Wednesday, 8 February 2017

Repeating history—the new need for unionization

For all Donald Trump’s failings, and they are profound and many, he deserves credit for one thing. He acknowledged the anger and despair of those Americans in the Rust Belt states and elsewhere who have seen stable, well-paid manufacturing jobs disappear in the millions. In their place are often low-paid, precarious jobs in the service industries. Trump’s insight carried him into the White House.

Our prime minister has also recognized this system failure. “What we’re facing right now,” he said in an interview with the Guardian “—in terms of the rise of populism and divisive and fearful narratives around the world—it’s based around the fact that globalization doesn’t seem to be working for the middle class, for ordinary people.” The loss of hundreds of thousands manufacturing jobs in this country has underlined his statement. The portion of Canadian workers in low-paying jobs is at an all-time high.

Economists talk about a new social class—the precariat: workers living a precarious existence due to a lack of job security, including part-time employment and low wages and benefits, stemming largely from the entrenchment of neoliberalism.

The loss of manufacturing jobs in both the U.S. and Canada is due to two forces: globalization and, most importantly, automation.

We can do a better job of globalization—trade agreements, e.g. NAFTA, have been focused on improving things for investors and corporations with trickle down benefits for the rest of us. Unfortunately, trickle down isn’t working. We need to do globalization with workers first in mind rather than corporations. There is, on the other hand, little we can do about automation; it has a momentum all its own. And despite Trumpian wishful thinking, jobs lost to automation aren’t coming back, from China or anywhere else.

There is, however, something we can do about the jobs that are replacing those lost in manufacturing. We can turn bad jobs into good jobs. I suspect that if you asked someone with if they would rather spend their time on an assembly line or working in Starbucks, many would choose Starbucks—if they could make a living. But that’s a big if. The retail sector has now replaced manufacturing as Canada’s biggest employer of both men and women, yet it is the worst paid occupation in the economy. It is characterized by low wages, unpredictable working hours, part-time work, and the need to juggle multiple jobs to earn a living wage.

That doesn’t have to be the case. In Sweden, retail jobs are desirable jobs. Their starting salaries are up to 40 per cent higher than ours, workers have a minimum five weeks paid holidays, receive overtime pay for weekends and holidays, and are entitled to generous parental leaves. Why the difference? In a word, unionization. Sixty per cent of retail workers in Sweden are unionized compared to twelve per cent in this country. We cannot simulate the strong union environment of Sweden but obviously greater unionization would go a long way to boosting working conditions in retail in this country.

After all, we did this before with manufacturing. Early in the last century manufacturing jobs were not all that great. Workers often toiled in dirty, dangerous workplaces for low pay and long hours. But unionization and appropriate legislation turned these jobs into the well-paid, stable and desirable jobs they are today. What unions did for manufacturing they can do for retail. We need to repeat history.

It is important as well, of course, to keep the other instruments of distribution strong—good labour legislation and a healthy welfare state.

Some critics will complain about raising the wages of service workers, complaining that they will raise prices. They will, of course, but when we steadily increased the wages of manufacturing workers did we find we could no longer afford to buy the products? The automobiles, the fridges, the TV sets? On the contrary, with higher wages, we had a more prosperous economy and bought more stuff. Today, we have twice the GDP per capita in constant dollars that we had in the 70s. We are richer than we have ever been. This is not a wealth problem, it’s a distribution problem.

Political parties have been doing good work for investors and corporations, with globalization, privatization, lower taxes and all the other accouterments of neo-liberalism, now it's time to do something for workers. Supporting unionization as avidly as they have supported trade agreements would be a good start. This country doesn't need rust-belt provinces.

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