Ask and you shall receive. It’s no wonder Canadian corporate CEOs are feeling so emboldened. They have never had it so good. They sit on nearly $600 billion in hoarded cash. They continue to use the fragile economic recovery, where they can, as a weapon against workers, while raking in record profits and paying themselves staggering bonuses.
And they have a very powerful ally in Finance Minister Jim Flaherty. A minister only too happy to do their bidding.
You want billions in tax cuts? No problem. You want the government to take action to suppress the wages and erode the working conditions of Canadian workers? No problem. You want the federal government to raise the retirement age (to 67)? No problem. You want more foreign competition in certain sectors of the economy? No problem. You want us to lay off thousands of federal government workers? No problem.
You want us to attack unions? No problem!
This pretty much summarized the discussion during last year’s roundtable between Mr. Flaherty and some of the country’s CEOs as reported by The Globe and Mail recently. The Globe obtained — through an access to information request — the minutes of the 2011 summer retreat. (Thanks to journalist Bill Curry for digging this gem out and bringing it into the light.)
What CEOs demanded of the finance minister at this year’s meeting is anyone’s guess as these are closed-door, secret meetings.
I have written previously about the Harper government’s steps to suppress wages and erode working conditions. The measures include changes to the Temporary Foreign Worker Program that allow Canadian employers to pay foreign workers up to 15 per cent less than prevailing wage rates as well as changes to the employment insurance system which force the unemployed to take low-paid jobs.
The CEOs had the unmitigated gall during these closed-door meetings to complain of “overpriced” Canadian workers. They must revel in the fact that their minister of finance does so little to challenge them, but then this is the same minister who arrogantly told Canadians that there was no such thing as a bad job.
As Canadian Labour Congress chief economist Andrew Jackson points out, the facts about wages say something different. Other economists have made the same conclusions.
“The reality is that the pay of most workers has stagnated in real terms over the past 30 years as the profit share of GDP has increased at the expense of wages, and as wages have become much more unequal with more and more of the total wage and salary bill going to the top one per cent made up mainly of senior executives,” says Mr. Jackson.
In other words, after inflation, Canadian workers are barely doing better than they did 30 years ago. The main difference for families is the fact that in the vast majority of cases, two incomes are coming home.
Mr. Jackson also highlights a recent Statistics Canada study that tracks the stagnation of real hourly wages between 1981 and 2011.
Over that time period, the average hourly wage of full-time workers grew by just 14 per cent, and that includes the one per cent of income earners. In the meantime, real GDP grew by over 50 per cent per person.
What that means is that workers are taking home a smaller and smaller share of the GDP pie, while the corporate share continues to grow. Government policy has contributed to this unfair sharing of the country’s wealth.
We see this in our own province, despite wage growth in the last decade. Prior to 2005, Newfoundland and Labrador could be described as a low-wage economy with over 30 per cent of our labour force earning under $10 an hour. And yet despite some wage catch-up in our province, a massive share of our GDP is siphoned off into corporate profits, over 25 per cent on average in the last decade, compared to 14 per cent nationally.
More of our GDP goes to corporate profits than any jurisdiction in the country.
As Mr. Jackson points out, the view that wages are “too high” is to say that workers have no right to share in rising national income because it should go, instead, to profits and senior managers.
It also, of course, misses the point of what makes our economy tick. Consumption, or the ability of workers to purchase goods and services, remains a critical factor in the economic health of the country.
As Canadian Auto Workers economist Jim Stanford pointed out last week during a presentation at his union’s convention, workers, the victims of the economic and financial crisis, continue to be blamed for a crisis they did not make. And now employers continue to use that crisis to beat back worker expectations and, in turn, erode economic growth.
“The worse global capitalism performs, the stronger and more aggressive its proponents seem to become. It truly is an upside-down world,” Mr. Stanford noted.
And the proponents are getting plenty of help from Mr. Flaherty
and his government who have embraced austerity and attacked social programs like Old Age Security, while delivering the goods to corporate Canada.
Canada’s finance minister should be more than a patsy for the country’s CEOs. Unfortunately for Canadians, driving down wages seems to be Mr. Flaherty’s new hobby.
Lana Payne is president of the
Newfoundland and Labrador Federation of Labour. She can be reached by email at email@example.com.
Her column returns Sept. 8.