That’s what ran through my mind as I read the initial stories about those Royal Bank of Canada employees who reported being ordered to train their offshore replacements before losing their jobs.
Not a new story. A friend who lives in British Columbia was obliged to take apart the machinery at the pulp mill where he had worked for most of his life and crate it up for delivery to China.
Same on the other coast. In the Maritimes they’re shipping fish caught by foreign trawlers in Canadian waters to China for processing. Then it’s shipped back to North American for retailing.
In each case we still get the products — just minus the jobs in the two last examples.
Whether these practices are a good or a bad thing, and for whom, is a matter open to dispute. Those who believe our salvation rests with public benefactors in the corporate world think it a good thing. Others have come to doubt that our salvation is best left to bankers, captains of industry and the politicians who serve them.
As you might have guessed, I am of the latter view. In Huxley’s Brave New World, I would have been a Gamma. Still, there are a few questions that even the Alpha-Plus people need to consider. The first is whether offshoring North American jobs is a good thing and again, if it is, for whom. After all, importing foreign labour is just completing the circle of that wondrous concept, globalization.
Let’s start with a concession. It is certainly a good thing for multinational corporations, a term Prime Minister Harper often confuses with the Canadian economy. They get cheap labour, malleable governments and a regulatory environment that is simpler than a Hells Angel’s tax return. In the United States, they also get jaw-dropping tax benefits from moving their physical assets, production and jobs overseas.
The principle benefit is the ability to ‘defer’ taxes on profits made offshore indefinitely. Once those profits are booked outside the country, they often find their way into tax havens in places like the Cayman Islands and Bermuda. As for the taxes the multinationals actually pay offshore, they are 33 per cent less than if they would have been if paid in the United States, according to a 2008 study by the U.S. Government Accountability Office.
Had Mitt Romney won the recent U.S. presidential election, things would have been even better for the multinationals. Romney wanted to make all profits made by U.S. companies in the offshore tax-free. His ostensible explanation was that if the corporations had more cash, they would invest it in the United States, thereby creating jobs. Creating jobs, even at 50 cents an hour, is the new gold standard of government intentions.
That’s a little like waiting for the trickle-down that never trickled from the days of President Reagan: Hans Christian Andersen politics peddled by the oligarchs to the credulous poor. In fact, corporations tend to do one of three things with tax windfalls: buy back stock, issue dividends or simply stash it. In the United States, it is estimated that multinationals are hoarding $1.7 trillion. Not much different here. Bank of Canada chairman Mark Carney recently chastised Big Business for doing the same thing with windfalls created by Harper government’s corporate tax cuts.
As for job creation being funded by offshore profits — it just doesn’t happen, here or in the U.S. Between 1998 and 2008, U.S. multinationals shed 1.9 million American jobs and added 2.4 million in the offshore. According to StatsCan, a quarter of a million jobs have been lost in Ontario’s manufacturing sector in the decade since 2002. Offshoring is part of the reason. Its actual effect is not just to get rid of jobs and benefits in costly jurisdictions: It also reduces real wages in the ones that are left.
Which brings us back to RBC, its wretched grave-diggers given an eleventh-hour reprieve, and all those fast food restaurants that can’t find Canadians sufficiently skilled to flip burgers. Once a country buys into the notion that corporations must move to other countries in order to be competitive, it is inevitable that the argument will be extended to the domestic workforce. If you ever want them to come back, you need to be more competitive — which is to say, you have to work for less money, fewer benefits and for longer periods of time if any shred of the social safety net is to be preserved.
One of the ways governments make that happen is through their ‘guest’ or temporary worker programs. In the United States, there is heavy corporate pressure to allow thousands more “guest-workers” to enter the country to fill low-skilled jobs in construction, agriculture and the burger joints. They say it will help with labour market shortages.
Even as rank PR, that is a steaming bowl of bad chilli. With 12.3 million Americans unemployed, including 25 per cent of job-seeking young people, and 50 million others on food stamps, there is no market shortage. There is just the lust to fatten profits by paying people the lowest wages possible — even if you have to bring them in from other countries to do it.
