Political interference

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It’s a question of supply and demand: a few weeks ago, when Sony’s PlayStation 4 was released, a few savvy protobusiness types took the units they had purchased through pre-order and put them up for sale at high prices on the Internet. They were betting that shortages after the release could mean a price spike, courtesy of desperate parents needing that particular piece of equipment for a happy holiday.

Did the gambit work? It’s hard to say: the bootleg business operates in its own particular shadows, avoiding everything from sales tax to warranties. It’s easy to see that it could: why? Supply and demand. If you can’t get a game console because there are none available, those with consoles can set their price.

Theoretically, it’s the same with labour (even though labour is only one input into the creation of a product). If you need software engineers to design your new-style gaming console, and you can’t find any at the salary you want to pay, tough for you. You either pay the money or get into another kind of business.

Like coffee. Because in coffee, and a bunch of other businesses, our Conservative government is more than willing to take the very non-conservative step of interfering with supply and demand and instituting wage controls to protect one side of the equation.

How? By skewing the labour side, allowing temporary foreign workers to fill jobs, including at places like Tim Hortons and McDonald’s. Thousands of the workers are filling jobs that take no particularly great amount of education or training, but do require hard, time-controlled physical work at wages that are often at the bottom of the chart.

Other coffee shops still keep their employees, but without the benefit of federal sponsorship. Is that fair dealing for everyone in the same business? (We’re not really alone in the low-wage subsidy business: in the free-market United States, major retailers, paying low wages, have recently turned to counselling employees on how to register for federal food aid to make ends meet.)

So why exactly is a heavy-handed government intruding on the supply and demand model? Would the business world be happy if the government slapped price controls on coffee or legislated electronic banking fees (the ultimate gravy of the banking industry, a sort of “money for nothing, and cheques for free”) out of existence? “Leave the market alone,” the cries would be.

Companies using the workers argue they couldn’t stay in business without low-cost labour. You can sympathize, perhaps, but if your business model revenues won’t let you cover your costs, well, you really should be corporate roadkill.

Halfway through this year there were 125,000 temporary foreign workers in the country, some of them working at pay rates that Canadian workers obviously found to be not worth the work. All statistics suggest there will be more of the workers this year than last. There are even suggestions that the Tories are looking at bringing back rules that let employers pay foreign workers 15 per cent less than Canadian workers,

further warping the supply and demand equation.

Your jobs aren’t in demand? You might have to raise your pay rates.  It’s supply and demand, baby, supply and demand.

 

 

(Editor's note: this editorial has been edited to correct a mistake concerning the name of the manufacturer of the PlayStation 4)

Organizations: Tim Hortons

Geographic location: United States

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Recent comments

  • Vivek
    December 06, 2013 - 21:18

    I always wonder when bloggers become journalists. If you were a journalist, you'd have done some research. For example, a proper journalist would have done the following: 1. Checked the CIC website and verify whether its possible to get temporary foreign worker permit for a coffee shop job. 2. Since the answer would have been 'No', you'd have then checked how these 'temporary foreign workers' come here. (Obviously they were of another race, because usually these things don't get written about, for example, Irish plumbers or Spanish carpenters, who are coming in higher numbers due to economic hardships back home.) Could they be students, perhaps? That means they are not workers but students working part time. 3. You'd have then checked, among other things, what a foreign student requires to come into this country - what their fee is, what the government requires they show for a study permit, what education level they come in at, what they study, where they then go, which labour gaps they fill, etc., Lets put it this way - you'd have been a journalist and you would have written a very different 'Editorial'. Fail.

  • Barry
    December 06, 2013 - 18:12

    It's not only a case of the PS4 resellers naming their price, in fact it's more the case that buyers have been setting the price on online auction sites, others see the selling price and set theirs accordingly. $600-650 seems to be the the Goldilocks zone. At the moment.

  • Rodney Priddle
    December 06, 2013 - 04:51

    Sony makes the PS4, not Nintendo.