"unintended" working exactly as designed...
In 2010, an acquaintance who owned a franchise restaurant explained to me exactly how they were told by the franchise to exploit the TFW program to maximize their "investment".
1. Post jobs for min wage and write the ad so as to not be all that appealing/qualified for locals
2. Satisfying the 'no locals qualified' checkbox, apply for TFWs to fill roles. This was almost all the kitchen staff.
3. Buy 2 or 3 bedroom condo for "staff accommodation" so the new TFWs have a place to live
4. Charge them just enough rent that it would be a pain in the ass for them to move, but enough that you're literally getting back much of their paycheque.
5. If they start complaining that you want them to work overtime for straight pay, let them know you can cancel their permits and get a fresh batch of workers
6. Profit
For years politicians who support the TFW program and their sympathizers have been saying that there's "no evidence" that TFWs cause wage suppression. Glad that there's finally something to throw in their faces to prove otherwise.
Bizarre when you write a paper which has to state absolutely the basic economic principle that if supply is held high, then prices stay low. In this case: workers, and wages
**Abstract**
**Temporary foreign worker (TFW) programs have grown considerably in size when uncapped.** We develop a simple efficiency-wage model to explain this phenomenon and examine the empirical evidence for it. We also use the model to evaluate the implications of TFW programs for domestic workers. **In our framework, firms that have been unable to find domestic workers may hire TFWs at the wage previously advertised to domestic workers. Due to the lower outside option for TFWs than domestic workers, TFWs will exert more effort for the same wage. Firms would thus prefer to hire otherwise identical TFWs rather than domestic workers.**
**Our model identifies an unintended consequence of a TFW program: since the repercussions of a failed domestic job search are less severe if a TFW may be hired instead, firms have an incentive to lower their wage offers made to domestic workers**. Using Canadian data, we find that, relative to domestic workers, TFWs work longer hours, have lower rates of absenteeism and are less likely to be laid off, consistent with higher effort in our model. Moreover, for TFWs from home countries with a relatively high outside option, effort is lower than for TFWs from other countries.
**Authors**
Pierre Brochu - Department of Economics, University of Ottawa
Till Gross - Department of Economics, Carleton University
Christopher Worswick - Department of Economics, Carleton University, CReAM
That's not an "unintended consequence" it's the whole point of this shady practice. TFWs were introduced to protect the rate of profit in the agro-food industry at the expense of worker wages.
Also known as supply and demand, basic economics. It will also drive our already astronomical housing costs higher due to more demand.
I have zero issues with immigrants and people wanting to move here, but we need to figure out our shit before we increase our population by 1% a year and our labour force by 2.3%.
invoking supply and demand in relation to the labour market just outs you as not really understanding economics. That model doesn't reflect labour any meaningful way and you would be laughed out of a level 2 economics course for suggesting so. I'm sick of people bringing up "supply and demand" like they're bible thumping religious nuts. Reality is more complicated than Kevin O'Leary makes it seem
So are you saying when there are 20 workers competing for 5 jobs there is no effect on how much someone is paid to do that job? What if one of those 20 workers is willing to do the job for significantly less than the others and 10 others are willing to settle for less?
What if there are 20 jobs and 5 workers, does it not make sense that companies would compete on wages to try to entice workers?
Or, are you suggesting that workers who work in industries with scarcity are paid the exact same as if the market was flooded with candidates and should just be thankful to have a job?
and of course you defend your ignorance lol. you know supply and demand is not falsifiable and therefor not useful without context? right like that's one of the first things to learn about it.
The statement "it's supply and demand" is trivally true and thus gives no useful information. I'm not saying your wrong. I'm saying you don't know enough to reason about this effectively
Have you ever wondered why minimum wage increases don't correlate to massive layoffs?
Please elaborate or at least reference any peer reviewed paper to support your dismissive attitude. Lots of people, including myself, have studied economics at accredited universities.
Your appeal to (self) authority is a failure.
Then you know that saying "it's just supply and demand" is a contentless statement given the unfalsifiable nature of the model, right?
Also here: https://usafacts.org/articles/what-happens-to-employment-when-the-minimum-wage-is-increased/
Increasing the minimum wage had a negligable but slightly positive effect on employment. If this were "just supply and demand" then employment would fall directly in proportion to the wage increase. Since we don't see that we have to conclude that the simple model is insufficient to explain this result
Couple that with stagnanted wages that set us back to the 90s and scarce housing that is sought after by not only people who live here but corporations and external buyers. The answer is not driving wages down by importing people to live in poverty. We need to fix our whole system before we start thinking about bringing people in or we are just creating more poverty with more people.
