees are only being seriously engaged at the provincial and federal levels in Canada, and even there the response remains grossly inadequate.  Elsewhere in the world, the financial community, aided and abetted by the responsible national banking authorities and their global counterparts, continues to ignore this scandal.  This is easy for them to do. This is a crisis for poor people, immigrants, and migrants, not a crisis for bankers and governments. In other words, regardless of their responsibilities to protect and serve, the people in a position to remedy the situation have no interest and are feeling no pain.

In both of these reports, ACORN noted that alternatives to formal restraint or regulation of fees and predatory practices were being sought every day by victims of the system, and in the absence of real progress, people would be voting with their money for different systems throughout the world.  Change will come here.  The party will not last forever.

Informal Money Transfer Systems

Today the largest informal money transfer system is likely “hawala.”  ‘Hawala’ is a term that is regionally-specific to the Middle East, but similar systems exist elsewhere under different names (such as ‘hundi’ in Pakistan and India and ‘fei ch’ien’ in China). Together they all fall under the technical, World Bank-like title of ‘Informal Money Transfer Systems’ (IMTS). Since hawala is the most popular IMTS, and the one that has gotten the most publicity, this report will refer to IMTS as ‘hawala’ with the understanding that it is interchangeable with other regional-specific versions.

Before discussing more about the size, scope and importance of hawala, we will examine more closely how hawala works using the following example:
A migrant worker in country A wishes to send money home to his family in country B. He has no bank account and is not an excellent speaker of country A’s language thus he finds dealing with any bureaucracy extremely intimidating. In his local ethnic paper, written in his own language (and perhaps even own dialect if he’s lucky), he finds an advertisement for cheap money transfers back to country B through a small local business. The worker goes and meets hawaladar A, the owner of that business, to whom he gives $150 to send to his family. Hawaladar A is an importer of handicrafts from country B and thus he has many business contacts there, one of which will be referred to as hawaladar B. After receiving the migrant worker’s money, charging him a commission between .25% and 1.25% and giving him an ID number that can be used to pick up money in country B, hawaladar A rings up hawaladar B and informs him of the transaction. Within 24 hours the migrant worker’s family can go to hawaladar B in country B and pick up the amount transferred by the worker.
What is important to note is that this entire transaction has taken place without any physical movement of funds. The only debt that exists is the one between the two hawaladars. Sometimes this debt will be settled via a formal bank transfer or perhaps hawaladar B owes hawaladar A money and this is a settling of that debt. More likely, however, both hawaladars are in an import-export relationship and by over/under invoicing for goods shipped between countries they can settle their debts through manipulation of their balance sheets.

We could substitute a thousand other examples from neighbours to personal business acquaintances or family friends and relatives. This example highlights many of the attractive features of IMTS; It’s cheaper, faster, and often more accessible than formal systems which the World Bank claims cost an average 10% worldwide (as compared to .25%-1.25% of the informal sector and the over 20% found through ACORN International’s own surveys), and it often takes several days for transactions to go through.[2] However, it is also very important to note that no paper trail is left and the balance-book manipulation makes the transaction untraceable and therefore illegal in many countries, including India where it is widely used.

So How Important is the Informal Sector Anyway?

In Past Time for Remittance Justice, ACORN International estimated that if quantified, volumes of money going through hawala (and other equivalent informal money transfer systems around the world) may add 20-40% to the value of worldwide remittances. Having looked further into informal money transfer systems, we now have reason to believe that this amount may be much larger. Official figures, such as those referenced by national governments and the World Bank among others, do not take informal money transfers into account when quantifying remittances. Even academic attempts to measure the size of hawala (and other equivalent mechanisms) admit that the best that can be done is to simulate rather than estimate. From our example above it becomes very clear why such difficulties exist. The most reliable estimation that our research has come across is a 2002 estimate of the United Nations Department of Economic and Social Affairs (DESA) that $100-$300 billion flow through Informal Money Transfer Systems each year.[3] In 2010, the World Bank estimated that global remittance flows would reach $440 billion by the end of the year, $325 billion of that going to developing countries.[4] If both of these estimates are valid then the importance of the informal sector is much greater than we had anticipated. Rather than 20-40% of formal remittance figures, it could be anywhere from 25-75%.

