Volume 40, Number 3: May/June 2006

The Impact of Privatization on Women

Privatization is not gender-neutral. It threatens advances toward women’s equality in the labour market and in the home.

In the labour market, privatization usually means lower wages for women workers, fewer workplace rights, reduced health and welfare benefits, no pension coverage, less predictable work hours, more precarious employment, a heavier workload and generally more exploitative working conditions.

Privatization is a term that encompasses many specific practices. Generally it is used to refer to the transfer of work from the public sector to the private sector. But it encompasses much more than that, including the transfer of work from a public, paid realm to the private, unpaid realm of the home. This may be the result of cutbacks in public services or the failure to have those services grow and expand to meet growing needs.

In the labour market, sub-contracting is one of the most common forms of privatization, whereby a private company is awarded a contract to perform work. Sub-contracting is common at all levels of government in Canada – by the federal, provincial and local governments – where the responsibility for work or services is transferred from the government to a private company.

Outsourcing is another term for sub-contracting. It differs from privatization only in that it does not involve transferring work from the public to the private sector. It involves a transfer of work from one private-sector body to another, for the same reasons that privatization occurs.

Why the Drive to Privatize?

Privatization (and outsourcing) is pursued to lower costs, especially labour costs. The decision is often justified by claiming that certain services and the workers who perform them are ancillary or not integral to the core service or function. For example, the Romanow Commission on health care, which was very critical of private health care, considered it acceptable to privatize health-care services (cleaning, food, laundry) on the grounds they were ancillary and not an integral part of the health-care delivery system. And the recent decision by General Motors to lower labour costs at its Oshawa plant by sub-contracting custodial work is based on this same logic. This logic and assumptions behind these decisions are faulty and have serious consequences for workers, especially women workers and women workers of colour, who are too often employed in the low-end jobs. Research examining the largest case of privatization in Canadian history revealed how disastrous this policy is for these women.

Contracting Out in B.C. Health Care

Sub-contracting of support services in hospitals and long-term care centres in British Columbia in 2003 and 2004 represented the largest wave of privatization in Canadian history. About 8,500 cleaners, food service, laundry and security workers employed by hospitals and long-term care facilities in the lower mainland and southern Vancouver Island lost their jobs to contracting out between October, 2003, and July, 2004.

These workers had been represented by the Hospital Employees’ Union, the B.C. health division of the Canadian Union of Public Employees. As a result of building a strong union prepared to take strike action when necessary and a history of addressing low wages for women workers, the HEU had achieved good wages and benefits in their collective agreement. The International Woodworkers of America (IWA) negotiated a sweetheart deal with the private contractors to represent the contracted-out workers.

When the jobs were contracted out they went from being the highest-paid hospital housekeepers in Canada to the lowest-paid. Their wages were cut from almost $20 an hour to $10.50 an hour. This represented about a 30-year rollback in their wages, according to calculations by Professor Marjorie Cohen. And thousands of individuals, mainly women, lost their jobs.


Other important workplace rights and benefits were also cut through contracting out. The pension plan was eliminated. Vacations were cut back from a level of 20 days after five years with one additional day for each year of service, to the minimum legally allowable, the Employment Standards Act requirements. Seventeen weeks paid parental leave was eliminated. Benefits were cut for those with less than 20 hours of work per week. Those who worked enough to qualify for benefits now faced co-payment of the premiums. The Long Term Disability plan and injury-on-duty leave were eliminated. An accumulated sick-leave plan based on 1.5 days per month was cut back to two days sick leave every six months, with no ability to accumulate leave.

As well, the scheduling of work hours became far less predictable. The HEU contract had provided 14 days notice of change based on seniority and position, with overtime payment for changes in work hours. The collective agreement, negotiated by the IWA for the sub-contracted workers, provided no guarantee of work hours, no schedule and no overtime for changes to work hours. Unpredictable work hours wreak havoc with planning childcare or time with family and friends.

Exploitative Conditions for Contract Workers

Workers interviewed under the new sub-contracted regime disclosed intense, exhausting and hazardous workloads. One woman worker reported: “For the last couple of months I haven’t taken the last 15-minute break.” Another said: “If I take my 30-minute lunch break I will never finish the job. I either stay longer or rush to get it done.” A third woman explained: “If the work is not done, you’ll be fired because of complaints. The contractor pushes us to do too much. It’s abusive.”

