Brexit & Trump: what their supporters have in common (and it’s not bigotry)

“The times, they are a changin’,” sang Bob Dylan way back at the start of the ‘60s revolution. Well they are changin’ once again. The Brexit vote shocked not only the markets and the debt rating agencies (both of which promptly punished Britain for voting ‘leave’), but it led to the resignation of PM David Cameron. There was a lot of “what have we done” second guessing the morning after.

It would be easy, as some in the mainstream media have opined, to think that the yobs who hate immigrants, especially if they’re not white, carried Britain out of the EU.

Yes, the leave vote was generally older, whiter, less educated and lived outside of urban centres, but not dramatically so. And yes almost all UKIP (UK Independence Party) supporters voted to leave, but so did chunks of Labour and Conservative voters. Besides, Britain’s working people have an honourable history of resisting racism and fascism. But, like both the Labour and the Conservative Parties, they too have blurred the lines between immigration, race, tradition and what really ails them.

You could say much the same about Mr Trump’s supporters. They too are older, less educated and largely working class. But it would be equally foolish to tar and feather them with the same race-baiting brush we might use on the Donald. Many of them are working class Democrats who would have voted for Bernie, but will now vote for Donald J.

$ Reagan laughs

Ronald Reagan & the boys whoop it up back in the day when it all started to come apart.

What the Brexit voters and the Trump supporters have in common is betrayal. They have been betrayed by the very people who have said they “feel their pain.” For the past two generations they have been promised that work and money would trickle down to them; that free trade deals like NAFTA (and now TPP) would provide them with a good job; that if you work hard, serve your country and pay your taxes you’ll be alright.

Well, that’s a load of horse-spit, isn’t it? Workers in both England and America have lost real wages. Some have lost their homes and their health. They watch their political leaders bail out bankers and know their CEOs make in a day what will take them a year to earn. The good union manufacturing jobs are gone, replaced by precarious service jobs. And still they’re told they’ll have to make further cuts to salaries, to pensions to health care.

The Brexit vote last June was as much a revolt against this neoliberal agenda as it was about anything else. There is no party in the UK who can give the disheartened a voice – not the Conservatives under Thatcher-lite Theresa May, not Labour if they come up with another leader like Tony Blair, and especially not the UK Independence Party.

US DNC love-in

Love-in at the Democratic National Convention

The Presidential vote in November is shaping up the same way. The disenchanted and disinherited vs the established corporate and political elite. With Ms Clinton, the ultimate insider on one side and the Donald on the other, the contest could not be more stark.

This is not to say that Mr Trump is the great white hope of the working man – he’s not, despite his proclamation: “I am your voice.” It is to say that the Brexit vote and the Trumping of American democracy are really the same urge for escape from a political and economic agenda that has disadvantaged so many people.

You can see the same struggle in just about every democracy in the West: the rise (and co-opting) of the anti-austerity party Syriza in Greece, the quick ascendency of Podemos in Spain. But as the left resurges, so does the far right – the National Front in France, Golden Dawn in Greece, the nail-biter of an election in Austria where the fascist Freedom Party is contesting the result.

The interesting thing about this revolution is that it’s democratic – as long as the Hillary Clintons and the Donald Trumps and the Theresa Mays and their elite backers don’t co-opt it, which they will try to do. Expect Ms Clinton to signal left to win the election and then turn right in office – a very dangerous manoeuver both in traffic and in a precarious democracy.

$ Gap fr 1920 US vs CA

We in Canada should not feel smug. Large scale unionized manufacturing jobs are not coming back anytime soon. Most of our new jobs are precarious. And now that the oil patch is no longer propping up the middle class, expect to see the same fault lines start to appear here as well.


$ Sir JA 'rich in minority'


There’s always hope …

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Just the tip: Payday loan companies are the poster-child for what’s really wrong

Payday Loans Postmedia file

Postmedia file photo

If you’ve ever walked into a payday loan company to get something to tide you over to the end of the month, you’ll know you’re lucky if you come out with your shirt. It takes less than half an hour to get a $300 loan, but it can take years to get it all paid off. Ontario allows interest at 21% over the short duration of a payday loan. Add in fees and interest over a year and you’re paying north of 300%.

There’s a word for that: “usury” and it’s a practice that should have disappeared with fourth Century. Pope Francis calls it something else from the fourth Century: “the dung of the devil.”

He puts it into this context: “The new colonialism takes on different faces. At times it appears as the anonymous influence of mammon: corporations, loan agencies, certain ‘free trade’ treaties, and the imposition of measures of ‘austerity’ which always tighten the belt of workers and the poor.”