$440 billion in remittances and transfers is a huge amount, but the importance of this figure is dwarfed by something that the banking authorities and others are missing. When we take estimates of informal remittance flows into account, the real values of remittances worldwide can be conservatively calculated to be at least $550 billion and more aggressively to be $770 billion. When we apply the .25%-1.25% range of fees charged by the informal sector, the $44 billion in fees paid on remittances, using the 10% figure used by the World Bank as a global average, increases as well. At the lower fee level of .25% the range in additional money is anywhere from $275 million to $825 million. At the higher level of 1.25% this range increases to be $1.4 billion to $4.4 billion. We can now see that by quantifying informal remittances and their additional costs, the $44 billion could be increased by up to 10% and we start knocking at the door of $50 billion in fees collected for various forms of transfers.

A senior economist in the World Bank, when fielding our queries on informal remittances, admitted that he was not able to come up with a ballpark figure though he suspected that numbers had decreased since 2003, largely due to impacts of the recession. Regardless, he maintained that informal flows were still significant and categorically confirmed that hawala and other informal systems are not included in any of the World Bank estimates on remittances which are the gold standard in this area of inquiry.  While it may be impossible to accurately measure the use of informal money transfer systems, one thing is extremely clear: the informal sector is an extremely popular way to send money around the globe.

Security Concerns

The same characteristics that make hawala and other IMTS attractive to migrants looking for a quick, easy and cheap alternative to formal Money Transfer Organizations have also been flagged as conducive to money laundering and terrorism financing. In the wake of September 11^th, IMTS, especially hawala due to its Middle Eastern origin, were considered security threats. Most of the literature on hawala is from this period where international bodies and national governments sought to work together to combat such threats through the attempted regulation of hawala.[5] However, as the United Nations DESA points out, while hawala is an attractive medium for illegal transactions, it is also extremely important to many migrants around the globe who are using it for perfectly legal means.[6] For this reason it is important that any attempts to combat terrorism and crime through the hawala system take the importance of legal activities carried out through the hawala system into account.  Paradoxically, the global and developed world concerns for increased security in these times has not tempted them to trifle with the more than $40 billion in transfer fees in the formal section in order to compete with the hawala system or create a more efficient system for immigrants, migrants and others.

The anonymity and absence of a paper trail that are hallmarks of the hawala system are enough to cause great concern to national security. It is also enough for ACORN International to remain wary, despite all the benefits the hawala system presents to migrant workers. Just as we can never quantify the volumes of remittances that flow through these informal channels, we will never be able to know when, and how often, the system breaks down to the misfortune of migrant workers and their families. Even though anecdotal evidence leads us to believe that hawaladars are typically honest, since their customers would “vote with their feet” presumably, with any system as opaque and off-the-record as hawala, one must always remain vigilant.

It is here that ACORN International and national security workers find common ground: the desire to bring hawala and similar systems into the open.  Given the World Bank’s only argument for reducing the fees to G8 targeted 5% by 2014 is “competition,” moving the informal system towards the formal would finally introduce real competition rather than the nodding and yawning between banks and MTOs that exists now.  In a joint World Bank-IMF paper, the recommendation was made that hawala operations existing parallel to the formal remittance channels be brought into light ‘without altering their specific nature’.[7] This paper cannot ignore one of the most important points about hawala: it is an extremely attractive and efficient option for remitting money!

Glimmers of Hope

One country that has had great success in formalizing remittances is the Philippines. Their official remittance figures show $3 billion having been remitted in January and February of this year (2011) alone. This is a 6.2% increase from the same period last year.[8] Following from the discussion above, official statistics do not necessarily reflect the total flow of remittances into a country due to the non-quantifiable nature of informal remittances. The increases seen in the Philippines have been greatly influenced by their pro-remittance policies. ACORN International has found that the Philippine government now trains migrant workers in the smartest ways to send remittances home before they leave the country for work. The Banker’s Association of the Philippines has even encouraged banks to innovate and replicate the advantages of the informal sector. One company, SwiftCash (UK) in cooperation with a Philippine bank has offered another incentive not to use informal channels by using the receipt from the transaction to enter the customer in a raffle where a multitude of prizes can  be won ranging from a sack of rice to medical services (For an example visit: http://www.suremoney.swift-cash.com/promo-mmp.php).

