How an Inhospitable Labour Market Increases Homelessness

By Joe Mancini

Published September 2025

Homelessness and an Inhospitable Labour Market

Canadians are asking why the number of unhoused people has grown steadily over the past ten years. In Waterloo Region alone, there are over 2371 people are unhoused.

It is widely agreed that the homelessness crisis is the result of poor housing planning. The supply of housing has not kept up with demand, causing rising housing prices. At the same time, housing became coveted as a commodity, which has added to inflated housing costs. Currently, a significant portion of the population cannot even dream of paying the sky high mortgage costs, which then translates into unaffordable housing rents that the average worker’s wage can barely cover. For 30 years, Canada has built minimal affordable housing and did not renew the existing social housing. The population of Canada has grown rapidly with little effort going into building an infrastructure to match population growth with affordable housing.

Yet, what this analysis misses is the simmering social and economic phenomena of a degraded job culture. Homelessness is more than a warning of poor housing policy, it is also a warning of a work culture that undermines the dignity of workers.  

The trend to an inhospitable labour market started in the 1980’s. It was a time of high unemployment when companies started implementing higher levels of temporary and part-time work. This was the beginning of wage stagnation that continues 30 years later. Social benefits like Unemployment Insurance became harder to access while offering smaller benefits. Labour unions were under pressure to make job concessions. Companies added automation technologies to reduce labour costs which continues to reduce low-skilled factory employment. Minimum wages were kept low. On top of all that, it was a time of deindustrialization as factories were forced to close as production moved to lower-wage regions around the world.

These were the conditions from which The Working Centre’s Job Search Resource Centre on Queen Street was established. A study we conducted in 1987 using the local Canada Employment Centre job board found that of the 500 jobs advertised, over 75% were minimum wage jobs which, even at that time could barely cover rent. In a seven year period, The Working Centre was involved with 15 local factories that had stopped operating and laid off their workers.

The resource centre specialized in helping workers on the edge of the labour market. A 1995 article quoted a worker who expressed a common experience:

“They are pretending the working poor and people on social assistance are two different species of humans […]. But all of us stuck in the nonstandard workforce are constantly cycling in and out of welfare […]. They seem to think the jobs are out there and all we need is a kick in the butt to get us off welfare and into the job market.”

Today our Job Search Resource Centre supports thousands of workers each year, all of varying skill level but most will settle for low-skilled work when other options fail. The circumstances that the majority of job searchers face are not well understood, as those least able to compete are mostly hidden, trying to make ends meet, living by survival jobs. While the preference is to follow paths with more long-term opportunities such as entrepreneurship, skills retraining, or gaining access to post-secondary education, the vast number of people dealing with unemployment are not able to pursue such paths as they must focus on making ends meet.

The Contingent Labour Force

What does the labour market look like when you are discouraged and viewing it from the bottom rungs?  It is not very comforting. It is a hard business activity with thousands of job searchers trying to get hired at any one time. The majority of jobs are in the private sector where jobs come and go on a quarterly basis depending on sales and profits. A business may have a hard time hiring for a specific skill, but at the same time they may have up to 400 applications for any job they post. The labour market is always over supplied by thousands of people.[1]

When considering how unemployment is measured, those who are involuntarily out of work or who are discouraged workers are not counted. Their odds of getting work are slim, but they would proudly be part of the labour market if they could land a job. They want to work but give up trying because of the many rejections they receive. They come to this conclusion bitterly.

The rejections they receive can come from discrimination because of race, sex or religion. They can be based on their situation such as being a stay-at-home parent, having a disability, having a chronic illness, having been incarcerated, or dealing with mental health issues. All of these factors are part of a hidden criteria that makes it impossible and highly discouraging for some people to even job search.

It takes some calculating to understand how large the contingent labour force is. You have to start by including the number of discouraged workers, the number of unemployed and those who work in temporary/part-time jobs who would rather work full-time. There is another group, about 50% of those self-employed who only earn minimal income and would do other work if there were opportunities available. An analysis that includes these numbers finds that fully 30% of the labour market is made up of individuals who marginally participate in regular work. This group is under constant stress to make ends meet.[2]

It is also important to understand that those on social assistance such as Ontario Works and the Ontario Disability Assistance Program are not even counted in the labour market. In Waterloo Region there are 20,810 individuals or families on these two forms of social assistance which is another 6% of people who are on the outside of the labour market, often trying to get in.

Jeff Rubin, former chief economist at CIBC, takes a harsh view of the burden placed on those at the bottom of the labour market. He notes that focusing on GDP, the stock market growth and a seemingly low unemployment rate, only masks the reality on the ground. Those just holding on to jobs know what is going on, they “are aware that none of these conditions have trickled down to them. Instead they face unprecedented economic precarity at their workplaces.”[3]  

Paulina R. Tcherneva is even more trenchant when describing the labour market as “a cruel game of musical chairs. In fact it is worse, because many unemployed people cannot find a chair (i.e. paid work), and if they do (especially in the low-wage sectors) they are often discriminated against, harassed, subject to wage theft and under constant threat of losing their jobs and benefits.”[4]

How long term unemployment fuels growing homelessness

When St. John’s Kitchen opened in the early 1980’s, those who came for a meal were former workers that still had expectations that they could find new jobs that paid close to a living wage. Many of the resumes we typed up described their extensive factory work. Only a few were homeless, most lived in rooming houses within a kilometer of the Kitchen.  