He’s talking about the unfettered pursuit of money world-wide and its consequence: the subordination of the sovereignty of nations to multi-national corporations. But he knows it’s always a short step from the global to the personal.

Colonized, or at least indentured, is how you feel when your two or three part-time jobs leave you in poverty; when even the food banks don’t have enough on their shelves; when you’re spending nearly half what you earn on a crappy basement apartment.

And to top it off, you’re subsidizing your boss. Or as Francis puts it, talking like a boss: “I will pay you this much, without vacation time, without health insurance … but I will become rich!”

Don’t worry, says government, the money will trickle down.

Recently Ontario tried to make things better. It sent around some options for legislation that would lower the short-term interest rate payday loan companies could charge from 21% to 19% or 17% or 15%.

In what world do the Liberals think this incremental, nearly infinitesimal change will make things better? All it will do is blunt the impetus for fundamental change by giving a smoke-screen of legitimacy to a vampiric practice.

Vampire Lugosi (anim)

With vampires you need a big wooden stake, strategically placed through the heart. So allow me to suggest some serious changes the Ontario government can make right now that will make things a little easier for those of us with wounds in our necks.

First, raise the minimum wage to the average Ontario living wage – somewhere around $15 an hour. And offer no impediment to municipalities to raise it further, to match the living wage in their jurisdictions.

Second (and Ontario may need some help from their federal colleagues for this) create or authorize a financial institution to make short term, high risk loans at a rate people can, with a little credit counselling, actually pay back. Ontario used to have the perfect tool for the job – Ontario Savings Offices. But, in spite of a $10 million annual profit, the Harris government sold off their assets in 2003.

Third, allow this same financial institution to provide micro-loans to low-income people who are able to show they have an innovative, marketable idea.

But the Pope is talking about more than payday loan companies. He is talking about the way the economic order of things works on people. Payday loans are a scourge on the working poor. They are not a filling a need. They are helping to create a need that they then feed off.

They are the neighbourhood storefront for the “new colonialism” the Pontiff talks about. It’s all around us, but we don’t see it. We know that something’s out of whack, but we can’t quite put our finger on it.

How is it that certain people and large companies around the globe can stash some $30 trillion in tax havens, and so withhold billions in tax revenues from people who desperately need them? Is that not a public subsidy of private profit? And why do our governments let them get away with it?

$ CA mid-class income lowest in 50yr

Canadians are dropping out of the middle class as their share of the income drops.

Why has the burden of taxation been shifted from corporations onto a middle class that is already overburdened with debt and losing members to the economy? People used to have good jobs; where are they? And what is our government doing about that, other than signing free trade agreements and hoping jobs trickle out of them?

Can we not ask, even if it’s only ourselves, “Does this game seem rigged to you?”

Well, as it happens, citizens all over the world are beginning to ask that question and the answer they’re coming up with is, “yes.”

The followers of Podemos in Spain, of Syriza in Greece; many of the supporters of Brexit, of Bernie Sanders in the US primaries, and of Donald Trump – especially of Donald Trump because those folks have been cheated of their American Dream.

It’s not government that’s stooping to scoop the “dung of the devil”. It’s not the Church, for all of the worthy Pope’s exhortations. It’s the people. And people are using the only tool they have – their vote.

This post was originally published in the ‘Forum’ Section of Postmedia’s Ontario dailies on the weekend of August 2, 2016

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TPP: The Devil’s in the Details

$ TPP as Scorpion

Think ‘property.’ Now think ‘treaty’ … as in those instruments that transferred land from people who belonged to it, to people to whom it then belonged. Pretty good deal for us, not so much for First Nations. (A stony outcropping of land called the Bruce Peninsula was evaluated not so long ago as being worth some $50 billion —just imagine what the rest of Canada is worth.)

Now you’re in the proper frame of mind to consider the Trans-Pacific Partnership (TPP). That’s the instrument that the Conservatives negotiated and the Liberals have yet to ratify.

The TPP is a massive trade and investment agreement that dwarfs, but does not replace, NAFTA in its scope. It’s the rule book for many things: investment (a troubling chapter that allows foreign companies to sue countries if national laws get in the way of corporate profits), textiles and apparel, customs administration, financial services, entry for business persons, telecommunications, electronic commerce, government procurement, intellectual property and more.

$ TPP countries

Put aside for the moment that the deal takes another bite out of the Canadian market for our dairy farmers. They’ll lose some 3% of market share and we’ll lose some tax revenue. That loss doesn’t count the $4.3 billion worth of compensation promised to dairy farmers or the $1 billion for innovation in the auto industry – if there’s one left after the TPP. The benefit of the TPP to the Canadian economy? According to former Trade Minister Ed Fast: $3.5 billion.