Bringing the informal money transfer systems into the light is advantageous for many:

• Migrants will enjoy greater transparency and protection through the documentation of their transactions;
• National Security Workers will be able to target illicit operations occurring in the informal sector without the worry of severely damaging the financial life-lines migrant workers send to their families;
• Governments of the remittance receiving country will benefit from the knowledge of the true capital flows in their economies and thus will better be able to construct economic policy.

Learning Lessons

While hawala operations often occur illegally and without documentation, we can learn from them how to best serve migrant workers and immigrant families. Perhaps the biggest lesson to be learned from hawaladars is that overhead costs to send remittances need not be large at all as ACORN International has consistently argued.  The reason why a hawaladar can charge only .25%-1.25% to send a remittance is because it does not cost much to carry out the transaction! Many banks have high overhead costs (for example, heavy-duty safes, large, expensive buildings and highly trained and paid staff), but all a hawaladar needs is some form of communication (often a telephone). He or she doesn’t even need an official location for hawala as many hawaladars are already business owners with small shops.  If your average small business owner can operate a small scale remittance business and charge less than 2% in fees then it further drives the point home that it is completely indefensible for organizations that enjoy economies of scope and scale to charge fees that are much higher.

Logically in a computerized and electronic world, the same hawala principle of cash received in one place and cash turned over in another would work easily within different branches of the same bank, different offices of Western Union, MoneyGram, and other MTOs, and even between banks in the developed world and their correspondent banks in the developing world.  In fact for all we know similar adjustments may be already happening between a Citibank and a Banamex for example and simply adjusted with real dollars or pesos on a quarterly or annual basis and done as entries on accounting ledgers at other times.

Recently for example, ACORN International’s own US-based bank ran a test run on its international transfer system and inadvertently used our “live” account number and moved unimaginable (to us!) sums between our account supposedly and our payees.  The bank was apologetic of course, since it was their error, and furthermore they needed our help to potentially recover their money.  In difficult cases like those in India and Kenya, they sent electron “messages,” as our banker described it to the recipient bank where our payee had an account saying that the XX amount was mistakenly sent, and asking for it to be routinely transferred back.  We all fretted for a day or two, and our bank was less than thrilled with how quickly their correspondent bank was able to assist them when it seemed to be taking too long in Nairobi, but it worked out well for our bank, no harm, no foul.  We cannot have a hawala system for banks managed digitally and electronically, and a paper, cash, hope and a prayer system for immigrant families and migrant workers, but that is exactly what “look the other way” national banking regulators and “everything my way” financial institutions are maintaining today.

Other Alternatives to Money Transfer Organizations

Besides hawala, ACORN International has identified several other methods that can be used to remit money abroad and avoid the predatory money transfer organizations.

If the migrant worker has a bank account, he or she may be able to send an extra debit card to his/her family that can be used at any ATM to access the bank account from anywhere in the world. However, this is not a satisfactory scalable solution because many migrants do not have bank accounts. Even if they do, the ATM withdrawal fee (which can be several US dollars) and exchange rate used by the banks will greatly diminish the value of the funds that will actually be available to the family. Not all banks will agree to provide an extra ATM or debit card and thus this solution only works for a small percentage of migrants.

If a bank does not allow one to obtain an extra card then services such as Ikobo (www.ikobo.com) that enable you to send a Visa pre-paid card to your family can be used instead of a debit or ATM card from your bank. However, there is a $500 daily limit on withdrawals and each time you withdraw there is a $2.25 ATM fee charged. You also have to physically send the card to your family which represents yet another cost.