The change over 40 years could not be more stark. Society has created a large group of contingent labour workers that are sinking, right before our eyes, into homelessness as their social supports are strained and decline.

People do not just reject the labour market. Rather, the labour market rejects those who cannot maintain full connection. Former workers with less and less attachment to the labour market become highly discouraged. The few resources they have are stretched thin – they lack money, housing and food – all they can do is survive. If they struggle with mental health or have a  physical disability then their situation is even more limited. If they do not have family to fall back on, or have alienated their family (which is often a result of their struggle) then their situation is even more precarious. Some are lucky to attain social housing which is a minimum base for survival, otherwise with rents so high, without housing an individual finds themselves on the street.  

Contributing to discouragement are studies which show that long term unemployment creates significant health costs because,

“people are sicker, make more trips to the doctor and spend more on medications. They have higher rates of alcoholism, physical illness, depression and anxiety. Around the world metadata studies examine the effect of unemployment on several variables of mental health including mixed symptoms of distress, depression, anxiety, psychosomatic symptoms, subjective wellbeing and self-esteem. All these combine and complex health effects create a vicious cycle that makes it harder for unemployed people to reenter the labour market.”[5]

Case and Deaton in Deaths of Despair document how the evaporation of manufacturing jobs has weakened large sections of the working class. “Workers have had to move into less desirable, more casual work, more in services – healthcare, food services, cleaning, security – and less in manufacturing. The decline in commitment by employers is only matched by the decline in commitment by employees”[6] Worker dissatisfaction is rooted in the minimal potential for personal growth, while experiencing an economy that rewards certain types of higher education. Those left behind, not only feel resentful, they feel the frustration of jobs in the service industry that do not have the dignity and quality that factory jobs formerly provided.   

The labour market is not stable, and the experience of it is often called the yo-yo effect. Since there are not a surplus of jobs, an unemployed worker may finally find work, and get into the rhythm of working each day. Unfortunately, that same worker is likely to be the first to be laid off when economic conditions change. This yo-yo effect produces high levels of discouraged workers bursting with frustrations.

It is at the point of hopelessness and despair that some people can fall into drug use. The process is well documented. The drug system is a mechanism of capturing people and if the individual caught in this trap does not find supports, it can lead to breakdown. A discouraged worker with a physical injury can easily fall into substance use which can lead to even higher levels of debilitation as users start to lose relationships and their physical health is severely compromised.  

A subset of this cycle is that drug addiction can lead into drug distribution. People want to work, people want to earn money and for some, drug dealing becomes their only option. But it is not the kind of work that builds dignity. Drug dealing usually leads to greater addiction and gang involvement. Over time the desperation leads to jail sentences. Yet initially it pays some expenses. Breaking this cycle would require real and consistent supports to ensure that workers always have access to jobs in the regular economy.

The harshness of the labour market and unemployment create difficult personal and health conditions that prevent a person from escaping it. The isolation of unemployment compounds a multitude of social problems. Joblessness reduces a person’s social networks and reduces community participation that can be a bridge to re-employment. Breaking this cycle would require real and consistent supports to ensure that workers always have access to jobs in the regular economy, which would also address the long term social and health costs of the underground drug economy.

Expanding Opportunities for Work

The contingent labour force has intensified job alienation and, 40 years later, this process is contributing to growing homelessness. At the same time, the increasing sophistication of AI systems and automation seem to be continuing these trends we have observed on the ground. The next ten years could see even more dramatic job disruptions for workers. This will mean more people excluded from participating fully in society. Encampments are a clear example of this process, as they can also be described as places where workers, whose barriers to employment over time have left them marginalized from society, gather to use survival skills to stay warm and live with others.  

As we reflect on these 40 years, it is clear that a labour market that excludes those less able to compete is an approach that undermines social solidarity. The task is greater than just providing an annual basic income, the task is about creating meaningful participation in the building of society. When that is missing and people are left without work, dependent and in survival mode, it becomes, in the words of Ivan Illich, a cruel form of “modernized poverty”.

When workers are excluded from productive work, they become rootless, minimally attached to values that would give shape to community living. Rather than participating in society where community bonds are strengthened through shared work, workers disconnected from meaningful labour are forced to see their struggle for basic needs as an affront, a breaking of trust, and a realization that society has little to offer.  

There are no lack of opportunities for good work, but it takes a societal commitment to develop and build these opportunities. It is a simple and beautiful goal to enable communities of workers to intertwine labour, craft and community improvement to generate meaningful work.  Work, held together through craft, has always enabled the common good to flourish with a combined sense of limits and aspirations of what can be accomplished together. Workers long for opportunities to truly express their creativity and skills. Presently society is going in the opposite direction and homelessness is an obvious symptom of this wrong turn.