And let’s not look at the 58,000 lost jobs some economists are forecasting, partly because Japanese cars and trucks will be allowed for sale in Canada with much higher ‘foreign content’ (parts made outside the country) than previously.

By the way, before the North American Free Trade Agreement came into effect, we had a trade surplus in the auto sector of over $14 billion a year in 1999. Now, owing to the loss of jobs to Mexico and of business to the Great Recession, we have a deficit of over $10 billion. NAFTA was a pretty good deal for the multinational companies, and a posse of trade lawyers, not so much for US and Canadian auto workers. (Actually it’s not such a good deal for Mexican workers either, at least the campesinos who leave their land and families to work for multinationals for maybe, for $60 a day, wages and benefits.)

Among the corporations who have moved production out of Canada and into Mexico is our very own Magna International. That’s under NAFTA. Under the TPP we’ll have to accept cars with even more parts that used to be made here. How’s that for free trade?

Let’s look at the section of the TPP that deals directly with property – intellectual property or IP. That’s Chapter 18. You can find it and the rest of the text of the TPP at the Government of New Zealand website – don’t ask me why Canada doesn’t have it up. Canada’s other free trade agreements are at Global Affairs CA:

The TPP doesn’t replace any other agreement — it adds its own rules to over a dozen other agreements on intellectual property alone, including one under the WTO which, in 2000, forced Canada to change its Patent law with respect to the manufacture of generic drugs.

Chapter 18 sets the ground rules for the IP industry in any country that signs on. And those rules pretty much dictate how nations are to deal with everything from songs on the Internet to prescription drugs to GMOs. It even includes – and First Nations should be aware of this — a section on traditional knowledge, how to acquire it and how to patent it.

Nothing, it seems, has escaped the attention of whomever it was that drafted Chapter 18. It even lays down the law — literally setting out the sort of punishments that we will have to levy against those who violate its terms. If there’s a dispute — if a foreign multi-national doesn’t like how it’s being treated — it will go, not to Canadian courts, but to a secretive trade tribunal for arbitration. All this helps to cement corporate control of our economy.

This is no small matter. The IP industry (which include the Googles, and Facebooks and Apples of the world, as well as Big Pharma corporations and emerging Financial Tech companies) is the one that’s growing, at least in the US. Manufacturing is accounting for less and less of the GDP there, and here. It’s no coincidence that the IP rules in the TPP best serve US-based multi-nationals.

“We’re a trading nation” as Mr Trudeau likes to say. Well, we export commodities but we import intellectual property and with commodities tanking in a global slow-down, we have to turn our economy toward IP and innovation.

And there’s the rub. As Jim Balsillie, the co-founder of the company that gave the world the Blackberry, points out in a recent article for the Globe and Mail, we are not prepared to compete in the IP game and he quotes the data to back up his claim. In general, Canadian companies are not very good at commercializing innovation. The title of his article asks the right question: “Will TPP mean protection – or colonialism?”

$ CnBdCA Innovation

In an earlier piece, Mr Balsillie quotes a lead strategist for one of the world’s most valuable technology companies: “We don’t sue Canadian companies until they start to matter to us. The money is not worth it when they’re small and we don’t want to look like a bully. We wait until they get big enough, then we go after them. And we kill them.”

We would do well to remember the treaties of two centuries ago and think on what we promised and what we took, and do it before we ratify the TPP.

Originally published in PostMedia’s community papers, 12 February 2016, under the title, “Pick Your Trans Pacific Poison”.
Link to Paul Lachine’s portfolio:


You can tell the government what you think of the TPP 

At least you can until midnight April 30, 2016 when written comments are closed. If you want to appear before the Parliamentary Standing Committee on International Trade, you might have a bit longer. Here’s how (from the Committee’s press release, March 10/16):

“Written submissions are to be no more than 1,500 words. More information on the process for providing a written submission can be found in the Guide for Submitting Briefs to House of Commons Committees. Written submissions should be emailed to:”

You can find the full text of the TPP here or here (easier to read and includes some citizens’ comments).


The TPP is one of 3 massive Trade & Investment agreements being negotiated …

The US is currently negotiating another major trade and investment deal: the TTIP (Trans-Atlantic Trade & Investment Partnership) with European countries. It does not include the UK or Canada – we signed our own deal with the EU, the Comprehensive Economic Trade Agreement (CETA). We have not ratified that one either, largely because Germany is worried (with good reason) about its Investor State Dispute Settlement  (ISDS) provisions.