Services such as PayPal have also been cited as good ways to send money over the internet across borders. However, the problems with PayPal include the cumbersome nature of its operation (ACORN International staff still don’t completely understand the ins and outs of it, and we use it!) and the necessity of having either a bank account or a credit card. To compound the problems of using PayPal, a recent study has shown that migrant workers tend not to have the level of technological literacy necessary to utilise such tools.[9] Add all of these problems to the well publicized capriciousness involved in PayPal opening and closing accounts, and even though the company estimates it may move $3 billion by the end of 2012, this service is not ready for prime time for migrants and immigrants yet.

And the Campaign Pushes On…

Overall, while there are formal alternatives to Money Transfer Organizations, none of them really fit the needs of migrant workers.

It is obvious to us that the potential for low-cost, accessible solutions are available, but up to now the formal sector obviously has not felt the need to develop them (and with charges on global remittances exceeding $44 billion USD it is easy to see why they face no pressure to feel otherwise!)

We have seen both the formal and informal alternatives to using banks and Money Transfer Organizations to remit money and our argument remains strong: The only true solution today is regulation and cost cutting. We have seen that both are possible and there is no defensible reason to continue brushing the plight of the migrant worker aside.

There can no longer be any doubts about the importance of remittances worldwide and the severe injustices that migrant workers face every time they attempt to send their hard-earned money home to their families. With this report we have repeated the irrefutable case that costs do not have to be as high as they are. All the pieces of the puzzle are exist to create a better alternative for immigrant families and migrant workers and their families.

ACORN International is committed and determined to put these pieces together.  It is past time for the world financial community and governmental banking systems to join us!

[2] World Bank Global Remittances Working Group (http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/282044-1257537401267/RomeConferenceRemittances.RathaAndCirasino.pdf)

[3] United Nations Department of Economic and Social Affairs (http://www.un.org/esa/desa/papers/2002/esa02dp26.pdf)

[4] World Bank (http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22757744~pagePK:64257043~piPK:437376~theSitePK:4607,00.html)

[5] Interpol (http://www.interpol.int/Public/FinancialCrime/MoneyLaundering/Hawala/default.asp);
Financial Action Task Force (http://www.fatf-gafi.org/dataoecd/16/8/35003256.pdf) and (http://www.fatf-gafi.org/dataoecd/32/15/34255005.pdf);
US Department of Justice (http://www.ncjrs.gov/pdffiles1/nij/grants/208301.pdf);
West African Institute for Financial and Economic Management (WAIFEM) (http://www.waifem-cbp.org/v2/dloads/INHERENT%20RISK%20IN%20GLOBAL%20REMITTANCES.pdf)

[6] World Bank (http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22757744~pagePK:64257043~piPK:437376~theSitePK:4607,00.html)

[7] Joint World Bank – IMF Commissioned Paper (http://johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf)

[8]The Philippine Star (http://www.philstar.com/Article.aspx?articleId=676699&publicationSubCategoryId=200)

[9] Orozco, Burgess and Ascoli, 2010 http://www.thedialogue.org/PublicationFiles/a%20match%20in%20migrants%20remittances%20and%20technology%20MO_FINAL_11.4.101.pdf

Sean McKenny, President of the Ottawa District Labour Council, [...]]]> Ottawa The members listened intently and applauded frequently as they were addressed by friends from the Canadian labor movement.  Unfortunately what they were hearing was less a Canadian problem than part of an orchestrated international attack by governments and corporations on basic employment standards and unions.

Sean McKenny, President of the Ottawa District Labour Council, and Chris Robert, Senior Researcher for the Canadian Labour Congress, were both vivid in describing the real issues behind the settlement of the Air Canada strike with the Canadian Auto Workers over the weekend.  For the government to move within 16 hours of the strike was little more than a signal that the new Harper majority administration was fired up for a power play with a slap shot at labor.  Clearly the economy was not endangered.  Furthermore, a lot of the issue was about pensions, particularly defined benefit pensions which are essentially deferred compensation, and the company’s effort to run from that responsibility and put retirements at risk without paying for the risks.  The same thing is happening throughout North America and many other parts of the globe.

