Monday, August 20, 2018

My Tyee column: Skip the Dishes lawsuit signals need for new employment laws

If governments were doing their jobs, a Skip The Dishes food delivery driver wouldn’t have to sue for basic employment rights.
Charleen Pokornik, who started driving for the company in Winnipeg two years ago, says the company is wrongly claiming the drivers are independent contractors, not employees. 
Increasingly, jobs have been changing — and generally for the worse. More part-time work, more people on short-term contracts instead of permanent jobs, and more people scrambling to earn an income through self-employment. 

Skip the Dishes — like Uber and an expanding number of similar app-based businesses — is contributing to an erosion of workers’ rights and ability to bargain the terms of employment. They’ve been good at branding their business model — remember the “sharing economy” enthusiasm? 
But really they’ve found a way to sell a service while avoiding employment laws and taking advantage of people who have few work options.
A decade ago, a restaurant would have employed a delivery driver. The pay would have been low, but at least minimum wage, and overtime pay and other basics would have been guaranteed under employment law. 
Companies like Skip the Dishes dodge all those requirements. Delivery drivers are independent contractors, the companies claim. That means no protection under employment standards legislation or labour codes. As a result, drivers report earning less than minimum wage. (Just Eat CEO Peter Plumb receives a $1.2 million base salary, plus up to $4.2 million in bonus and stock.)
The proposed class action lawsuit would challenge the claim the workers are independent contractors.
It’s hard to predict the outcome. The rules for determining whether someone is an employee or contractor have been in place for decades, and in B.C. were last reviewed 20 years ago. 
“Some of these tests include how much direction and control the worker is subject to, whether the worker operates their own business and has their own clients, whether the worker has a chance of profit or a risk of loss, whether the work they are doing is integral to the business and whether there is an ongoing relationship,” the B.C. government summarizes
The summary also notes: “The Act is intended to protect as many workers as possible. When deciding if a worker is an employee or an independent contractor, one of the main questions to ask is ‘whose business is it?’”
And this is clearly Skip the Dishes’ business, not Charleen Pokornik’s.
Skip the Dishes has a 2,600-word courier agreement new drivers must accept, and it’s almost entirely focused on confirming the contractor relationship. It also attempts to bar drivers from organizing. “Any claim you may have must be brought individually… and not as a representative plaintiff or class member, and you will not join such claim… or participate in a class action lawsuit, collective or representative proceeding of any kind.”
“It seems that we need more clarification,” Sean MacDonald, a professor at University of Manitoba’s Asper School of Business, told the CBC. “There’s a lot of curiosity how this will all go down, because it will affect a lot of the players in the gig economy.” 
MacDonald is wrong. We don’t need more clarification. We need governments to change the laws to protect workers in a changing economy.
It’s not surprising that Uber, Lyft, Skip the Dishes and others have seized the opportunity. They have found a way to make money by meeting consumer needs while exploiting weaknesses in labour laws.
The industry argues it offers workers the chance to choose their own hours. Companies tout the independence of workers and argue their model allows people to work around demands of a full-time job or family responsibilities.
But the reality can be different. New York City has just decided to freeze the number of drivers for taxis and app-based ride services and set a minimum wage. That was based in part on a study that found about 60 per cent of app-based drivers were working full-time and 90 per cent were immigrants. About 85 per cent were making less than the proposed wage the city council had set, linked to the state minimum wage.
Across the U.S., a study found Uber drivers were paid about US$9.21 an hour on average after expenses, less than minimum wage in many cities where they operate.
The whole purpose of employment standard laws and labour codes is to level the playing field and balance the power of workers and employers. The rules establish minimum standards, based on social, economic and political consensus. They allow workers to organize to increase their bargaining power. They ensure the most desperate or vulnerable are protected from exploitation.
But in B.C. and across Canada, the rules are badly outdated.
The issue isn’t about whether app-based companies should exist. It’s about ensuring basic workplace rights are not undermined by their business models. Doing that might make them slightly less profitable, but it doesn’t threaten their existence.
And it would mean people like Charleen Pokornik don’t have to take on corporate giants in court to get a fair deal for workers. 