The principal worry is that trade agreements with ISDS chapters pretty much lock a country into doing business in a certain way. If, for example, a nation wants to change the packaging of cigarette cartons to reflect their health hazards, a company (the Investor) can sue the nation (the State) for erecting a barrier to trade. The dispute doesn’t go to the State’s courts, it goes into secret and very lucrative (for lawyers) Dispute Settlement.

Phillip Morris tried this with Australia. Fortunately, Australia won, but not all disputes are settled in the nation’s favour.

Canada has been successfully sued by a number of corporations for laws and regulations we have tried to pass that were deemed to ‘interfere’ with corporate profits. These suits and complaints have come from a variety of sources already, including the NAFTA and the WTO (World Trade Organization) which successfully forced Ontario to drop its requirement that renewable energy equipment be manufactured in the Province.

There’s a good video from Germany that concisely and accurately lays out the Germans’ worries about ISDS provisions in ‘free trade’ agreements: They mirror the concerns those of us who opposed the NAFTA had about Chapter 11 of that agreement, back in 1988. History has borne us out.

Here’s another quicker, cheekier briefing on ISDS from Lead Now

So, think of the TTIP as the US-EU version of our CETA. Negotiations on TTIP are  scheduled to wrap up in 2020.

But don’t let anyone tell you it’s not possible to open up sections of these trade agreements for review and revision before ratification. At the urging of the EU (ie, Germany) the ISDS chapter of the CETA is being re-negotiated.

$ TPP, TISA, TTIP ven diag

The TISA (Trade in Services Agreement) is another US initiative. It is being negotiated among 23 members of the WTO (including the EU although that’s not reflected in the graphic). Counting the 28 countries of the European Union who sit as a block, some 50 countries, including Canada will be subject to the TISA.

It is based on the WTO’s General Agreement on Trade and Services – the thing that obliged Ontario to stop preferring provincially-based manufacturers of green energy technology under the Green Energy Act. However, the TISA will cover services, not goods, and include banking services, education, water, social services and healthcare.

Some critics see the TISA as an attempt to privatize services now provided by (some) governments such as education and health care. It does seem as though the US is looking for foreign markets for its private service sector. For example, the provision on ‘National Treatment’ states that once a country lowers trade barriers for any service, as it committed to under TISA, it cannot then raise them again. That might protects corporate profitability, but the public good, not so much.

However, the EU has so far been firm in asserting that no trade agreement will prevent its governments, at any level, from providing services in water, health, education and social services. And companies outside the borders of the EU will not be allowed to provide publicly funded healthcare or social services. (But the door may remain open for privately run penal and education services.)

As for public consultation on the TPP in Canada, here’s what one person found at the public forum in St John’s: “This, then, is what the consultation process is to look like: Promotion and publicity are to be minimal and done on short notice, the roundtable discussion is to last one hour, and there is no online audio record of what is said. Government feels this is sufficient.”

As for CETA (Canada’s trade and investment deal with the EU), that seems like a done deal, although some 3.5 million EU citizens have signed a petition opposing this deal and the TTIP, largely because of the influence over national interests they hand corporations.

Bottom line: Governments beware, Citizens be alert.

       (Video published 18 August 2015 – we now have the complete text of the TPP)

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A New Deal for a Precarious Economy

What do you say we start this discussion with some facts?

I know, I know, that’s not the way we do things anymore. Economics is common sense after all. Wage hikes cause unemployment. Unions are job killers. Companies are job creators. Tax breaks for the few trickle down to the many as wages. Inequality works, or rather it makes people work harder.

It’s a narrative that has informed our economic polices for the past 25 years. Unfortunately for its proselytizers, the facts tell a different story.

Good jobs lost in Ontario

Good jobs lost in Ontario since the Recession hit

Canada has the 3rd highest rate of working-age poverty amongst 17 developed countries. Inequality is at levels not seen since the 1920s. We have a moribund manufacturing sector that may or may not rebound with our petro-dollar now brought low. Companies get a ‘fail’ from the Conference Board of Canada on innovation. We have the lowest corporate tax rate in the G7 and one of the highest levels of precarious work. Roughly 40% of the population is a couple of paycheques away from bankruptcy. Household debt is growing (now at 162.6% of disposable income), as the middle class tries to keep its head above water. Workers whose paycheques are shorter than the month are relying on food banks and publicly funded services to get by. Essential government programs such as health care are cracking as tax revenue falls.

Does that sound like a healthy economy to you? No, it doesn’t. What we need is a new way of doing business. What we need is a New Deal.

To guide us, we have the experience of the New Deal that helped lift economies out of the Great Depression. And we have the expertise of economists on both the left and the right, among whom a consensus is emerging.

