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Low-wage workers will feel economic brunt of virus spread

Conference Board expects weakest year for growth since 2008 crash
Sudbury bakery

Frontline workers in retail, accommodations, and restaurants sectors will feel the greatest economic impact of the COVID-19 virus, according to the Conference Board of Canada.

These vulnerable workers are among lowest paid across all industries and occupations, said executive director Michael Burt in a commentary.

“In the coming weeks, the full brunt of the COVID-19 crisis will be felt. Job losses could be steep and will affect low wage marginalized workers," he said.

Their employers will face difficult choices for controlling costs in response to revenue declines, and these workers do not have the option of working remotely.

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Many of the people who work in these roles are minorities, immigrants, women and young people; an estimated two million workers who have limited financial resources to cushion the impact of lost wages.

Some are part-time or work seasonal jobs who face the risk of not being eligible for employment insurance.

The Conference Board expects the decline in economic activity will result in the weakest year for Canadian economic growth since the 2008 financial crisis.

How bad, is not yet known, but a “full-blown recession is even possible,” said Burt.

Other key sectors to be impacted include transportation, oil and gas, and manufacturing.

“These are where the impacts of layoffs and lost labour income will be most pronounced,” he said.

Burt said the good news is that government policymakers are responding.

Ottawa rolled out an $82-billion COVID-19 economic response plan on March 18 directed at vulnerable populations. These include increased employment insurance eligibility, Canada Child Benefits, and GST credit payments, and new programs aimed at those who would not be eligible for employment insurance.

Other employer-targeted programs include wage subsidies for small businesses and extending the eligibility of the work-sharing program.

Burt said policy makers may learn from the current crisis.

“Programs put in place to help the most vulnerable could become permanent additions to our social safety net. This could be an important consideration in a world where precarious work is more common, and technology is disrupting the skills and occupations requirements of the workforce.

“Workers will need a friend in transitioning through the current economic crisis and the longer-term trends affecting more marginalized workers.”