Business

Kellogg's former London, Ont., workers struggle for good jobs

Settling for part-time work, or even commuting to Saskatchewan from Southern Ontario, can't really replace well-paying jobs lost when a cereal plant closed. The change is troubling, a bank economist says.

Loss of well-paid positions across Canada creates lower standard of living, BMO economist says

Michelle Ellis, a former employee of Kellogg's London, Ont., plant, searches for replacement work. She has settled for two part-time jobs, but her take-home pay has dropped substantially. (Bill Arnold/ CBC)

Six months after the iconic Kellogg's plant closed in London, Ont., eliminating 500 jobs, its former workers are still struggling.

Single mother Michelle Ellis has settled for two part-time jobs, her take-home pay substantially reduced.

"I was hoping to get a job in a different career path," she said. "And for a woman over 45, it's kind of hard to start. I'm not 19."
Stephen Barnes, who lost his job when Kellogg's London, Ont., plant closed, now commutes to a temporary construction job in Saskatchewan as he tries to hang on to the middle-class lifestyle. (Bill Arnold/CBC)

Stephen Barnes is commuting to a temporary construction job in Saskatchewan as he tries to hang on to the middle class lifestyle the Kellogg's plant used to provide.

"It's tough," he said. "When Kellogg's shut the door I wasn't going to let it take away my dream of retiring, so I had to find a job that was equal pay."

Those jobs are hard to find as the manufacturing sector in Canada is suffering. Workers at Kellogg's could make more than $30 an hour. Most of the jobs offered at the resource centre for unemployed former Kellogg's workers pay substantially less.

"The people that have found work are typically finding work for less money," said Phil Hames, the co-ordinator at the centre. "They are generally getting $20 an hour."

The 75-year-old plant closed last December. In August 2014, Kellogg's, the world's top cereal maker, reported a 16 per cent drop in profits.

In 2013 Kellogg's warned it would cut its global workforce by seven per cent.

Today London's unemployment rate is at an eight-year low, but economists say that is misleading.
Stephen Barnes walks through Saskatoon airport on his commute from London, Ont. (CBC)

"It really doesn't tell us anything about the quality of work," said Douglas Porter, chief economist at BMO. He called the loss of well-paying jobs manufacturing jobs troubling.

"In many ways London is very much typical of the manufacturing regions of the country," he said. "It means a lower standard of living for a broad segment of society."

Manufacturing in Canada, experts say, does have a future. But it won't look much like the past, when relatively unskilled workers could reasonably expect to make a middle-class living, often at one plant for their entire working life.

"We have to get used to the idea that manufacturing work is changing," said economist Paul Boothe at Western University. 

"We are not going to be doing the low-value manufacturing anymore," he said. "Manufacturing jobs in the future are going to be very high skilled."

That can mean fewer jobs, overseeing machinery in plants that are more automated.

Eventually, Barnes thinks, he will have to leave London.

A highly paid, solid manufacturing job has been impossible to find. "Those jobs are dinosaurs now."

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