On the revenue side, the CD Howe Institute suggests restructuring the tax system by adding at least two new tax brackets for upper income earners to be taxed at higher rates. Remember, the top income bracket in the 1950s and ‘60s—the Golden Age of Capitalism—was taxed at 90% in the US and over 80% in CA.

While we’re at it, let’s get rid of the morass of boutique tax credits that have grown like weeds in the past several years. Even the Fraser Institute says they’re expensive, inefficient and return too little to the wrong pockets. What we need is not more for middle class people. What we need is more people in the middle class.

Bill Gates and others want to see a minuscule tax on financial transactions (.01-.1% on stock and money market trades). In Canada, that would raise enough revenue to slay the deficit and erase the debt.

Raise corporate taxes. They were cut by the Liberals in the late 1990s and cut some more by the Conservatives. There is room for gradual, incremental increases, taking care to measure their effect on employment and the economy.

Now for the expenditure side. The trick, as the UN recommends in its Innocenti Report Card for 2014 and as Scandinavian countries are doing, is to use revenues to increase the participation of all income groups in the economic life of the nation. Governments that are successful at reducing inequality fund an inter-related suite of programs that provide some universal services (such as education, health and child care), and some programs that target low income groups (housing and training, for example).

Finally, how do we re-new our economy? Where should government be deploying its legislative levers to foster a sustainable economy that provides enough tax revenue to balance the budget and to pay for essential services?

Unfetter unions. In Canada and the US, government legislation and corporate strike breaking have reduced their membership. A 2011 Harvard study attributes roughly 25% of today’s inequality to the loss of union jobs. Remember, the first New Deal set unions free to bargain collectively. Private sector union membership was at its highest during the 1950s and ‘60s.

Peace & Justice Grey Bruce have released a thoroughly researched paper on the economic damage precarious work does and what municipalities can do about it.

Peace & Justice Grey Bruce have released a thoroughly researched paper on the economic damage precarious work does and what municipalities can do about it.

Legislate a living wage. Forget minimum wage. That’s just trapping people below the poverty line and in the line-up for public services. For governments, a living wage will relieve the stress on community resources and the public purse. For citizens, it will enable more people to participate in the social and economic life of their communities. New Westminster BC has done it. And Seattle WA has even legislated the private sector to follow its lead of paying workers at least $15 an hour.

For business, higher wages mean better employees. That’s why Aetna Insurance in the US has raised its lowest wage to $16 an hour. The company reckons it will save about $100 million a year by reducing its employee turn-over costs and fostering a well-trained and loyal work force.

Stimulate. Recovering economies do not respond well to austerity. In fact, austerity measures imposed on Greece have made the situation worse. Even the International Monetary Fund is saying, with interest rates so low, now might be a good time for more infrastructure spending.

Diversify. You hear that so often it’s almost an article of faith, like common sense. But in this case, it’s also true. Putting all your eggs in one basket is never a good idea. You might trip and fall, as oil prices are doing now. Canada’s dollar was high on hydrocarbons for years; now it’s not. Maybe manufacturing will return; maybe not.

Encourage innovation. Engineering, re-engineering, architecture, information technology, pharmacy and the arts are all industries that don’t need cities. Richard Florida’s Creative Economy is on the right track, as long as creators turn their innovations into products; or if they can’t, turn them over to those who can.

We can no longer afford to be just hewers of oil and drawers of liquid gas, or to rely on the US economy to create jobs, or wait for their policies to determine ours. We have to start thinking, and working, for ourselves.

© David McLaren January 2015

This essay appeared in the Forum section of Sunmedia’s Ontario papers January 31 or February 2, 2015.

$ Income Can Infograph HPJun12








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Minimum Wage Costs … Everyone

It was Andrew’s first day at his new job. It paid minimum wage but, hey, it was his first job ever. His task was to stack bins that had just been washed out and disinfected. He was given rubber boots and gloves but no apron. So when chemicals from one of the bins sloshed out and down his legs, it filled his boots. He was rushed to hospital with burns from his waist to his feet. No safety training, no proper protection, no union, and now, no job.

Illustration by Paul Lachine

 Judy works in a big box store stocking shelves on the night shift. It’s supposed to be part time work, but she’s expected to fill in for people who go on holidays or are sick or don’t show up. So it’s full time work at $12 an hour and few benefits with no “promotion” in sight. All the full time positions are filled anyway—all four of them. To make things worse, she has 3 kids in school and spousal support honoured more in the breech, than in the payment. She’s stuck—behind the eight-ball and below the poverty line.

