As we enter the second week of the strike between the City of Toronto and some of it’s workers, I’ve given some thought to the impact that strikes have on workers.
I don’t have enough knowledge of the facts to comment on whether the City is right, or whether the workers are right; in my experience disputes generally get settled when both sides see the other point of view, and reach a compromise.
My main concern is how a work interruption effects the average worker. Ask yourself this question: if I was to lose my paycheque for a week, or a month, how would I survive? Do I have enough cash in the bank to pay my rent, and to buy groceries, while I’m off work? For most people I meet, the answer is “no”. We all tend to live paycheque to paycheque, so missing one paycheque can cause significant financial stress.
When times are good, a missed paycheque is less of a problem. If I have access to credit, I can simply take a cash advance on my credit card, or my line of credit, to buy groceries and to pay the rent. But if you are already maxed out on your credit cards when an income interruption happens, you’ve got a big problem.
Here’s my advice for anyone who is worried about losing some income due to a strike, a layoff, or any time of job loss:
First, make a plan NOW for how you will handle a loss of income if it happens. Pay down your debt so you are not maxed out. Even better, pay off your debt and save money so that you have cash to get your through the lean times. Read my article on Five Tips to Surviving the Economic Crisis for more details.
Second, if you already have more debt than you can handle, make a plan to deal with your debts. Perhaps you can qualify for a debt consolidation loan to reduce the interest you are paying, so you can repay your debts faster. Perhaps a debt management plan through a not for profit credit counsellor is the answer.
If you have the ability to repay some, but not all of your debts, a consumer proposal may be your best option. If that’s not affordable, you may have no choice but to join the thousands of people each month who file bankruptcy in Toronto.
Strikes happen, and innocent people suffer the financial consequences. There is help available, so consider your options, and feel free to call my office in Toronto at 310-PLAN, or e-mail us for more information or to set up a no charge initial consultation.