The first article talks about the temporary worker issues in Canada (Burgmann, 2014). The country has the federal government governing national policy and the provincial governments exercising jurisdiction over the provinces. Each province can have its laws, but many are subject to the existing laws of the federal government. The temporary labor laws are provided by the government to limit the number of foreign workers hired by companies in Canada.
At the same time, the same laws also govern the allocation of permits to work for foreign nationals living in Canada. The policy is aimed at ensuring that foreign workers have a chance to contribute to building the national economy. However, as it does so, it also has checks and balances that seek to limit the participation of the foreign workers. Too many foreign workers in the Canadian job market would displace the number of Canadians able to get jobs and create an unnecessary competitive market.
Meanwhile, provinces have economic development needs that are specific and may deviate from national averages. For example, a province can have a shortage of labor supply in a particular sector, while nationally there are enough citizens to fill the gap. Therefore, as the article mentions, provinces are supposed to get additional workers from other provinces.
They are not expected to rely on temporary workers or immigrant workers for their long-term needs. Instead, the federal government is looking for ways of encouraging the overall development of the Canadian labor pool. It had to come up with a radical proposition to make changes. It has made additional restrictions to immigrant labor use in a move that should tell companies that it is better to invest in locals from the onset of their operations.
Challenges of federal and provincial coordination of labor as an economic activity
Unfortunately, the federal policy goes against some provincial government policies. According to the article, Chastity Clerk, the Premier of British Columbia is quoted in the article warning the federal politicians against turning the labor issues into a campaign issue for their re-election. She sees the move by the federal government as a ploy to appeal to the interests of labor unions and other sympathetic groups that would be seeking to appear as defenders of the rights of Canadians to gain employment.
On the other hand, the claims are also rationally based on economic fundamentals. They highlight the existence of market imbalances in the supply of labor. The central government is making decisions informed by the need to affect the long-term characteristics of the labor market, while the premier is complaining because the policy will hurt the progress made to ensure that labor-intensive industries are functioning at their capacity and the economy is developing sustainably.
On one hand, limiting foreign national participation in economic activities makes sense because it limits competition of labor and allows the locals to have more opportunities for employment. On the other hand, the limitation places unnecessary burdens on companies that need to fill jobs in the short term. They have to either operate below capacity or invest in alternatives to labor, such as capital-intensive machinery, to meet the deficit.
Labor supply variations and implications for economic development
Secondly, limiting the number of foreign nationals who can work in Canada when hired by Canadian companies creates an artificial shortfall in the labor market. The shortfall causes a rise in wages, as demand levels exceed supply levels. Labor unions and their workers benefit because they have a valid reason to demand better compensation.
At the same time, the industries have to work collaboratively with labor training institutions and government agencies, both at the federal and the provincial levels. They do this as a remedy to mitigate long term deficiencies in the factors of production (Cundal & Seaman, 2012).
The problem with this position is that it causes the development of the country’s labor market, but it does not address variations in supply among provinces. An additional shortfall of the policy is that it supports a decline in economic productivity in the short term. It also fails to guarantee the development of the labor market. Instead of working collaboratively with local labor producers, companies driven by the profitability incentive might find it easier to export jobs.
This is a situation where they move many of their operations to other countries to avoid the low labor supply problem in Canada. It is one reason that informed the British Columbia Premier’s remarks about temporary workers being equal contributors to the development of the Canadian economy. Her remarks appeal to the businesses that have to grapple with labor shortages in the short term. They also address the human rights for the immigrant workers issue caused by the discriminatory policy (Cundal & Seaman, 2012).
A solution to the labor problem without compromises is unlikely. Even the article explains that the Premier has to be able to say yes and no to the business community needs and the labor union needs. The two groups sit on opposite sides of the labor market as buyers and sellers. Policies that affect buyers positively will likely cause harm to sellers. In addition, leaving the market to its own equilibrium can hurt any of the groups, thus the need for regulation.
The second article explains the integrity of the welfare program in the province of Ontario in Canada. It explains how the fraud detection and prosecution unit at the provincial government, with the aid of law enforcement authorities and the justice system, ensures that only those eligible to get welfare support are the ones who get it.
