engineers or IT technicians. No matter their income level,
however, in most cases the workers receive a payment for
services but do not earn the health, dental, or pension benefits
that were once standard with many traditional jobs.
Some current policies provide firms with an incentive to
increase their outsourcing of workers. In many jurisdictions,
firms are legally required to provide similar benefits to all of
their workers, independent of their wages. Firms may respond
to such requirements by choosing to outsource their lowest-
wage workers, partly to avoid having to pay benefits. The firm
then hires outside suppliers to replace those services, but the
suppliers (or their workers) very often receive fewer benefits
than they would have received with the initial employer. In such
cases, the requirement to equalize benefits across workers has
the unintended consequence of more outsourcing and an
effective decline in benefits for low-wage workers.
What Are the Implications for Policy?
In Canada, as in many developed countries, social-insurance
policies were developed over the past 75 years during a time
when most workers were involved in traditional employment.
These policies typically accord privileges to employees,
including the right to earn a minimum wage, receive benefits
while unemployed, take minimum holiday and sick leaves, and
receive pension and health benefits. These same benefits are
rarely provided to self-employed individuals, partly because it is