Both Andrew and Judy (not their real names) are in what academics call precarious work: low wage, full time or part time or short term jobs. Whatever you call them, the paycheque won’t get you to the end of the month. Sometimes they are dangerous.

It’s one thing for business to make a profit. There’s nothing wrong with profit—I wish I had more of it. But there is something wrong with the business plan of a company whose profit depends on (or is enlarged by) the public purse.

By Banksy in New York City

By Banksy in New York City

How much we in Canada are paying to help businesses with their profit is hard to gauge with our health care system, our progressive tax system, our social programs and our food banks. But in the US, where everything is monetized, it’s easier. Economists have crunched the numbers and discovered the fast food industry alone costs American taxpayers some $7 billion a year simply because it doesn’t pay its employees enough to live on. Corporate MacDonald’s even set up a ‘McResources Line’ to help its cash-strapped employees apply for food stamps and Medicare.

There are consequences to driving down wages. Canada now has the 3rd highest rate of working age poverty—ahead of every developed nation except Japan and the US (Conference Board of Canada). Inequality, driven by precarious work, is rising almost as quickly in Canada as it is in the America according to the Organization for Economic Cooperation and Development (OECD).

But there is something even more basic at stake. How fair is it to expect people to work a 40-hour week for a wage they can’t live on?

So what do you say we stop talking about whether the minimum wage is too high? It’s costing all of us a lot more than we think. Just ask your local United Way or Public Health Unit how far public resources are being stretched.

Let us, instead, start talking about a living wage—a wage at which those working full time, even if it’s two or three part time jobs, can begin to participate in the economy. A living wage in Ontario is about $15 an hour, give or take, depending on local services.

The United Way of Bruce Grey puts it at $16.76 for 2014 for rural areas. For Owen Sound, it’s $14.77, thanks largely to that city’s bus service—which City Council has been thinking of cutting.

What goes into a living wage? Not liquor or cigarettes or cell-phones—although many people are choosing cells over land lines if they can’t afford both. It covers the basics: food, rent, utilities, clothing, car and insurance (but not repairs), child care, prescriptions, and dental care.

Now, remember, we’re talking a living wage so we have to count the cost of participating in society and helping the economy, even a little bit, by buying stuff. So, throw in a pass to the Y for the kids, the odd family outing, a vacation in Ontario, birthday gifts, school activities, banking fees, tenant insurance, telephone and internet. Add them up and you will find that, if you are a single parent with two children, you need to be making at least $15 an hour.

Temporaty, part time, precarious jobs are outstripping full time jobs. 95% of jobs created last year in Canada were precarious.

Temporary, part time, precarious jobs are outstripping full time jobs. 95% of jobs created in Canada in 2013 were prec arious.

This list doesn’t include things many of us take for granted: computer purchases, cable or satellite TV, a new or used car every so many years, music or gymnastic lessons for our kids, hockey, or lunches and lattes with friends. Or buying a house. You can’t build equity on $15 an hour.

Governments—and we’ll be electing one ofhem on October 27 and another in 2015—have options to eliminate worker poverty. They can restructure the tax system. They can find ways to encourage the return of good manufacturing jobs (by far, the best long-term solution). They can stop fighting the unions. Unions have been part of our capitalist system for over 100 years and were instrumental in redistributing wealth during capitalism’s golden age in the mid 1900s.

But the single most useful thing—and some municipal governments are leading the way on this—is to get more money into more people’s pockets. Councils can lead by passing a living wage policy for their own employees and by writing it into the terms of contracts for out-sourcing as New Westminster has done.

Penny-wise and pound-foolish is never so true as it applies to politicians who think the only bottom line is found on a balance sheet. The real bottom line is the degree to which all citizens can participate in the economic and social life of their community.

© David McLaren October 2014

This essay appeared the Forum section of Sunmedia’s Ontario papers October 10 or 12, 2014.

