Differences that Matter, Social Policy and the Working Poor in the United States and Canada, by Dan Zuberi, Ithaca and London: Cornell University Press, 2006, 230 pp., ISBN-10: 0-8014-7312-8 and ISBN-13: 978-0-80-147312-8

This is a well-researched comparison of how differences in social policy between the United States and Canada affect the economic security and well-being of mainly immigrant, low-wage, service industry workers. Throughout the book, Zuberi first compares social policies between the two countries and then, through the use of structured, but open-ended, interviews, examines how these policies are experienced by the working poor. In order to make the comparisons as close as possible, the sample of 77 workers is drawn from the housekeeping, maintenance engineering and guest services departments of two hotels in Vancouver, British Columbia and two in Seattle, Washington. Two major hotel chains (with pseudonyms Globe Hotel and Hotel Deluxe) are represented, each having one hotel in Vancouver and one in Seattle, one unionized hotel and one non-unionized hotel. Of the sample, 40 were from Asia or the Pacific Islands (Chinese, Filipino, Indian), 26 were of Caucasian origin (either immigrants from Europe or native-born), 6 were Hispanic and 5 were black (Seattle only).

Legislation and public attitudes concerning unions and health insurance policies are the main elements analyzed but Zuberi also looks at differences in social welfare policy as well as public investment in urban infrastructures. As Zuberi explains (p. 19), while both countries are classified by Gøsta Esping-Andersen as “neoliberal welfare states”: “The United States and Canada had very similar economies and levels of stratification after the end of World War II. Despite undergoing an almost identical shift from a largely manufacturing-based economy to a service-sector-dominated economy over the past fifty years, Canada has not experienced the rise in relative household policy or inequality that the United States has.”

His hypothesis is that the differences in social policy explain the divergence in evolution. Taking inspiration from a number of sociologists and economists such as William Julius Wilson, Zuberi criticizes the dominant view that the poor are responsible for their situation, that they are lazy and incapable of saving. Instead, he ascribes poverty to their economic and social environment. Although there are a significant number of other studies that present micro-analyses of the working and living conditions of the poor, Zuberi claims his research is unique in that it marries a detailed study of real-life experience with a macro-analysis of social policy.

In the United States, union coverage fell from about 30% during the 1950-1970 period to under 14 percent in 1999. In Canada it first rose to about 40% and then declined slightly to 35% in 1990. Zuberi attributes the decline in the U.S. to unfavourable legislation and cites a number of studies disproving hypotheses that it is due to more hostile employer attitudes or to greater public disapproval of unions in the United States. In the United States, union certification requires an election after a lengthy campaign that allows employers to mobilize to counter union efforts. In Canada, certification is usually granted if the union has convinced a majority of the workers in the proposed bargaining unit to sign a card.

The Service Industry International Union or SIIU (pseudonym for the dominant union in the hotel sector in both Vancouver and Seattle) represents some 145 hotels in Vancouver but only 15 in Seattle although Washington is considered a union-friendly state by U.S. standards. Unionization is so prevalent that even the non-unionized hotels in Vancouver such as the Hotel Deluxe pay wages, but not necessarily benefits, comparable to those of the unionized hotels: close to $15 Can for room attendants, for example. In contrast, wages in both Seattle hotels were significantly lower and wages in the unionized hotel were about 20% higher than in the non-unionized hotel ($10.50 US vs. about $8.75 for room attendants) (p. 55). As other studies have shown, in addition to higher wages and benefits, unions are valued because they provide better job security and a grievance procedure that limits the arbitrariness of management decisions. Some managers even supported the presence of the union affirming that it reduces employee turnover and increases the professionalism of its personnel.

In Canada, basic health insurance is public, universal and free of charge. In the United States, working people must count on private health insurance provided by their employer. While both hotels in Seattle provided this kind of insurance, workers were not covered during their probationary period, during the extended layoffs which occur frequently in this kind of seasonal industry or when hours worked fell below a certain threshold. In Washington State some 15,8% of people had no health insurance in 1999 (p. 73). Overall, Seattle workers paid more for medical care and insurance in spite of getting less preventive care, being less likely to have a family doctor and sometimes deciding to forgo a doctor’s visit because of the expense. In addition, when a major illness strikes, the insurance coverage can be reduced or lost altogether if the illness means losing one’s job.

In Vancouver, both hotel chains also provided extended health benefits including dental care and prescription medicines after the probationary period. Because of the higher levels of unionization and the lower turnover rate, workers were less likely to lose even these extended benefits during economic downturns. Several of them indicated that they thought these health risks should also be covered by the public system.

Although Zuberi found it difficult to measure differences in health outcomes (for methodological reasons), it was clear from his interviews that the unreliability and the expense of health insurance and services in Seattle caused considerable financial strain and emotional stress for many workers.

Unemployment insurance in Canada provides a higher level of benefits, including a family supplement for low-income workers, compared to the Washington state program. It is also easier to access and the benefit period is longer although there is a two-week waiting period compared to only one week in Washington. Only 22% of laid-off Seattle workers, compared to 64% of Vancouver workers, reported receiving UI benefits because of the more restrictive requirements both to qualify for benefits and during the period of unemployment. A number also used UI training programs to enter the hotel industry at a higher skill level. Nevertheless, UI is one area in which Zuberi was most critical of Canadian policy, and particularly of recent or threatened cutbacks. The same can be said of social assistance policies: Canada’s are more generous that the American programs but recent cutbacks have greatly undermined their usefulness in combating poverty.

Worker’s compensation in case of work-related injuries or illnesses, family allowances, child-care and parental leave with benefits are also better developed and more generous in Canada than in the United States and contribute significantly to both family income, greater economic security and less financial stress. The more liberal rules allowing a person to withdraw money from a registered retirement savings plan in order to purchase a house or simply to tide them over during a difficult financial period also made a difference for the Vancouver workers. Lower tuition fees also make Canadian universities more accessible for the children of immigrant workers and contribute to their sense that the hard work they put in today will make for a better future.

In Vancouver the neighbourhoods in which the hotel workers interviewed live generally have better quality and more affordable housing, access to public transportation and very little crime with the exception of the downtown eastside. They also had lively community centres, accessible shopping, parks, swimming pools and reasonably good public schools all of which were scarce in the communities that immigrant workers could afford in Seattle. Part of the difference is related to the fact that Vancouver workers had higher incomes and could therefore afford better neighbourhoods. Nevertheless, in Seattle, even those workers who had managed to move into more middle-class neighbourhoods or into the suburbs reported problems with crime.

Zuberi proposes a long list of reforms corresponding to the deficiencies identified in the other chapters with a view to improving the quality of life for the working poor in the United States. For Canada, he warns that recent cutbacks in social policies and convergence towards the American model are likely to worsen the problems of poverty and hardship which are far from absent. He recommends reversing tax cuts and reinvesting in various aspects of social policies.

Overall, this book presents a solid contribution to our understanding of how the differences in social policies between the United States and Canada–most of which we understand intellectually but not necessarily from a ground-level point of view–actually affect both the day-to-day quality of life for the working poor but also the capacity of recent immigrants to integrate mainstream society. Hopefully it will provide useful ammunition in the fight to preserve social spending in Canada and to reverse trends in the United States.

As do most studies on the United States, Zuberi’s book begs the question of why the world’s richest economy has not only such high levels of poverty but also of urban decay and social conflict. What political and economic forces have imposed this model of society on a country that, until after World War II, was held up as the land of opportunity and upward mobility? It is to be hoped that Zuberi will use his systematic and rigorous methodology to answer some of these underlying questions.