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XIV. 2005 BEST DISSERTATION COMPETITION
Differences Matter: The Impact of Social Policy on the
Working Poor in Canada and the United States
Daniyal Zuberi
University of British Columbia
It is 5:30 a.m. on an early spring morning
in the Pacific Northwest. Pigeons mutter, squawk,
and whistle outside bedroom windows on Capitol Hill. One
hundred and twenty miles to the north, the sun hits the
peaks of the North Shore mountains as the first buses
carry drowsy passengers on their way to work. In Seattle
and Vancouver, delivery trucks roll down largely empty streets,
as the workers on the morning shift prepare for the new
day. Both cities are carved out of the Pacific Ocean
rainforests—flourishing in frequent misty rains—in
valleys surrounded by towering snowcapped mountains.
Sujita Hassam and Karen Hsu are ethnic
minority immigrants who work for the Globe Hotel1—a
major multinational hotel chain—in Seattle and Vancouver,
respectively. Their stories illuminate some of the major
themes of this dissertation. They work at the bottom of
the labor markets of each country—in jobs that offer few
intrinsic rewards—for the same firm straddling an
international border that sharply demarcates two contrasting
social policy regimes. The United States, with its comparatively
weak welfare state and laissez faire tradition, and Canada,
with its history of strong safety nets and interventionist
social policy, offer divergent contexts through which the
working poor must navigate.
Sujita's Story
Sujita Hassam is a fortyoneyearold ethnic Indian woman who moved to the
United States from Fiji during the fall of 2000. After marrying Amit Hassam
in Seattle, Sujita Hassam found work parttime at a very difficult machine
operator job in a Tacoma area factory, where her new husband also worked.
"Oh it was very hard job," she recalled. "Everything do with the machine.
Cut every kind of rubber and everything. Press things and everything they
use in the roofs." She earned $8 per hour for her labor. Her husband
continues to work at the factory and also works a second parttime job
in a school cafeteria as a custodian. While Sujita Hassam is still "oncall"
at the factory, she decided she wanted more hours of work. First, she
found a new job as a room attendant for the LowCost Motel in Tacoma. She
only worked there for three weeks, earning $6.90 per hour. She disliked
this job because she was not able to secure enough hours and did not receive
a uniform. She also hated cleaning what she described as really "stinky"
rooms, particularly where people had pets living with them. She told me,
"They bring dogs and kitties and they put inside the room, and when you
go inside it smells very bad. Oh yea." So she felt fortunate to get a
new job at the Globe Hotel Seattle, where she said she enjoyed working
so far. At the same time, she was frustrated with the low wages paid
at her hotel. She said she thought that her job at the Globe Hotel would
be better if it was unionized because they would get regular pay increases:
"Why I think if union it would be better? If they work hard and after
1 year or 2 and they are only giving you like $7 and $7 [per hour], you
can probably use union for something like this." Only a small and declining
percentage of hotel jobs in Seattle are unionized.
Life for the working poor is stressful
in Seattle. Sujita Hassam's family rents a onebedroom apartment.
Maureen Hassam, her husband's daughter, sleeps in the living
room. She describes the apartment as "somewhat crowded,"
with leaks and roaches. The landlord continues to promise,
but not deliver, to spray the apartment for insect infestation.
He charges them a $70 fine if they are even one day
late on the $600 monthly rent. In the five months
prior to the interview, Sujita Hassam's family have been
late paying the rent four out of the last five months—incurring
$350 in fines—and had their phone cut off twice because
they could not pay their bill. Their utility bills add up
to $250 or more per month for electricity, garbage service,
and water. There is no room in their budget for any unexpected
expenses or extravagant expenditures. Sujita Hassam describes
paying the household bills as "very difficult." These
material hardships land on Sujita Hassam, despite the fact
that she and her husband hold multiple jobs. They regularly
borrow from Maureen Hassam—her husband's daughter—who works
thirty hours per week at Burger Barn, a fastfood franchise.
Amit Hassam also borrows money from Arthur Lowell—a coworker—although
they try their best to pay him back quite quickly. Living
on the edge financially was not unusual among workers
in Seattle, with many hotel employees reporting difficulties
making ends meet.
While her husband commutes to Tacoma by
car, Sujita Hassam takes the bus. On a typical day, she
gets up at 5:00 a.m. so that she can shower and prepare
for her husband and stepdaughter to leave for work and
school. Last year, Sujita Hassam estimates that she earned
only $7,000 before taxes and her husband $23,000—working
two jobs. Despite their low income, she tries to send money
and gifts back to her relatives in Fiji whenever possible.
Every few months, they donate a small amount of money to
their church and a local hospital.