Some Interesting Links

Austerity is a mug’s game. Greek debt to GDP ratio has grown since its creditors imposed austerity measures. Greeks are hurting, the neo-Nazi Golden Dawn have elected representatives in the Parliament and the heatlh care system has imploded.
Two American Families’ PBS Frontline show about falling out of the middle class; a series of documentaries that has followed two American families from the 1970s. Middle class no more.
‘Poor No More’ the movie looks at the impact of part time and low wage jobs on Canadians contrasted with Ireland and Sweden.
Ontario’s economy has shifted from manufacturing to service (fast food, big box retail, hospitality).
Precarity in the GTA. A study by McMaster University and the United Way Toronto found barely half of people had a full time job that paid well and had benefits.
Precarity in rural Ontario. The Grey Bruce Public Health Unit starts a conversation on the social determinants of health. (50% of health outcomes depend on income, social status and education).
Why precarious work is bad for you. Scarcity of anything can make anyone a bit crazy, but scarcity of money can make you sick.
Why inequality is bad for you. Research on the serious social side-effects of inequality in a community or country. One of the most serious is social and political trust, perhaps one of the reasons for low voter turnouts.
US mayors focus on the lowest paid workers in their cities and vow to raise the minimum wage for city workers and contractors’ employees.
Toronto’s ‘Fair Wage Policy’. Not yet a living wage but Toronto pays its lowest paid workers above Ontario’s minimum wage and obliges City contractors to do the same. The living wage in Toronto is $17.17.
Australians pay 6 cents more for a Big Mac and their minimum wage is $16/hr.
Welfare Queens. How much Walmart and McDonald’s are costing the American taxpayer: $1.2 Billion a year for McDonald’s and for Walmart’s ‘associates’, $1000 per employee a year.
In Owen Sound Ontario (pop 23000), the food bank hands out $40,000 worth of food every month, even during the summer.
Teachers in New Mexico in the US pack their students’ backpacks with food at the end of the day.
It pays to pay well. From the Harvard Business Review: Cashiers at QuickTrip earn about $40,000 a year.

Middle class income shrinks as union membership declines (US data)

After Thatcher in the UK and Reagan the US began busting the unions and deregulating industry, inequality began to rise in the late 1970s.


$ Gap US We grew apart

A variety of causes: deregulation of industrial and financial sectors, free trade pulls jobs off-shore, seismic shift in economy from manufacturing to service and in jobs from well-paid full-time to poor part-time, attacks on unions. All exacerbated after the 2008 financial crisis. (US figures, but Canada data mirror these effects).

Posted in Labour, The Economy | Tagged , , , , | 1 Comment

Plato’s Tree

The boy followed the old man along the road that wound up from the city. He had to run sometimes for the man was old but he was strong, and the axe the boy carried was heavy. At least they were above the sting of the tear gas that still hung heavy in the streets below. But they were not above the wood smoke that even now partly obscured the Parthenon.

$ Austerity Gr Police

The winter of 2013 in Athens was not the coldest on record, not as cold as it was when I camped out on a boat in the Piraeus harbour so many Christmases ago. But it was cold enough for people to burn things. The city was swept of bits and pieces of scrap cardboard and wood, and now the elderly were breaking up their furniture. In November, the government had jacked up the tax on heating oil 450%.

Along with Greek tables and chairs, the Greek economy was pretty much in ashes. The European Union and the International Monetary Fund were keeping the country from burning to the ground by pouring money on its economy. The price for their beneficence? An austerity regime of tax hikes and draconian cuts to government jobs and services.

In the winter of 2013, so few could afford to buy heating oil, that the government lost revenue on its sales. And the air in Athens turned black with burning wood.

Keeping the home fires burning in Athens (NYT)

Keeping the home fires burning in Athens (NYT)

Who knows how it got so bad? Credit default swaps hid the real economy. Greece’s trade deficit grew and so did its labour costs. But credit was easy before 2009, so the government borrowed. Banks around the world bought into the toxic derivatives cobbled together by the Americans. When all the bubbles burst, the Greek economy was exposed, vaporizing confidence in its ability to carry on, let alone repay a trillion dollar debt.

Those individuals and companies who could afford to do so, hid their incomes in Switzerland, Lichtenstein or Luxemburg—some $75 billion by the reckoning of Greek journalist Kostas Vaxevanis.

They weren’t the only ones. The OECD reckons the world’s tax havens hide about $6 trillion owed to its governments, mostly by corporations like Apple and Nike. If you have some cash to stash offshore, Canadian banks are there to help. We lose at least $8 billion a year to tax havens, even though successive governments have cut corporate taxes to the lowest in the G7.

Austerity consumes struggling economies. You can’t cut jobs and still expect people to buy things. Where is government to find revenue if people are out of work and corporations are hiding their incomes (or if government itself is cutting their taxes)?

In the winter of 2013, after four years of austerity, unemployment in Greece was nearly 30% and the country’s debt to GDP ratio was still going up. Unemployment among youth was 65%.

Now gangs of young men emblazoned with the swastika-like symbols of the Golden Dawn roar through the streets of Athens on motorcycles menacing immigrants, Jews and anyone else they can scapegoat. They have become more brazen now that 18 of their comrades have been elected to the Greek Parliament—elected in spite of a televised debate in which their spokesman repeatedly slapped his female opponent.

At the sound of a backfire the boy tightened his grip on the axe and thanked the Christ he was not Muslim.