Lynn Beu, a vice-president with the Canadian Union of Postal Workers (CUPW) showed up and let people know that essentially the lockout imposed by the Postal Service was the same kind of thing.  The excuse for the lockout was a 23 person called strike!  Lynn had the crowd going as well when she talked about the partnership already being forged between CUPW, ACORN Canada, and ACORN International in the Remittance Justice Campaign and the fact that they had circulated the original ACORN International report to unions all over the world.  Why shouldn’t the postal service be offering a cheaper alternative, she asked?  Absolutely, the members agreed!  In talking about her enthusiasm for the New West and Ottawa living wage campaigns, she mentioned that when she had first heard about it, she had thought, “Living wages…what could be better than that?”  It sounded like a new slogan for the campaign to me.

Later in the evening, the executive vice-president for the Ontario Labour Federation repeated the same themes.  Her best line was:  “When labor and ACORN Canada stick together, we can’t be stopped!”

Hard times but good friends.

Toronto Erik Eckholm summarized the Census Bureau’s report in a clear but painful way:

“With the country in its worst economic crisis since the Great Depression, four million additional Americans found themselves in poverty in 2009, with the total reaching 44 million, or one in seven residents. Millions more were surviving only because [...]]]>

couch surfing

Toronto Erik Eckholm summarized the Census Bureau’s report in a clear but painful way:

“With the country in its worst economic crisis since the Great Depression, four million additional Americans found themselves in poverty in 2009, with the total reaching 44 million, or one in seven residents. Millions more were surviving only because of expanded unemployment insurance and other assistance.

And the numbers could have climbed higher: One way embattled Americans have gotten by is sharing homes with siblings, parents or even nonrelatives, sometimes resulting in overused couches and frayed nerves but holding down the rise in the national poverty rate, according to the report.

The share of residents in poverty climbed to 14.3 percent in 2009, the highest level recorded since 1994. The rise was steepest for children, with one in five affected, the bureau said.”

His story leading the Times was not an editorial, but it could have been.  It would have been easy to point out that we now have almost twice as many people in poverty as we have as union members.  It may be that “millions were surviving…only because of expanded unemployment insurance and other assistance,” but it was only short weeks ago that the extension for exactly that “expanded unemployment insurance” was won from a recalcitrant Congress and the “party of no.”

He could have mentioned that that the “highest level” of poverty since 1994 has now wiped out the gains of almost 20 years, but as he could have pointed out in his paragraph about “couch surfing” the obliteration of home ownership and citizen wealth increases for African-Americans, Hispanics, and other low income families with more to come.

In fact just reflect on this for a minute.  The United States Census Bureau is now citing personal charity, the willingness of millions of families to take in relatives, friends, neighbors, children and others into their homes as a key factor in why the numbers of the poor only climbed by 4 million rather than 6 or 8 million!  For all of the headlines from the big donors and back patting in Washington, a huge factor holding people together so that they can “survive” is still the good will of others, likely other low and moderate income families, willing to share at the edge of the abyss.

Hope may not be a plan, but such help now seems to be a public policy!

The results in Canada are moving this way as well.  The Globe and Mail report on paycheck surveys including a similarly telling several sentences:

“Younger workers are having the greatest trouble meeting their current expenses, with two thirds of those aged 18-34 saying it would be very difficult, difficult or somewhat difficult for them to meet their current financial obligations if they missed even one paycheque.

Among households, the situation is most precarious for single parents, with three quarters saying they would have some trouble making ends meet if their pay were delayed.”

Had enough bad news yet?  All of the reports on 2009 are clear that 2010 will be the same, if not worse.  Foreclosures will rise putting more pressure on even the roofs over the loaned couches for so many.

And, there is no belief that help is on the way.

SEIU Canada

Toronto Sharing the pain is taking on a new meaning in Ontario, Canada’s biggest province, where there are 1 million public employees now enduring a proposed 2-year wage freeze as part of the Liberal party government anti-recessionary measures, and recently the Finance Minister publically agreed that some of these same wage controls should [...]]]>

SEIU Canada

Toronto Sharing the pain is taking on a new meaning in Ontario, Canada’s biggest province, where there are 1 million public employees now enduring a proposed 2-year wage freeze as part of the Liberal party government anti-recessionary measures, and recently the Finance Minister publically agreed that some of these same wage controls should extend to the private sector, specifically the for profit health and nursing companies that are reimbursed by the government for care.

