Canadian Manufacturing

Workers face continued financial, physical hardships in wake of layoffs

CAW study finds workers suffering long after losing jobs



Laid-off auto workers struggle to find work, earn less money and often suffer from long-term mental and physical anguish, according to a long-term study.

Initiated by the Canadian Auto Workers’ (CAW) union in early 2009, the Worker Adjustment Tracking Study examined the difficulties some 260 union members faced—and continue to face—after job loss in the wake of the recent recession.

“We first undertook this study back in 20(09) to look carefully at what happens to workers after a layoff and over time,” said CAW president Ken Lewenza during a teleconference discussing study results. “The conclusions we draw offer damning evidence of an unregulated job market that is clearly failing Canadians.”

The study, which the CAW calls the first of its kind in Ontario, tracked the experiences of workers laid off from three automotive manufacturing plants in the province.

Workers from Collins & Aikman in Scarborough (closed October 2007), Kitchener Frame in Kitchener (closed April 2009) and Chrysler’s assembly plant in Brampton (third line eliminated in March 2008) participated in the study.

Phase one of the study—released June 7, 2010—examined what life was like for workers who were laid off and looked at the challenges they faced in retraining and transitioning to re-employment.

The recently-released second phase looked at what factors influenced the opportunities a sample of 130 of the original 260 laid off workers found two years later.

“Despite some slight gains on the job fronts, the point remains that we have lost (more than) 500,000 good-paying manufacturing and processing jobs in the last seven years,” Lewenza alleged. “Our union has argued over this time that the jobs on offer to fill the void are of poor quality, (and are) negatively impacting our communities and our collective standard of living.”

According to the study, almost one-half of participants reported earning at least $10 less per hour than in their previous jobs, while only one-third reported they found full-time work.

The study also found 40 per cent of participants to be working in the manufacturing sector.

“Losing a job and searching for work is a challenging experience for any(one),” said study author Sam Vrankulj, a lecturer at the McMaster University School of Labour Studies. “It’s particularly challenging for many of the workers taking part in this study (as) this is largely (an) older workforce with long tenure and relatively high-paying and stable jobs.”

Workers at the Brampton plant earned $33/hour at the time of the layoffs, while workers at the Kitchener and Scarborough facilities earned $30- and $19-hourly, respectively.

According to Vrankulj, the prospect of unemployment and searching for work was foreign to many of the study participants prior to their layoffs.

What’s more, the stress of financial loss or hardship burdened study participants in a variety of ways.

“We also looked at the impact of layoff over the course of the study and the findings strongly suggest that most workers experience significant financial hardship when they’re laid off,” Vrankulj said.

A majority of participants experienced a year or more of unemployment since their initial layoff, according to Vrankulj, and a number reported an extended period without any source of income.

Vrankulj said many respondents indicated they had a hard time meeting basic expenses as a result of the layoffs, including paying rent or mortgages.

“In most cases the financial impacts extended through the household and included eroding the quality of life for all family members,” he said. “Many reported that they managed this financial hardship through depleting their savings, retirement funds (and) selling homes and their vehicles.”

Of the 130 second phase participants, 63 per cent said they worried ‘a lot’ about paying bills, while 40 per cent said they had difficulty meeting debt obligations.

The health and well-being impact of a layoff also reverberated deeply with many participants, according to the study.

Almost half (47 per cent) felt depressed about what was transpiring, while another 45 per cent reported difficulty sleeping.

31 per cent of all respondents said their general health has deteriorated as a result of their layoff, while 26 per cent said the same about their mental health.

Another focus of the study was on CAW-established and provincially-funded action centres for laid-off workers to turn to in the face of prospective re-employment.

“The importance of action centres for laid-off workers is reflected in the really extraordinarily high contact and utilization of the services across all research locations reported in the preliminary findings,” Vrankulj said.

Laid-off workers visited these centres for a wide range of services, according to Vrankulj, ranging from basic labour market readiness supports (resume building, accessing job databases, etc.) to attending various workshops and accessing skills and education upgrading and jobs-related training.

According to the study, 91 per cent of workers enrolled in retraining programs graduated, while 82 per cent rated their experience as ‘good’ or ‘very good’.

A further 60 per cent reported their retraining led to re-employment, according to study results.

While the CAW pushes first to save threatened jobs, the study only reinforces the union’s perspective on the importance of support to help deal with the hardships brought on by job loss.

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