Friday, June 29, 2018

A revolution looks different on the streets you once walked

My latest Tyee column

People are dying on the streets I walked to work in Managua just two years ago. Masaya, a smaller town about an hour away by bus, is a battlefield. The streets of Leon, where we also lived, were filled with improvised barriers as neighbours united to keep out police and government supporters.

This is what revolutions look like, I suppose, but it is still surreal to see all this unfolding in a country that I lived in so recently, and that seemed then to be working. And it’s also surreal that despite some 285 deaths and 10 weeks of fighting, the rest of the world has paid so little attention.

After more than two years living in Honduras — perilously close to a failed state — Nicaragua looked like a model of stability. Institutions — schools, hospitals — worked. The cities weren’t plagued with the urban gangs and narcos that led Honduras to have the world’s highest murder rate when we lived there.

The Sandinista government of Daniel Ortega showed troubling signs of moving toward one-party rule, but a 2015 Cid Gallup poll found 66 per cent of Nicaraguans gave Ortega a positive rating. 

That was consistent with my conversations with Nicaraguans. People grumbled about a deal to let a Chinese corporation build a rival to the Panama Canal across the country, complained that Ortega’s wife Rosario Murillo — now vice-president — was spending millions of dollars to erect hundreds of five-storey “arboles de vida” around the capital, Klimt-inspired giant metal trees, each with 17,000 lights. Some were alarmed when his government changed the constitution to let him seek a third term. Elections weren’t fair and open.

But despite that, and the second highest poverty rate in the hemisphere, they still spoke fondly of Daniel, as he was always called, the short, stocky leader who spent 24 years fighting against the Somoza dictatorship and the U.S.-backed Contras, seven years in jail, tortured, willing to accept his electoral defeat in 1990. He was on their side, most people said.

Until, in late April, they decided he wasn’t.

That’s part of what makes it surreal. The government’s legitimacy had been questioned — one newspaper always referred to him as the illegally elected president — but largely accepted. Until the mood changed. 

About 285 people have been killed, mainly by police and well-armed pro-government paramilitaries. Protestors have set up tranques — road blocks mostly built out of pavement blocks ripped from the streets — to protect neighbourhoods and slow traffic throughout the country as a way to bring pressure on the government. 

On May 29, Mother’s Day in Nicaragua, several hundred thousand people marched down a main road near our old house, led by mothers whose children had been killed by police and paramilitaries. The sea of blue and white flags was inspiring. The end of the march, when snipers opened fire and 11 people were killed, was horrifying.

The protests were triggered when the Ortega government announced changes to the social security plan on April 20. Pensions would be cut five per cent, and employer and individual contributions would be raised a small amount. 

The changes weren’t big. But they were arbitrary, a reminder of the president’s total power. And they came after mismanagement or corruption had undermined the fund.

Students led the first protests. After five days — and 25 deaths — Ortega scrapped the changes.

But a tipping point had been reached. Protesters had discovered their power, although at a high cost. The dead could not be brought back to life as easily as the social security changes were reversed, and protests continued demanding justice and accountability. 

The Catholic Church, a powerful force, attempted to facilitate a national dialogue between the government and protestors, but talks failed. The leading business organization ended its support for the government.

And the country remained a battleground.

The images and stories have been incomprehensible. Masaya, a cradle of the Sandinista revolution, was a quiet, traditional town about 45 minutes away by bus. We had licuados in the square, admired the church, went to a wild festival where costumed people followed bands through the streets and we were invited into a family’s celebration.

Now the images are of paving stone walls thrown up to resist police and para attacks, young people wielding homemade mortars, bloody bodies and police storming the cathedral. The city declared it was no longer under the authority of the government, and reprisals were swift and violent.

Armed gangs stalk the streets of Managua, a family of six was burned in their home, thousands of people have been injured and scores have disappeared.