The welfare system aims to uphold the socioeconomic status of the Canadians. It provides monetary compensation for individuals who are genuinely out of work or underemployment. It is a form of social justice system seeking to reallocate resources from the productive sectors of the economy to pay stipends to the citizens. The assistance allows them to afford basic goods and services, support their families, and enjoy equal opportunities in their societies (Ministry of Community and Social Services, 2002).
Unfortunately, the system can be a detriment to effective participation of labor in productive uses. Individuals can find ways to show that they are needy and they qualify for welfare support, when in reality they are not. The aim of welfare distribution is to follow a market principle, where the supply matches the demand at any time. Manipulations in the system lead to wrong levels of demand for welfare, which cause excessive supply.
This is not sustainable, as the supply of welfare has to match and reflect the economic status of the province. Over payment or oversupply of welfare results in wastes that the provincial government cannot support sustainably. It also creates precedence for compensating labor for inefficient usage.
Workers who are in hard and underemployed statuses deserve to receive welfare as compensation for their underemployment. However, those who work in their correct employment levels based on their qualifications should not receive welfare. When they do, the extra pay creates an overcharge on the public and it is not morally and economically justifiable.
There are many examples of social assistance frauds presented in the article. For example, a woman received welfare support because she was separated from her spouse. This meant that she could no longer rely on her spouse for income support. However, when she reconnected with him, she failed to update her status with the authorities to stop the welfare support. Any assistance she received while being connected with her spouse was wrong.
Labor market compensation problems
On one hand, the intention of welfare support is noble. It allows individuals to contribute to living decently, even when their primary sources of income disappear or reduce. It allows the economy to continue to thrive as the level of overall consumer demand remains high to support other economic activities, such as manufacturing and services sectors. On the other hand, a welfare system provides an alternative to productive labor as a source of income for individuals.
Thus, it acts as an incentive against labor suppliers’ aim to offer labor at a given price range. Many individuals will see labor compensation as unsatisfying and choose to apply for welfare support. Instead of working to fix their employability status to make their labor appealing to buyers, they will work towards making their profiles seem fit for receipt of social assistance.
The goal of social assistance in creating equality and building cohesion in society is noble. Without it, even the relatively stable labor market that businesses enjoy would not be present, as social tensions and fights for equal opportunities can harm good business environments. On the other hand, social assistance is a negative influence to labor productivity.
It creates an artificial demand for labor that does not match the actual demand by organizations in an economy. For example, the article talks about the social assistance fraud situation in Ontario, Canada. The existence of fraud shows that significant numbers of would-be laborers are not offering their services for economic compensation.
The detrimental effect of social assistance is that it provides an alternative income that competes with income from employment. Employers have to offer higher compensations to justify the purchase of labor services from employees; otherwise, labor unions will rise up against them to demand better compensation.
Therefore, social assistance is a form of social tax that employers in an economy have to pay indirectly, in addition to the actual tax that they would pay to fund the social assistance program. On the other hand, the existence of social assistance is a boon to labor unions and collective bargainers (Leo & Andres, 2004).
Promotion and hindrance of individual economic pursuit
Another way to look at the problem is by examining the economic opportunities accessible to individuals claiming social assistance. If one has a substantial amount of assets that can help them when they are between jobs, or when they are taking time off to upgrade their skills, then they should not receive social assistance.
Here, the aim of the assistance is to offer help only to those who do not make an individual choice to be unemployed and have no means of surviving in any other way. However, a detriment of this objective is that it can hurt a genuine saving culture and other self-sustenance goals of individuals. For instance, it discourages one from abandoning welfare assistance and leaving it for use in the development of income generating assets in the future (Riddell & Riddell, 2012).
Burgmann, T. (2014). Temporary foreign workers needed for B.C.’s future, says premier. CBC News. Web.
Cundal, K., & Seaman, B. (2012). Canada’s temporary foreign worker programme: A discussion of human rights issues. Migration Letters, 9(3), 201-2014.
Leo, C., & Andres, T. (2004). Community initiation of welfare-to-work. Winnipeg: Canadian Centre for Policy Alternatives.
Ministry of Community and Social Services. (2002). Thousands caught through Harris government’s tough welfare fraud measures. Ontario Newsroom. Web.
Riddell, C., & Riddell, C. W. (2012). The pitfalls of work requirements in welfare-to-work policies: Experimental evidence on human capital accumulation in the self. Ottawa, Candad: Canadian Labour Market and Skills Researcher Network.