Despite the conditions, many workers wanted more hours of work, because half of those interviewed worked between 20 and 37.5 hours per week – a twilight zone between full- and part-time. Few hours combined with low wages meant pay was inadequate. Most lived far below the poverty line, and almost half of the workers interviewed had at least one other job.

The sub-contracted workers complained of exhaustion and pain. All but one of the 24 workers interviewed reported adverse health impacts, like soreness, stiffness, numbness, migraines, pulled muscles, cuts and burns – and this was in the space of less than one year of working for the private contractors. Despite these serious health complaints, about half did not take sick time, either because they were afraid they would lose their job or because they could not afford to be given few paid sick days.

One woman in her forties said she couldn’t see herself working to age 50 because the job was just too heavy. “Every day, because of the workload, I feel like I’m going downhill. I’m just so tired.” Another 40-year-old single mother with two jobs said, “I’m flat down when I go home to bed.”

Afraid to Speak Out

Depressed, angry, upset and frustrated were how these women felt working under these conditions. These feelings were most severe for those who were former HEU members and had experienced a big drop in pay, an increase in workload, the loss of many workplace rights, and who missed co-workers and better relations with their former supervisors.

Despite these feelings, their anger and stress was locked inside. As one women said: “I get quieter. I don’t want to talk to anybody. Sometimes I cry. I feel like I’m going to explode inside. I disagree, but listen and don’t say anything.” Another woman revealed, “I feel angry but try not to show it, because I’m scared for my supervisor to know. I can’t lose this job.”

Impacts at Home

Not surprisingly, their feelings about work spilled over into their home lives. One woman lamented that there was “not enough time to spend with the children. I have no energy. I just go home and sleep. I’m tired and don’t want to have friends over. I ask my daughter to do things, but I couldn’t give her a birthday or even buy gift for her.”

These women experienced tremendous guilt for not being able to spend time and energy with their families or not being able to provide the things their children wanted.

Their kids had to do without, many started working as adolescents to try to help the family, and older ones had to give up plans to go to school in order to find work. Recreation and holidays were cut back and some were forced to move to find cheaper housing.

The women interviewed working in these sub-contracted jobs were mainly immigrants, and the impact of their work affected their extended families abroad. Despite their difficult conditions in Canada, many continued to send money to support their extended families, members of which needed the money to survive or continue in school with the hope of immigrating once they graduated. As one woman, who was now working at three jobs to make up for her former HEU salary explained, “We send the same amount of mo-ney now, even with a lower income. We need more jobs to make up the difference. Even then, it’s still not enough money for them. They don’t understand the situation here.”

This case study of privatization reveals many adverse implications for women. Privatization eliminated thousands of good jobs for women, replacing them with exhausting and dangerous work by rolling back wages and other important workplace rights gained over 30 years. It consigned immigrant women of colour to these exploitative conditions, reinforcing them in a role of second-class citizens at work marked by divisions on the basis of race and ethnicity. It generated more domestic conflict and sacrifices for their children, and undermined their own ability to participate in community and civic activities. In short, it made it harder for these women to get ahead in the workplace or at home.

Privatization Means Greater Inequality

This case study reveals that privatization and contracting out leads to greater inequality. It widens the gap in wages, workplace rights and working conditions between one group of workers (the so-called ancillary workers whose jobs are subcontracted) and the remaining employees. It reinforces poverty for visible minority, immigrant workers, who tend to be employed in such jobs given their higher rates of unemployment and fewer options for work. Fewer workplace rights, exploitative, exhausting work and low pay create conditions for the social exclusion of these workers, reinforcing sexual and racial divisions in society.

The good news in this case is that the B.C. Labour Relations Board struck down the weak collective agreements that the IWA had signed with the private contractors on the grounds that there was no worker input or ratification. And the HEU was successful in organizing these workers and signing a new collective agreement that improved their wages and workplace rights. But the new collective agreements did not regain all of the lost ground, and it is still a long road back to the standards these workers previously enjoyed.