There were warning signs when we lived there. The government took control of the courts and the electoral commission, and we learned not to walk past the commission’s office when there were protests, because Sandinista youth might attack.

But I didn’t see this coming.

That might be part of the culture. Nicaraguans talk of the Güegüense effect, a reference to a 16th-century play that mocked the Spanish invaders without directly confronting them. The play is still part of the culture; some political scientists say that the tendency for Nicaraguans to conceal their true feelings in the face of authority also remains strong.

It’s difficult to see a way out. The protesters want justice and accountability for kidnappings and killings, and fair elections next year, two years ahead of schedule. The Ortega government has shown no signs of agreeing to either demand, and blames “delinquents” for the violence.

Meanwhile, the economy has been battered, people are unable to work and the fledgling tourism industry is destroyed. International organizations and other governments offer advice, but little more. (Canada has condemned the killings and repression and urged dialogue.)

Revolutions or uprisings have been abstract for me, perhaps a failure of imagination. Now one is happening on the streets I once walked, in the towns we visited and with people we know. 

It has been a terrible time, and there seems no good way for it to end. People will keep fighting, and dying, or Ortega will establish a family dynasty — like the Somozas who controlled the country for more than four decades before being ousted by Ortega and the Sandinistas in 1979.

It’s an impossible choice, but it’s the one facing Nicaraguans. My heart aches for them.

Monday, March 19, 2018

My Tyee column: Why the new health tax makes sense

Winners are always champions of the status quo. 

Like Liberal leader Andrew Wilkinson. He was asked whether it was fair that employers had paid MSP premiums for 40 per cent of workers, while the rest had to pay the premiums out of their own pockets.

“Fairness is always a matter to be sorted out in the marketplace,” he said. “That’s what employers have to do is compete for good workers and pay them appropriately.”

So if you and your spouse are both working full-time at $15 an hour — about $29,000 each — it’s fair that you had to pay MSP premiums. And that the Liberals doubled them.

Just as Wilkinson, paid almost $159,000, thinks it’s fair that taxpayers take care of his MSP premiums as part of a lavish benefits/pension package.

It’s the market, you know.

Which is rubbish. MLAs’ pay and benefits weren’t set by the market. The government ordered a rigged review which delivered big raises and pensions the rest of us could only dream about. The review decided MLAs needed up to $19,000 a year for a second home in Victoria, while our elected representatives decided people on disability assistance should be able to find a place to live in Victoria for $4,500 a year. 

Free markets bring great benefits. But the free market mantra has become a justification for the powerful to protect their own interests at the expense of other citizens.

Which leads to the new government’s health care tax, replacing MSP premiums.

Broadly, the tax ends MSP payments for individuals and shifts the cost to employers. About 40 per cent of employees, generally unionized or management, often in the public sector, have had their MSP premiums paid by the employer in the past. Most of us paid $900 a year or more. (People with net household incomes under $42,000 could apply for an exemption.)

No one could argue that MSP premiums were sound public policy. They were a tax, and people earning $50,000 paid the same as people earning $500,000. 

The Liberals, recklessly, promised to cut MSP premiums in half in 2017 without saying how they would cut services or raise other taxes to make up the lost revenue.

The New Democrats upped the ante by promising to eliminate MSP premiums — also without saying how they would make up the lost revenue. 

And please, read the rest of the column here at The Tyee. It's pretty good.

Monday, February 26, 2018

My Tyee column: How the Chinese government took control of BC seniors’ homes

Great. The lives of seniors in B.C. care homes, where they are already over-drugged and under-supported, now depend in part on the Chinese government.

On Friday, the government seized control of Anbang Insurance Group, a financial giant with investments around the world. It cited corruption, fraud and a risk the whole $390-billion company could go broke.

Last year, Anbang spent an estimated $1 billion to buy Residential Concepts, which operates 21 seniors homes in British Columbia. It’s the biggest private provider in the province, collecting $87 million from the provincial government in 2015/16.

