The Two Faces of Government ‘Largesse’
On 29 October, the Doug Ford Conservative government announced that all Ontarians were going to receive a cheque for $200 from the province’s coffers, just for being un-incarcerated adult Ontarians. The cost of this ‘generosity’ to the very same taxpayers will be something above $3-billion.
On 21 November, the Justin Trudeau Liberal government announced (among other ‘gifts’) that all Canadians who, in 2023, earned less than $150,000 would be the fortunate recipients of a cheque for $250. 18.7 million Canadians are expected to share $4.68-billion of some of their own money.
On 21 November, the Ford government announced that it was returning $2.6-billion of the current surplus in the Workplace Safety and Insurance Board. Only employers will get cash; workers will get some better support by improving existing (but poorly functioning) programmes. Only employers who have had no more than one conviction in the preceding 5 years will be entitled to a rebate. As convictions for violations of health and safety laws are comparatively rare, employers who may have violated existing standards may well get these hand-outs (oh, I mean rebates). It is a bit like saying that a pit bull which bit a baby could still get its treat if it was not caught at the other times it did it. The beneficiaries of this government scheme are vastly less numerous than those under the other two schemes and their benefits are much larger. For a business with 50 employees, the rebate will be $46,000; for one with 100 employees, $70,000.
What Is Going On?
The first two schemes are designed to allow the incumbent governments to score some points with voters and, notionally (but likely ineffectively), to provide a modest kind of stimulus consumer markets need. The third scheme is different in kind. It takes money from one class of voters, the working class, to give it to another, the employing class. The first two are shameless. The third is shameless and indefensible.
The justification Ford offers for taking money out of the workers’ compensation funds is that there is an actuarial assessment which calculates that there is more money in those funds than necessary to make the compensation regime safe and sound. That ‘excess’ money, this ardent believer in private enterprise says, should not be left in the hands of a prudent and timid set of trustees. It is way better to return it to the private sector where the animal spirit which animates wealth seekers will lead to more profit-oriented enterprise.
This would make some sense if it was true that the monies in the fund from which the rebates are to be drawn was the aggregation of contributions made by the employing class. It is not. The fund is an aggregation of workers’ monies.
For ever and ever, workers have had to find ways to protect themselves against the materialization of risks which lead to injuries, illnesses, and/or deaths. In earlier times they used to form Friendly Societies. Basically, these were funds to which a community of workers contributed to look after members of that community and their families when they found themselves in dire need. The equivalent these days is the purchase of insurance to cover expenses, loss of income, and the like. Varieties of individual and group insurance schemes serve to ward-off the vicissitudes of contemporary capitalist life. One such scheme is what is commonly known as workers’ compensation, but which is called the Workplace Safety and Insurance Board Act scheme. This label makes it clear that it is seen as a form of insurance organization to provide some security to workers who are injured, made sick, or killed at work.
Workers’ compensation regimes class workers by nature of their employers’ businesses. They do this to set appropriate rate and to apply relevant standards. Different ways of producing goods and services create different kinds and levels of risk. The experiences and histories of hurt workers in discrete categories serve as the bases for the setting of premium rates. This is common to all insurance schemes. For example, life insurance (to provide security to persons who might die while people still depend on them) sets premiums by reference to age, state of wellness, genetic markers, life styles, etc., of the person buying the insurance.
In the workplace circumstance, it is convenient to collect premiums from the employers who administer the payment of wages and who are asked to make payroll deductions when they do so. But the payment of premiums does not look like a payroll deduction. For all the world, it looks as if the employers are paying the premiums out of their own pocket. This is an illusion. If the workers had to buy the coverage directly, they would have to ask for more wages when they bargain for their terms and conditions of employment. Workers’ compensation premiums, in the aggregate, are foregone wages. The fact that these are taken out of their wages at a rate which may not be the one each individual worker at discrete working places would have paid does not change this underlying truth: the core argument that employers, in the aggregate, pay for workers’ compensation is an illusion.
Dangerous Illusion
It allows employers to say that, as they are paying for the scheme, they should be allowed to have a say in who should be eligible for compensation, what kinds of injuries and illnesses should be compensated. It allows them to argue that, if they do not have the same experiences as other employers, they should get a cash credit for this, a relief from the normal premiums. This, in turn, provides them with an incentive to pressure hurt workers not to make claims which might lead to the aggravation of injuries and encourage greater use of addictive pain killers. All this leads to unnecessary disputations, litigation, costs, denials of claims, and attacks on the level of benefits.
And the reliance on this illusion is all the more vexing because it is widely known to be an illusion. Every now and again, a well-established member of the Establishment will openly acknowledge this. One of the strongest of such pronouncements was offered by Paul Weiler, an academic who was trusted by mainstream governments to be a head of the British Columbia Labour Relations Board and a major inquirer into the Ontario workers’ compensation system before he became an eminent member of the law faculty at Harvard University. Here is the relevant passage from his Reshaping Workers’ Compensation in Ontario, 1980 (p 18):
“In the final analysis I believe that compensation benefits are paid for not by capital but primarily by labour … I emphasize this point in my Report to temper the ideological tone in the debate about the level and structure of compensation benefits. Richer benefits should not be seen as a device through which workers as a class extract a larger slice of the national income pie from capitalists as a class. Rather, workers’ compensation is a vehicle through which able-bodied workers share their income with their disabled fellows.”
All the emphases are mine. I want to make sure that we see how crystal clear it is to elites that workers pay for other workers. (There are similar pronouncements by high level courts discussing other similar worker-security-seeking schemes, like pensions.)
Workers have fought very hard to off-set the huge risks they are asked to bear in the workplace. Workers’ compensation was one victory: it gave them some redress when disaster struck. In Ontario it came into force in 1915. Ever since the employing class, aided and abetted by governments of various stripes, have tried to roll the workers’ gains back. They do not hesitate to rely on arguments which their most enlightened cheerleaders know to be false. The rebate story is one such instance. It creates an opportunity to demand that the real risk-takers and cost-bearers, workers, be given more control over the compensation regime which they fought so hard to win. •