Sujita Hassam lacks health insurance coverage.
Although the Globe Hotel provides health insurance benefits,
she is trapped in the new employee waiting period. Her husband,
Amit Hassam, pays $50 per month for health insurance, a
limited plan lacking dental coverage. Maureen Hassam, her
stepdaughter, is covered by a Washington state health program,
so she has been to the doctor and dentist in the past year.
But Sujita Hassam has no health insurance coverage, which
worries her: "Yea, I am worried. Because I am thinking if
I haven't got any [health] insurance and maybe someday I'm
gonna sick. And if I go to the doctor, I am going to have
pay a lot without the insurance." The family is very vulnerable
to financial catastrophe in the event of a health
emergency. Problems with health insurance coverage and accessing
health care were much more frequent in Seattle compared
to Vancouver. After three months Sujita Hassam qualifies
for health insurance coverage benefits for herself
but not for the rest of her family. If she switches employers
in order to improve her wages—as she and many working poor
hope to do—she will likely have to start again in terms
of waiting periods for essential benefits such as
health insurance coverage. As with most Seattle workers
without health and/or dental insurance, Sujita Hassam has
not received regular preventative medical checkups. Her
job benefits are meager; she is eligible for one
week paid vacation and six paid sick days this year. The
job benefits are less generous in Seattle than Vancouver
in part because of differences in labor policy that set
different minimum standards for workers in each city.
Hotel workers in Seattle lived in and around
higher poverty neighborhoods compared to those in Vancouver.
They experienced more problems with crime and greater feelings
of personal insecurity. Sujita Hassam's family lives southeast
of downtown Seattle, close to Rainier Ave. Their neighborhood
is close to shops. Sujita Hassam has noticed some "sketchy
in and out" activity next door as well as cars cruising
up and down the block (enough to scare her and cause her
to bolt the door). In the past few months, Sujita Hassam
has been the victim of petty thefts, which have left her
feeling personally insecure. Someone stole Maureen Hassam's
expensive pants from the dryer in the common laundry room.
Sujita Hassam dreams of buying a twobedroom
home. Her husband thinks they should move to a Tacoma suburb—closer
to his job at the factory but much farther for her. Despite
their hardships and insecure financial position,
Sujita Hassam is still optimistic about her future. Her
story illustrates the significant obstacles and hardships
facing recent, working, poor immigrant families in U.S.
cities.
Karen's Story
Karen Hsu is a fortynineyearold mother
with two teenage children who lives with her husband and
motherinlaw. She was born in Guangdong, China, and moved
to Vancouver, Canada, in 1980. In China she had only completed
two years of high school. She quickly took advantage of
educational opportunities after arriving in Vancouver;
she took night courses in English as a Second Language (ESL)
at Redlows High School from 1980 to 1985.
Karen Hsu's first job in Vancouver
was as a seamstress in a factory. After toiling for several
years—earning $3 per hour—in this difficult, lowpaying
job, she met her husband, Lee Hsu. Lee Hsu currently works
fulltime as an electrician and completes occasional handyman
jobs. They were married in 1983. Soon after, she was laid
off at the garment factory and began collecting unemployment
insurance benefits. A Canadian government program—
through Human Resources and Development Canada (HRDC)—paid
Karen Hsu's tuition and expenses to attend a sixmonth hospitality
training course while she was unemployed. Many immigrant
hotel workers I interviewed in Vancouver reported benefiting
from these federal training programs. Through the course
work and especially internship placements, these training
programs lifted many from initial insecure povertywage
jobs to more secure livingwage jobs.
A close friend of Karen Hsu's, Lucy Chen,
had recently begun working at the Globe Hotel Vancouver.
She recommended that Karen Hsu apply to the laundry department,
where a position had recently opened. She got the job and
began working at the Globe Hotel Laundry department at double
her previous seamstress wage—earning $6 an hour—and
held that job for nine years. During this time, the hotel
began outsourcing most of its laundry to subcontractors,
and the staff scrambled to find job openings in other
departments. Fortunately, Karen Hsu's hospitality certificate
and selection privileges under the union contract helped
her switch jobs within the hotel and secure a position as
a room attendant while maintaining her sevenyear seniority.
After years of regularly scheduled wage increases, Karen
Hsu currently earns $14.84 per hour and has generous extended
health and other benefits, including five weeks
of paid vacation per year. Labor policy organizing rules
in Canada and British Columbia—in contrast to the United
States and Washington State—create a context where a much
higher percentage of hotel industry workers are unionized
in Vancouver compared to Seattle.