Anbang has no experience in seniors care. Its finances were murky and ownership so tangled as to be incomprehensible. It offered no promises of additional investment in the company or increased employment. Concerns about its business practices were already widespread. 

But to promote its pro-China agenda, the Trudeau government turned a blind eye to the risks — and shifted them to seniors. Ottawa quickly approved the takeover, and the provincial government offered no objections and transferred operating licences to the Chinese company. 

You can read the rest at The Tyee here. It's pretty good.

Thursday, February 22, 2018

NDP wins with bold BC budget

Give Finance Minister Carole James full marks for a bold budget approach and the skill to sell it.

The new government was in a tough spot. It had lots of campaign promises to deliver, and no money because of the BC Liberals’ reckless decision to halve MSP premiums without any plan to replace the revenue.

Conventional wisdom has been that tax increases of any kind would bring all kinds of abuse. So far, the budget reaction is proving conventional wisdom wrong.

The big tax item is a new payroll tax to replace MSP premiums entirely by 2020 and bring in $1.9 billion a year when fully implemented. Businesses with less than $500,000 in payroll — say a half-dozen employees — will be exempt. Those with $1.5 million or more will pay tax equal to 1.95 per cent of payroll.

It’s a big new tax; corporate income tax, for example, is only expected to bring in $4.1 billion this year. But while business groups aren’t happy, they haven’t taken to the barricades. The Greater Vancouver Board of Trade still gave the balanced budget a C-plus rating. 

You can read the rest of the column at The Tyee here.

Wednesday, December 20, 2017

Carole James’s Big Budget Problem

(Belatedly posting my recent Tyee column.)

Finance Minister Carole James put a good spin on this week’s quarterly update on the province’s finances.

But the update highlights big problems the NDP government faces in crafting its first budget, due in mid-February. Without tax increases, the government won’t be able to deliver on its election promises or provide the changes supporters expect.

The September budget update — a mini-budget — didn’t include funding for some campaign promises, like $10-a-day child care, the promised $400 a year for renters or thousands of new affordable housing units. There wasn’t enough time given the delay in forming government, James said.

But there also wasn’t enough money. And the challenge will be greater next year.

This September mini-budget set out a three-year forecast of revenue and expense.

For fiscal 2018, the government is forecasting $150 million in additional revenue — less than one-third of one per cent. (The budget numbers are easier to grasp if you knock six zeros off them. Imagine a family with an income of $52,407 and big expectations with an extra $150 to spend next year.)

Population growth is forecast at 1.2 per cent, and inflation will be about two per cent. So the government would need to spend about 3.2 per cent more just to keep providing the current services. That would be about $1.7 billion, compared to the expected $150 million increase in revenue.

And that is before introducing things like the $10-a-day child care plan or addressing real problems the New Democrats identified in opposition — actions supporters are expecting.

The September update also forecast expenses for next year. The plan calls for nine of the 20 ministries to have their budgets frozen. Two — environment and labour — would see spending cuts. Five — including the ministries of children and families, housing and education — would have spending increases of one-half of one per cent or less.

I’d thought the numbers might be just placeholders, in part because BC Liberal budgets so often underestimated revenues by huge margins. Last year, for example, the Liberals budgeted for a $264-million surplus and ended up with $2.7 billion. (If they had budgeted more accurately/honestly and spent half that surplus addressing issues that rankled voters, the Liberals would probably still be in government.)

But the quarterly update killed that kind of optimism.

The numbers for the first six months of the fiscal year weren’t terrible but neither were they great. Revenue is now expected to fall short of the projections in the new government’s September budget update by $283 million, mostly because of lower income tax payments from the federal government and ICBC’s poor financial performance. Expenses are on track with the update’s projections despite a $152-million budget overrun in fighting forest fires.

Any hope that projections for this year and next were overly conservative and the new government would have more fiscal room was snuffed.

The biggest challenge is former premier Christy Clark’s reckless pre-election move to cut Medical Services Plan premiums in half for people with a household income under $120,000, announced in the Liberals’ February budget. But it doesn’t take effect until Jan. 1, so revenues are only reduced for the last three months of this fiscal year, which ends March 31.