In Canada, the Harper government passed legislation allowing employers to pay temporary workers 15 per cent less than Canadian workers. Even though this country has 1.3 million unemployed, there were 338,000 foreign workers in Canada as of 2012. Is this about filling labour market shortages or just allowing corporations to fatten the piggy bank?
A final point of comparison between Canada and the U.S.: the demonization of unions. So-called “right-to-work” legislation is now a feature of 24 American states, including most recently Michigan. Under the new law, there is no mandatory union membership or initiation fee for Michigan workers. But non-union workers in a unionized workplace receive all the benefits and wages of their unionized colleagues.
It’s not about getting workers more money. It’s about beating sister states to the corporate business buck. It’s about Michigan worrying about Indiana, a race to the bottom. It’s also about driving more people out of unions. As President Obama himself put it, it’s not about the right to work, it’s about the right to work for less pay. Call it union-busting, 21st-century style.
For now, Canada doesn’t have Michigan’s right-to-work legislation. But with public funding of political parties, the Canadian Wheat Board and the Experimental Lakes Area already checked off the prime minister’s to-kill list, organized labour is now in the crosshairs.
This PM hates unions and wants them gone. That’s why he’s never met the CLC as a group since coming to power. (Chretien and Martin met them twice a year.) That’s why a succession of his labour ministers have stopped the process before ‘legal’ strikes could begin. That’s why Bill C-377, forcing unions to open their books and reveal how they spend their money, is on its way to the Senate, even though unions already provide an audit to every local. (Can’t wait for the bill covering doctors’ and lawyers’ associations, and for that matter, political parties, since they also have tax-free status and need to be accountable, right?)
That’s why the Conservatives introduced the Union Accountability Act, even though the Harper government itself operates like the Skull and Bones Society when it comes to making public information public.
The selling of multinationals moving offshore and the displacement of domestic workers like the RBC employees here at home are based on two marketing points; business-worship and labour-bashing. The labour-bashing is still fashionable among those who shed tears at the passing of Margaret Thatcher — public benefactors like Rupert Murdoch, who posthumously thanked the Iron Lady for freeing him from the chains of the unions the better to hack the phones of his compatriots. And after all, didn’t union members wreck the economy with their excessive demands and utter selfishness?
The only trouble with the oft-described excessive rewards and utter selfishness of the unions is that they have been eclipsed by an orgy of greed and dishonesty by the multinationals and their supporting cast of politicians, bankers and lobbyists. Companies bribing governments for business, politicians preaching austerity while holding offshore accounts they lied about, bankers fixing world interest rates, and financial institutions rifling the bank accounts of citizens when the rot can no longer be hidden and they simply need to steal the money.
The great irony of the moral collapse of the elites is their unfailing desire to deliver edifying sermons to the no-hopers grubbing for a buck. Goldman Sachs is an excellent example. This is the company that was fined $550 million for duping its own customers in the subprime mortgage scandal. This is the champion of the free market system that sucked up $12.9 billion of public bailout money to survive the financial debacle of 2008.
Still, its chairman and CEO found time to lecture Americans about the need to expect less, about the need to give up some social benefits, and the imperative for governments to change the way inflation is measured in order to reduce certain public payments to citizens that were tied to inflation.
When Lloyd Blankfein speaks, politicians listen, despite his company’s sordid business resume. Obama promptly obeyed by changing the formula for measuring the growth in inflation from a broad measure of the Consumer Price Index (CPI) to a narrow or “chained” CPI which will be revealed in his new budget. Bottom line? More than $339 billion over a decade is cut from federal programs tied to inflation, including pensions.
But there was one politician who agreed with Goldman Sachs even more than President Obama. Without warning, speaking from Switzerland, without having any supporting numbers from the department of Finance, Prime Minister Harper announced people would have to wait longer for Old Age Supplement checks. He also wiped out $34 billion in support for Medicare, as Canada’s premiers fully realized. Both measures violated promises made, however incrementally the cuts will kick in.
Which leaves us with the PM hurriedly announcing changes to the foreign workers program — which the CBC is reporting accounts for 29 per cent of the government’s much-ballyhooed new jobs — and a guy named Nixon making twelve million a year saying it was all a big mistake for which the bank is sorry. A banking error, if you will.
So glad RBC came to its dollars and senses.
Original Article
Source: ipolitics.ca
Author: Michael Harris
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