Union leaders representing tens of thousands of private sector health care workers, like Jacob Leibovitch of SEIU Canada and Ken Lewenza, head of the Canadian Auto Workers (CAW) have jumped into the mess arguing that the pill would have to be swallowed at the top not just at the bottom.  CAW argues that private companies should be exempted, but when all of the dollars come from public reimbursements it’s hard to argue very long that private companies “should not be part of public policy,” as Lewenza told the Globe and Mail last month.  SEIU’s Leibovitch seems to be beating the drum more clearly that the private companies would have bear the brunt as well.

“The companies know if they refuse to get on board, it could sink one of the province’s flagship policies,” said Jacob Leibovitch, executive director of SEIU Canada, which represents 50,000 health-care workers in Ontario. He said that the idea of a suspension, freeze or cut of the payouts that the nursing home companies make to their investors has also been floated.

The big Ontario private for profit health operations include Extendicare, a huge US-based outfit and Chartwell.  You better know there’s some fierce lobbying going on to keep high flying executives and bonus babies from having to freeze their wages!

They will get little sympathy though.  59% of Canadian workers on a payroll survey reported this week indicated they would be in hot water if their checks were delayed by even a week.  More workers are saving, and even those polled that are hopeful of a raise this year, believe that cost of living will eat it up.  Canadian workers essentially believe they are threading water and in the distance seem to see a tsunami of household debt coming their way as they race for high crowd.

When even the business-based Liberals start saying executives are going to have to share the pain, you can tell that the mood is turning surly at the pay window here in the north.

Toronto Before Judy Duncan, ACORN Canada Head Organizer, and I went to York University to address Dr. Stephanie Ross’ class on Worker Organizations, we me with a friend for a pleasant hour who was a senior executive of one of the largest unions in Canada.  We often had this dialogue about where labor stood [...]]]>

Toronto Before Judy Duncan, ACORN Canada Head Organizer, and I went to York University to address Dr. Stephanie Ross’ class on Worker Organizations, we me with a friend for a pleasant hour who was a senior executive of one of the largest unions in Canada.  We often had this dialogue about where labor stood and future strategies for building a labor movement.

The conversation was more sobering than usual.

He shared with us the results of a regular semi-annual poll on the attitudes of Canadian workers on a whole number of subjects, but most telling in this case were the polling results concerning attitudes of unorganized workers to joining unions.  I was shocked at how low the numbers had fallen.

The percentage of workers polled who indicated that they would vote for a union if there were a representation election in their workplace had fallen to only 8% or 1 out of ever 12 workers.  If there were no opposition to the union being approved, only 18% of the polled unorganized workers were likely to vote yes.  Remember, that’s without opposition.

Among existing members of unions the sentiment was going exactly the opposite direction.  If a Canadian worker was in a union, 76% of them were happy about it compared to only 24% who were less satisfied.  These were the best numbers in a score of years, obviously prompted by the impact of the recession.  The recession has essentially made workers even more petrified of shaking the boat in any way thereby increasing their fear of  change if it means voting for a union, but if they are members of a union, they are thankful during this recession that they have real protection!

Looking at the graph, it was clear that these numbers did not appear overnight, but were part of long developing trends where the support of unions by unorganized workers was steadily declining.

The conclusion seems simple.  Strategies and tactics have to change.  We cannot rebuild the labor movement, even in Canada where concentration is 2 ½ times what it is in the United States without a “majority unionism” strategy similar to what I discuss in Citizen Wealth. Canada, remember, is where labor law and protections for union organizing are still relatively good, especially when compared to the United States where they are abominable!  Yet, not even here is there much hope that going the straight ahead route is going to reverse the trend and restore the labor movement.

Our friend echoed our own fears as we got up to leave, saying he hoped his union, even though losing members, would “come to their senses” and change their course, while they still had enough members and resources to make the change, rather than realizing they had to change when it was too late.

Our friend was right on target, but all we could hope is that we could help, and that he and others within his union would eventually be able to win the debate while they still could make a difference.