When we met Karen Hsu had worked in this
establishment for twenty years and plans to continue until
she retires, "maybe work over there five or ten years,
retired." Unionbased seniority privileges allow Karen Hsu
to work two or three days a week during the winter low season
and fulltime the rest of the year. She described the job:
"Yea, it's a hard work but it's okay. If you want the money,
it's okay." Karen Hsu's story shows how stable unionized
positions in the service sector can provide workers with
mainstream, middleclass quality of life and resources.
Karen Hsu estimates she and her husband
earn a combined pretax annual income of $45,000. While
taxes are higher in general in Canada than the United States,
the income tax burden on the working poor is less in Canada,
especially for parents, because of generous tax credits.
Karen Hsu estimates they paid about $2,000 in taxes last
year and received a $200 refund. Karen Hsu's story contrasts
with Sujita Hassam's in ways that reveal how working poor
families in Seattle must rely much more heavily on personal
resources to make ends meet compared to in Vancouver.
In 1987 Karen Hsu and her husband purchased
a large fivebedroom home with a basement apartment,
about one block away from where they had been renting. In
Vancouver many singlefamily homes include a basement suite
or small apartment, which homeowners rent out in order to
help with their mortgage payments. The Hsus used to rent
this apartment out for $600 per month. Today, Karen Hsu's
motherinlaw lives in the apartment. Their neighborhood
is located southeast of the downtown core, close to Kingsway—where
many other hotel workers interviewed live. The Hsus live
in a classic split level, likely built in the late 1960s.
The rambling house provided what she describes as "just
the right amount of space" for her, her husband, their
two teenage children, and her motherinlaw. They have two
cars, a 1997 Geo Tracker and an older 1989 Chevy Lumina,
though she generally commutes to work by bus—a fortyfiveminute
trip each way. Karen Hsu appreciates the quality of life
in her east side Vancouver neighborhood and considers it
a good place to raise her children. The impact of public
infrastructure investment is obvious here. Karen Hsu's
neighborhood boasts community centers and other familyfriendly
institutions. Both Karen Hsu and her fifteenyearold
son Daniel Hsu think of their neighborhood as safe, and
the family has no plans to move in the next several years.
Like many immigrants, the Hsu family relied
on their extended family for childcare when their children
were young. While Karen Hsu and her husband worked, her
mother and motherinlaw as well as other relatives watched
after the children. "My motherinlaw, my mother and cousin.
My fatherinlaw. Everyone help. Everybody help me." When
I asked if she paid them, she replied, "No afford to pay.
I don't want to pay." Daniel chimed in, "Calling favors."
Karen Hsu's motherinlaw is unfortunately
now quite ill and requires regular dialysis; yet the family
has never had to worry about health expenses because of
Canada's universal health insurance. The Canadian universal
health insurance system mitigates financial stress
that otherwise might be provoked by health crises. The family's
regular doctor's office is located ten minutes from
Karen Hsu's home by car. She had recently visited because
of "shoulder pain" but does not have any major health problems.
In the past year she estimated that she visited the doctor
four to five times. Her son went to the doctor once
and her daughter twice. Although Canada's publicly financed
medical plans do not cover dental work, all of them had
recently been to the dentist for a teeth cleaning. The Hsus
report making small annual donations to the BC Children's
Hospital.
Though her job is fairly low skilled, Karen
Hsu perceived her family as being squarely in the middle
of the middle class in Canadian society, reflective
of a subjective sense of class location. In 1999 the Hsu
family went on a family vacation, touring China for one
month. With a paidoff home, rental property, and no credit
card debt, the Hsu's largest regular monthly expenses include
$200 for property taxes, $700 to $800 for food, $220 for
hydro (utility bills), $200 for life insurance, and $300
for piano lessons. They have about $3,000 in savings and
some retirement savings as well, but the majority of their
equity is tied up in their own home. Karen Hsu's story was
not unusual among room attendants and other hourly employees
interviewed in Vancouver.
Overview
How do social and labor policy differences
affect the quality of life and hardships experienced by
the working poor in the United States and Canada? Chapter
2 describes previous research on urban poverty and the working
poor as well as findings of U.S.Canada comparative
research. It also contrasts trend data on poverty and inequality
between the two countries since the mid1970s to show how
differences in social transfers explain these macrolevel
divergences.
Chapter 3 tells the story of my research.
It outlines the methodology of the Comparative Hotel
Employee Study. I begin by explaining why I chose to
compare the experiences of workers in Seattle and Vancouver.
Then I describe my research design, sampling, and procedures
utilized. Descriptions of the four hotel sites studied,
and the divisions of each hotel focused on—housekeeping,
maintenance engineering, and guest services—set the scene.
