Outsourcing Canada

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Canapathy Canapathy's picture
Outsourcing Canada

So Harper, Bush and other born again free traders have been telling us that free trade is absolutely necessary; and ever since Brian Mulroney, Canada has proceeded down that path.

Economists, paid by large corporations, have told us and our politicians that we are all better off if goods are produced in by the most competitive and then exported.  Each region should find its own competitive advantage and export it.

It sounds fine and dandy right?  Well then some obviously ignorant wretch asked, "Won't that ultimately eliminate all higher paying labour intensive jobs in any nation with a higher standard of living or better environmental and safety standards?"   

The economists for hire replied, "No, no you ignorant plebe.  Sure we will loose some of those dirty, icky manufacturing jobs but we will gain clean, high paying, technology and service jobs.  So don't worry your dim little mind and brush up on your computer skills."

Well now our politicians have given big corps what they want.  They can now take jobs away from expensive North Americans that demand crazy frills like decent wages, benefits, safe work environments, holidays, and safe disposal of waste products and give them to Mexicans, Indonesians, Columbians, etc. 

The governments of those nations truly understand big business and happily do the right thing.  They suppress wages, eliminate environmental and safety requirements and kill anyone who tries to improve the plight of workers.

Why should we care though?  Sure manufacturers are slowly but surely shipping formerly North American jobs abroad and then selling the goods back to us free of charge.  Sure, the bulk of the goods we buy are produced by the exploited, the mistreated and the impoverished, but hey t-shirts are a couple bucks cheaper.  Besides we have replaced all those higher paying, dirty, manufacturing positions with clean tech jobs right?

Unfortunately we have not.  Our friend the internet came along and revolutionized the way we communicate and send data.  Companies no longer need servers in their own offices.  They can rent cloud space for much less than owning their own equipment.  They can access their systems from anywhere with an internet connection.  What's even better is they can fire their IT, help desk and call centre staff as they are now part of the cloud, located in India. (How to save money by firing North American IT Staff)

So now that we are outsourcing our higher paying dirty jobs and our tech and communications jobs what do we do?  The same economists now tell us that we have to get more competitive.  Fat, lazy, North American workers are the problem and those damn greedy unions.
So we cut wages, give fewer days off, eliminate pensions and benefits.  Hell we are eliminating full time positions all together and replacing them with cheaper contracts.
What are the ramifications of this?  People have less disposable income, spend less, contribute fewer tax dollars and yet now rely on more public services.  People try to fight shrinking incomes with credit and now we have one of the highest debt to income ratios in the world.  
Another ramification is our politicians can't really force North American companies to be cleaner, greener and safer anymore because that will put them out of business entirely.

So here we are in 2009.  When adjusted for inflation average household incomes are virtually identical to those in the 1970's.  However, in the 1970's household incomes were generated by one wage earner 70% of the time and now household incomes are generated by two people in 70% of cases.  So wages are not just stagnant that are actually regressing.  Especially when we consider all of the other costs incurred when both adults work, like daycare an extra car, more expensive, more highly processed, less nutritious but quicker to prepare food.

I don't like this direction and the root of the problems seems to be free trade, between unequal nations.  

What do we do?  I have two ideas but would like to hear many more.   

1) By law corporations must seek to maximize return for its shareholders.  Maybe the corporate mandate should be changed to something a little more holistic.  

2) Nations must be given the ability to apply tariffs to any good produced in a nation with lesser safety, environmental and living standards.  Some say free trade will eventually lead to an increase in the living standards of the lesser developed nations we export our jobs to.  Won't tariffs based on environmental and safety standards ultimately lead these nations to improve faster?

Fidel

Thanks Canapathy. In the 1980's, Brian Mulroney promises Canadians "jobs, jobs, jobs" if Ottawa signed FTA.

Here are some interesting statistics, facts and figures from Mel Hurtig's book, The Truth About Canada:

Quote:

In most western European countries low-paid jobs are between 8% and 12% of the total; in Canada they make up 21% of all jobs.

During the first half of 2007, Canada's private sector dropped some 90,000 jobs, the largest decline in over a decade and a half.

In the five years before the Free Trade Agreement came into effect in 1989, employment in Canada grew at an average annual rate of 2.9%. In the five years from 2001 to 2005, it grew at only an annual average rate of 1.84%.

The 1990s saw the highest rate of unemployment in Canada of any decade since the great depression.