6/17/2011

STORMY SKIES FOR CANADA'S MIDDLE CLASS



The Canadian middle class is in crisis. Each year, its share of our national income shrinks, relative to that of the richest few. Recent reports show Canada’s wealthiest one per cent accounted for 32 per cent of all income growth between 1997 and 2007 – the most in recorded history. Thanks to skyrocketing executive compensation levels and an aggressive attack on well-paid, family-supporting jobs, the gap between the rich and the rest of us grows ever wider
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Nothing epitomizes this situation more than the recent history of Air Canada. In the last decade, Canada's national carrier has suffered unprecedented financial turbulence, including run-ins with bankruptcy protection. According to the Canadian Auto Workers’ internal research, over the same period Air Canada's CEO at the time, Robert Milton, pocketed $86 million – while thousands of front-line employees were forced to take cuts, to the tune of about $10,000 per year, including an erosion of real wages, lost vacation, paid lunch breaks and other benefits.


Air Canada workers made major sacrifices. The company plowed ahead with plans to do more with less. Work intensified and productivity skyrocketed. Measured in seat miles delivered per employee, labour productivity at Air Canada jumped 75 per cent. Yet many who had earned a good (albeit modest) salary saw their quality of life and working conditions decline.


This storyline has played out in too many workplaces across Canada. “Good” jobs are on the wane, in all sectors – whether in factories, service shops, office buildings, or among the professional classes. Many have come to accept the logic that jobs in the “new economy” are inherently insecure. Pension plans exist only in fairy tales, and personal sacrifice has become the new norm. We accept the mantra that the next generation of workers will be worse off, and assume they simply aren’t in a position to demand better.


This attitude must change – for everyone’s benefit. The squeezing out of Canada’s middle class has major implications for our collective prosperity. Middle-class incomes drive economic growth, pay for public services, support healthy families, and build communities. Society cannot subsist on crumbs left over by the rich. Workers cannot accept the logic that relentless cuts and constant sacrifice will bring better days ahead.


Air Canada employees have already drawn a line in the sand during their current contract talks. They’ve resolved to make up ground on lost wages. They’ve rejected a program of two-tiering, which would make second-class workers of future generations. And in a recent show of solidarity, the CAW, the Canadian Union of Public Employees, and the International Association of Machinists and Aerospace Workers (three unions representing the lion’s share of Air Canada employees) rejected a company proposal to undercut and eventually eliminate the current defined benefit pension plan. By saying “no” to these demands, Air Canada employees are facing down the corporate-led riptide that’s pushing Canada’s middle class to the brink.


With the company’s return to profitability in 2010 and a brighter future on the horizon, Air Canada’s demands for more cuts, fewer full-time jobs, and outsourcing appear baseless. It’s made worse by CEO Calin Rovinescu’s hefty 76 per cent pay hike that landed him $4.55 million in compensation last year, a defined benefit pension that would pay him $351,000 per year at age 65, and a $5 million retention bonus he would be paid just for staying on the job until March 2012. His insistence that workers accept less reeks of hypocrisy.


Not surprisingly, the frustration and anger among Air Canada employees is reaching a breaking point. Demonstrations have been taking place in communities across Canada, with impressive turnouts. CAW members recently voted 98 per cent in favour of strike action, as a last resort. They know that what’s at stake in these negotiations goes far beyond their own self-interest.


Air Canada is recognized as a world-class carrier and has received dozens of awards for quality service, largely because of its hard-working employees. It’s time they receive their fair share.


The Air Canada battle is a principled fight about fairness and justice. It’s about reclaiming workers’ rights to good jobs, as well as our collective ability to demand better from employers and government. It’s about closing that ever-widening wealth gap and strengthening the middle class, for all Canadians.


Ken Lewenza

The Mark News
Sat, 11 Jun, 2011

1 comment:

Dan Zwicker said...

AIR CANADA CUSTOMER SERVICE EMPLOYEES GO ON STRIKE AFTER TALKS FAIL

TORONTO

Air Canada's customer service agents and other airport workers are on strike after negotiations between their union and the airline failed to reach an agreement.

A spokesman from the Canadian Auto Workers union, which represents the 3,800 striking employees, says pensions and wages were key sticking points.

Union president Ken Lewenza had said earlier there was a "huge gap" between the airline and the union on those two issues.
Air Canada (TSX:AC.B) says it has a contingency plan in place to continue operating a full schedule even as the strike goes ahead.

The airline urges passengers to check its website because a high volume of calls could make it a long wait to get through to its call centres, which were largely operated by employees who have now walked off the job.

Federal Labour Minister Lisa Raitt has said she's concerned about the potential impact of a work stoppage on Canadians and on Canada's economic recovery.

The union aired its concerns on the pension issue well before the strike began.

The airline had proposed new hires would receive defined contribution pension plans instead of the defined benefit plans current employees have.

The company's unions agreed to accept numerous concessions worth billions to help the company to survive, but they insisted their defined benefit pension plans be saved.

Defined benefit plans are designed to provide retirees with a predictable income, but they expose the airline to additional costs if the pension fund's assets aren't able to pay for the benefits.

With defined contribution plans, the airline's contribution is limited to a set, negotiated amount and payouts to retirees depend on the performance of the underlying investments.

Union officials have said the airline wants to also gut the pensions of current workers.

Air Canada has about $13 billion in pension commitments to 26,000 active employees and 29,000 retirees. Estimates in January found that the plan is underfunded by about $2.1 billion.

Air Canada was forced into creditor protection from April 2003to September 2004, due in part to the cost of dealing with the company's pension deficit.

By The Canadian Press
Tue, 14 Jun, 2011