Chapter 4 focuses on the differences in
labor policy between the United States and Canada and the
impact of these differences on hotel industry employees
in Seattle and Vancouver. First, labor policy differences,
in particular relating to union organizing rules and procedures,
are described. These differences have resulted in a dramatic
divergence between the two countries in the past forty years.
What are the implications of this difference for hotel workers
in Seattle and Vancouver? Directly, unionized hotel jobs
provided better benefits, job security, and work conditions.
Indirectly, higher levels of union coverage in Canada have
translated into stronger labor force policy and other social
policies that help all lowincome workers.
Chapter 5 examines the impact of the differences
in the health systems of the United States and Canada on
hotel employees and their families. The large and growing
percentage of the uninsured in the United States is well
established. It stands at 14 percent of the population or
over 44 million people. Yet there has been little systematic
research on how health care policy differences matter for
the working poor. Maintaining continuous health insurance
coverage was a problem for many hotel workers in Seattle,
despite the provision of health insurance benefits
by the hotel. Why? The main culprit is the "waiting period."
The waiting periods for health insurance benefits
range from three to six months and were often longer for
family coverage. Over 25 percent of the employees in Seattle
did not have health insurance at the time of their interview.
Even with insurance, many found the employee health benefits
inadequate to prevent financial catastrophe. Fewer
sought and received preventative care in Seattle. In contrast,
the universal health care system in Canada decoupled financial
considerations from most health care experiences. The findings
suggest that the problems of the current health policy regime
in the United States go well beyond individuals simply lacking
health insurance.
Chapter 6 focuses on how differences in
social welfare policies between the United States and Canada
affect the quality of life and material hardships of hotel
workers and their families. What differences are most important?
In Vancouver unemployment insurance provides the most important
protection for hotel employees against material hardship.
In Seattle unemployment programs fail the working poor;
low replacement rate of benefits prevented unemployment
insurance from acting as an effective social safety net.
Unemployment benefits for hotel workers were well
below the income that could be earned in a minimum wage
job.
Few hotel workers in either city reported
relying on public assistance benefits, with the exception
of minimal support benefits temporarily received by
recently arrived refugees. In Vancouver other government
programs prevented hardships by providing financial
assistance directly or helping build up financial
resources in order to protect workers during economic downturns.
These programs include paid maternity leave, government
subsidized savings programs, worker's compensation, mandatory
vacation benefits, and subsidized daycare. A comparison
of income supplements for lowincome parents with children,
such as the U.S. Earned Income Tax Credit and the Canadian
Child Tax Credit, reveals that the current system provides
nearly double the supplement to similar families in Vancouver
compared to those in Seattle. In Seattle, without government
help, employees relied mostly on extended family or personal
resources as well as working multiple jobs to make ends
meet in difficult economic times. More also live with
extended families to make ends meet.
Chapter 7 examines how public infrastructure
investment differences— in transit, neighborhood, and community
institutions—affect the outsidetheworkplace experiences
of the hotel workers. The more egalitarian pattern of public
investment in Canada compared to the United States means
that income differences between families or individuals
do not dictate to the same degree the quality of life in
Vancouver compared to Seattle. More workers in Vancouver
were positive about their neighborhoods, almost uniformly
describing them as "nice." They had access to more institutionrich
communities, such as governmentfunded community centers.
Seattle employees did not report utilizing community centers
and other neighborhood institutions as much and described
more problems with crime such as theft and muggings.
Chapter 7 goes on to describe the cumulative
and interactive impact of these differences on how workers
saw themselves and their families in society and their
perceptions of what the future has in store for them. Fewer
hotel workers in Vancouver perceived themselves to be far
below the middle rung of the socioeconomic hierarchy compared
to Seattle. Workers in Vancouver with children were also
somewhat more positive about their children's futures.
In Seattle more workers expressed concern about their own
place in society as well as hope in their predictions of
their children's futures.
Chapter 8 concludes the dissertation with
a summary of the main findings and discussion of
their theoretical implications. In a global era, where branches
of multinational franchises are opening in cities around
the world, it is vitally important to understand the impact
of government policy on the lives of lowincome servicesector
workers and their families. Social policies directly affect
the quality of life and levels of material hardship experienced
by working poor families. The findings of the Comparative
Hotel Employee Study reinforce the importance of a multidimensional
analysis of equality as involving more than just income
and the central role of social policies in social stratification.
Note
1. All names have been changed to protect the study
respondents' identities. Allnames of hotel workers and hotel chains
as well as most other corporations and unions discussed have also been
changed to pseudonyms. All dollar amounts are listed unadjusted in the
currency of the respondent's residence.
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