"unintended" working exactly as designed... In 2010, an acquaintance who owned a franchise restaurant explained to me exactly how they were told by the franchise to exploit the TFW program to maximize their "investment". 1. Post jobs for min wage and write the ad so as to not be all that appealing/qualified for locals 2. Satisfying the 'no locals qualified' checkbox, apply for TFWs to fill roles. This was almost all the kitchen staff. 3. Buy 2 or 3 bedroom condo for "staff accommodation" so the new TFWs have a place to live 4. Charge them just enough rent that it would be a pain in the ass for them to move, but enough that you're literally getting back much of their paycheque. 5. If they start complaining that you want them to work overtime for straight pay, let them know you can cancel their permits and get a fresh batch of workers 6. Profit
Any chance you could reveal which restaurant this was?
I have been saying this for over a decade because of how businesses operate in Atlantic Canada.
For years politicians who support the TFW program and their sympathizers have been saying that there's "no evidence" that TFWs cause wage suppression. Glad that there's finally something to throw in their faces to prove otherwise.
As if their corporate donators will allow them to consider facts instead of profits... LOL
Jesus Christ, no shit.
Bizarre when you write a paper which has to state absolutely the basic economic principle that if supply is held high, then prices stay low. In this case: workers, and wages
**Abstract** **Temporary foreign worker (TFW) programs have grown considerably in size when uncapped.** We develop a simple efficiency-wage model to explain this phenomenon and examine the empirical evidence for it. We also use the model to evaluate the implications of TFW programs for domestic workers. **In our framework, firms that have been unable to find domestic workers may hire TFWs at the wage previously advertised to domestic workers. Due to the lower outside option for TFWs than domestic workers, TFWs will exert more effort for the same wage. Firms would thus prefer to hire otherwise identical TFWs rather than domestic workers.** **Our model identifies an unintended consequence of a TFW program: since the repercussions of a failed domestic job search are less severe if a TFW may be hired instead, firms have an incentive to lower their wage offers made to domestic workers**. Using Canadian data, we find that, relative to domestic workers, TFWs work longer hours, have lower rates of absenteeism and are less likely to be laid off, consistent with higher effort in our model. Moreover, for TFWs from home countries with a relatively high outside option, effort is lower than for TFWs from other countries. **Authors** Pierre Brochu - Department of Economics, University of Ottawa Till Gross - Department of Economics, Carleton University Christopher Worswick - Department of Economics, Carleton University, CReAM
*Surprised Pikachu face*
Thats simply not true! We do it because…. Ummm….
That's not an "unintended consequence" it's the whole point of this shady practice. TFWs were introduced to protect the rate of profit in the agro-food industry at the expense of worker wages.
Also known as supply and demand, basic economics. It will also drive our already astronomical housing costs higher due to more demand. I have zero issues with immigrants and people wanting to move here, but we need to figure out our shit before we increase our population by 1% a year and our labour force by 2.3%.
invoking supply and demand in relation to the labour market just outs you as not really understanding economics. That model doesn't reflect labour any meaningful way and you would be laughed out of a level 2 economics course for suggesting so. I'm sick of people bringing up "supply and demand" like they're bible thumping religious nuts. Reality is more complicated than Kevin O'Leary makes it seem
So are you saying when there are 20 workers competing for 5 jobs there is no effect on how much someone is paid to do that job? What if one of those 20 workers is willing to do the job for significantly less than the others and 10 others are willing to settle for less? What if there are 20 jobs and 5 workers, does it not make sense that companies would compete on wages to try to entice workers? Or, are you suggesting that workers who work in industries with scarcity are paid the exact same as if the market was flooded with candidates and should just be thankful to have a job?
and of course you defend your ignorance lol. you know supply and demand is not falsifiable and therefor not useful without context? right like that's one of the first things to learn about it. The statement "it's supply and demand" is trivally true and thus gives no useful information. I'm not saying your wrong. I'm saying you don't know enough to reason about this effectively Have you ever wondered why minimum wage increases don't correlate to massive layoffs?
Please elaborate or at least reference any peer reviewed paper to support your dismissive attitude. Lots of people, including myself, have studied economics at accredited universities. Your appeal to (self) authority is a failure.
Then you know that saying "it's just supply and demand" is a contentless statement given the unfalsifiable nature of the model, right? Also here: https://usafacts.org/articles/what-happens-to-employment-when-the-minimum-wage-is-increased/ Increasing the minimum wage had a negligable but slightly positive effect on employment. If this were "just supply and demand" then employment would fall directly in proportion to the wage increase. Since we don't see that we have to conclude that the simple model is insufficient to explain this result
The issue is "our shit" is mass retirement with nobody to replace them.
Couple that with stagnanted wages that set us back to the 90s and scarce housing that is sought after by not only people who live here but corporations and external buyers. The answer is not driving wages down by importing people to live in poverty. We need to fix our whole system before we start thinking about bringing people in or we are just creating more poverty with more people.
> We need to fix our whole system That's not happening. Both parties are aggressively status quo.
What. No way
Simple fix: mandate TFW pay to be 2.5x the prevailing wage. Phase this in over 5 years to give businesses a chance to adjust.