Toronto: The Downtown Abbey of Canada?

Toronto has the largest and fastest growing concentration of working poverty in the country.

Thestar.com
April 20, 2015
By Laurie Monsebraaten

Toronto has become the Downton Abbey of Canada, home to the country’s largest and fastest growing concentration of working poor who are toiling in the service of the city’s burgeoning knowledge sector, according to a new report.

The analysis by social policy expert John Stapleton, bolsters a recent United Way report on growing inequality in Toronto, and research earlier this month that shows Ontario’s minimum wage continues to trap too many area workers in poverty.

The Toronto region has the highest percentage of working poor in the country with more than 9 per cent of workers or 264,000 adults living on poverty-level wages. That is an 11 per cent increase since 2006, says the report being released Monday.

Vancouver follows closely in second place at 8.7 per cent, while most other Canadian cities hover around the national average of 6.6 per cent, says the report funded by the Metcalf Foundation, a private family foundation dedicated to equity, sustainability and the arts.

“Canada’s two richest cities are becoming giant modern-day Downton Abbeys where a well-to-do knowledge class relies on a large cadre of working poor who pour their coffee, serve their food, clean their offices, and relay their messages from one office to another,” it says, referring to the popular British TV drama about an aristocratic family and their servants.

Knowledge workers include senior managers and professionals in business, finance, government, law, education, health care, media, arts, sports and entertainment.

The report is an update of Stapleton’s landmark 2012 research, which showed Toronto’s working poor grew by a staggering 42 per cent in the first five years of the millennium. (Although this earlier work was based on the long-form census, which no longer exists, Stapleton has used Statistics Canada tax filer data to replicate his 2012 findings and inform his latest report.)

He defines the working poor as non-students between the ages of 18 and 65, living independently, earning more than $3,000 but less than the low income measure (LIM), defined as 50 per cent of the median income.

By that measure, a single person in 2011 with annual earnings of less than $19,930, after taxes and government transfers, was considered working poor. In today’s dollars, it would be about $20,800. For a family of four, it would be just over $41,600.

The “good news,” Stapleton says, is that the rate of increase in working poverty in Toronto has slowed from a decade ago.

But despite an improving economy, increases to the minimum wage and new income supports such as the federal Working Income Tax Benefit, Universal Child Care Benefit and Ontario Child Benefit, working poverty in the city continues to climb.

In the city of Toronto, where almost 11 per cent, or 142,000 adults, are living in working poor households, working poverty is concentrated in the inner suburbs of North York (13 per cent) Scarborough (12 per cent) and York (10 per cent).

It has also begun to spill into York and Peel regions where the cities of Markham and Brampton lead with working poverty rates of 10.2 per cent and 9.6 per cent respectively, according to the report.

“For the first time, working poverty is growing faster in the outer suburbs like Markham, Brampton and Richmond Hill compared to south of Steeles Ave.,” Stapleton says. It grew in Markham by 26 per cent, in Brampton by 22 per cent and in Richmond Hill by 21 per cent, he notes.

Although more research is needed to fully explain this phenomenon, Stapleton suspects it is largely because housing in the city of Toronto is becoming too expensive for low-wage workers.

“What is the difference between the working poor in Toronto’s downtown core and the working poor in Downton Abbey?” Stapleton asks. “The working poor in Downton Abbey can afford to live there.”

Toronto’s “rich city, poor city” status is explained by the area’s high concentration of knowledge work and entry-level service jobs relative to middle skill, middle income jobs. It is made worse by the rise of part-time, contract and temporary jobs and corporate restructuring that has turned entry-level jobs into dead-end positions that no longer lead to career advancement, Stapleton says.

“The continued upward creep of working poverty is strong evidence that good social policy is not sufficient,” Stapleton says. “Employment income matters. And changes in the labour market are making it difficult for may people to earn enough money to stay afloat.”

Labour market policy expert Tom Zizys says employers need to reconsider their “just-in-time” labour practices that are trapping workers in low-wage entry-level positions and causing a shortage of employees with “soft skills” savvy.

In the past, when entry-level workers advanced up the career ladder, they learned the crucial soft skills of corporate culture, such as how to develop contacts and networks within the company, he says.

“The skills shortage that people talk about is not a skills shortage, it’s an experience shortage. And that experience is only acquired in the workplace,” Zizys says. “We need to raise the bar in terms of what we expect of employers.”

Labour activists could profile successful companies that continue to train their own workers through the old career-ladder model, such as membership-based wholesaler Costco, he says. Government could help by providing incentives to employers to contribute to sector-wide training, perhaps in partnership with colleges or universities, such as the Hospitality Sector Training Centre, supported by local hotels and union locals, he adds.

“Addressing the growth in working poverty isn’t just good social policy, it’s good economic policy,” Zizys says.

Services and support for the growing number of working poor in the regions outside the city of Toronto, as well as better public transit to support longer commutes are essential, the report says.

“The working poor cannot buy homes on their wages and many use food banks and other services to meet their basic needs,” the report says. “We have to keep thinking about the acceptability of working poverty in Canada’s richest city.”