But next year, the change will cost the government more than $1.2 billion in lost revenue.

Cutting MSP premiums is sound policy. The premiums, which the Liberals had more than doubled, were a regressive way to pay for health care. A family with $40,000 in income paid the same amount as the richest British Columbians. Covering the costs through income taxes — like most provinces — would be more equitable.

But the Liberal budget didn’t introduce any tax increases to cover the lost revenue. It just pushed the problem into the next year and hoped no one would notice the ticking time bomb.

All of which leaves the NDP government facing three choices.

It could try to cut expenses to fit the projected revenues. In her briefing on the quarterly update, James noted, “A number of our promises are longer term and implemented over a number of years.” That leaves room to make a small start on promised affordable housing and child care. Premier John Horgan has also talked about the importance of federal funding. But really, after 16 years talking about the Liberals’ failure to spend in critical areas, the new government can’t manage in the same way.

It could choose to run a deficit, spending more than it took in and leaving the debt for future taxpayers. But beyond political expediency, there is no justification for deficit budgets when the economy is performing this well.

Or the budget could increase taxes. The September update included an increase in the corporate tax rate from 11 to 12 per cent and a bump in income tax for people being paid more than $150,000 a year from 14.7 per cent to 16.8 per cent. But that’s not enough to make up for the $1.2 billion in lost revenue from the MSP change.

The government has appointed a three-person panel to provide advice on ways to replace MSP revenue and allow the full elimination of premiums within four years.

Pragmatically, tax increases make sense. If you’re cutting MSP premiums, you need to find revenue to pay for critical public services somewhere else.

And the NDP platform, which promised the eventual elimination of the health care premiums, said a “non-partisan MSP elimination panel will advise on how to protect health care funding, while phasing out this unfair flat tax.”

The anti-tax lobby has been successful in turning the idea of any tax increase into anathema.

There are no easy choices for the government, and lots of political risks.

But British Columbians voted — barely — for change. Which means tax increases and investments in a better society, despite the political risks.

Friday, December 08, 2017

Why I'd kill Site C

I have no idea what the government will do about Site C. (I do know that anyone who claims it’s an easy choice to kill the project or go ahead is not to be taken seriously.)

But if it was up to me, I’d opt for cancellation.

The people pushing for completion rely heavily on three flawed arguments.

First, that BC Hydro has already spent $2 billion, so despite the certainty of delays and cost overruns, the government might as well keep spending. 

That’s silly. Economists call it the sunk cost fallacy. The money already spent is gone. The question is whether the money still to be spent is a good investment. Anyone who has paid too much for a new clutch for an old car because they spent money on a brake job three months earlier understands the principle.

Second, they maintain that even if forecasts show the power isn’t needed, someone will probably show up to buy it. Maybe we’ll all start driving electric cars, the dam’s backers fantasize. That’s no way to justify spending billions of dollars.

And third, they talk about jobs. About 2,000 people are at work on the site. It will be rough for them if the project is shut down. But 2.5 million people are employed in the province, and the workers on the site have skills that are in demand. They don’t need a publicly funded make-work project\.

On the other side, the government has to consider the emergence of new technologies to produce green power at ever lower costs, the BCUC’s determination that the power from Site C won’t be needed for years and the risks of soaring costs.

The latter would be the deciding factor for me.

When then-premier Gordon Campbell announced the government would build the Site C dam in 2010, it was a $6.6-billion project. The price tag jumped to $7.9 billion, then $8.3 billion and now the BC Utilities Commission says the real cost will be more — perhaps much more — than $10 billion. 

That’s why I would bail, if I was the premier. (Pause for collective shudder.)

We know the costs of cancelling the project.

But continuing means signing a blank cheque. The dam could cost $10 billion, $12 billion or $15 billion. And the NDP government, having made the decision to go ahead, would own the consequences.

I’d say no.