But the old hate, and the new poverty, and the massive job cuts—none of that was the worst. The worst was Elena.

Elena (NYT)

Elena (NYT)

For people with jobs, health care is paid for by their employers and the government. When people lost their jobs, the hospitals treated them anyway. But Greece’s lenders demanded that even this charity cease. From the summer of 2011, Greeks have had to pay out of pocket for medical care. The cruel irony is that the poorer you are the harder it is to heal.

Elena’s breast cancer had advanced and now it had burst through her skin. With no job and no money, she had been draining her own wound with paper napkins. The doctor she finally found works in an underground network of clinics, unfunded but supplied with “donated” equipment and drugs. If he is discovered treating Elena, he will have to pay for her meds himself.

The old man stopped at the foot of an ancient olive tree, trunk gnarled like the backs of his hands, old branches twisting just above his head. He wrapped his bony fingers into one of the deep creases in the trunk and told the story of Athena’s gift.

Women collect leftover vegetables in Athens

Women collect leftover vegetables in Athens

In the old days, she and Poseidon vied for the protectorate of the city. Their priests arranged a contest: each would offer a gift and the Athenians would choose.

Poseidon struck his trident on the ground and salt water welled up. The god of the Sea would give safe passage to Athenian ambition for trade, commerce and empire.

Against Poseidon’s gift, Athena offered the olive tree—a gift of wood, oil and food that promised peace, plenty and good governance for thousands of years. The City accepted it and flourished. Indeed, this very olive tree, the old man told the boy, was said to have shaded Plato himself.

But Poseidon was angry the Athenians had refused him. He harassed their fleets and frustrated their trade for centuries after.

When the old man had finished his tale, he took the axe from the boy and, with a curse on his lips for the Earth Shaker, he delivered the first blow.

© David McLaren, June 2014

A version of this essay appeared in the Forum section of Sunmedia community papers, 14 June 2014.
You can follow this blog by clicking on the + sign in the banner along the top of your screen. You can see an annotated list of articles here.

Update: Syriza wins election in January 2015

The left wing Syriza Party ran on the promise to renegotiate Greece’s debt to the eurozone and, as of this writing, it is resisting all kinds of pressure from France and Germany to continue austerity measures. Essentially, the Greek government wants to reduce the spending cuts its debtors have been insisting on; raise revenues by getting people working again; and put more of their budget surplus back into the economy.

As Nobel laureate Paul Krugman says in a recent New York Times article: “This is a dastardly ploy by those left-wing radicals. You see, it’s completely reasonable.”

Other economists are coming around as well. Reza Moghadam, the former head of the International Monetary Fund’s European division has endorsed Syriza’s anti-austerity plan. Moghadam was one of those who imposed austerity on Greece in the first place. In fact, the IMF is now suggesting that nations should be stimulating their economies by spending on infrastructure, even if it means running a deficit, since interest rates are so low.

Moghadam goes even further, saying half of Greece’s debt should be written off (mostly because, as its Debt to GDP ratio rises, it’s clear the Greeks will never be able to pay it all off anyway, leaving the country mired in perpetual debt). The Bloomberg View, a business publication, also calls for debt forgiveness.

Mark Carney, the well-respected former governor of the Bank of Canada and current Governor of the Bank of England, has also said the eurozone needs to ease up on its austere budget cuts to avoid the unsustainable debt trap the Greece is now in.

Even if it can’t negotiate a new deal with its eurozone lenders: the European Commission, the European Central Bank and the International Monetary Fund (aka ‘the troika’), Greece has an exit strategy. It could leave the eurozone, re-instate the drachma and go it alone.

Others have done it. Argentina untied its currency from the US dollar in 2001. East Asian countries did something similar following their 1997 crisis. It means short term decline and financial chaos, but the economy of those countries ended up with GDPs higher than they were before the devaluations.

Austerity fails.  In spite of draconian measures imposed on southern European countries, their debt (in relation to their GDPs) keeps growing.

Austerity Fail
In spite of draconian measures imposed on southern European countries, their debt keeps growing.


Update: October 2015

Yanis Varoufakis, Syriza’s choice for Finance Minister of Greece resigned when his government capitulated to the Eurozone’s demands for continued austerity. You can find his ‘apologia’ (not ‘apology’, it’s a Greek word for ‘explanation’) in this You Tube video from October 2015.

It’s over an hour long, but revealing in Varoufakis’ description of how the Eurozone’s bankers dictated to Greece’s democratically elected government – even after a referendum in July 2015 in which the Greek people voted ‘No’ to the bankers’ austerity plan.

In the 2nd half of the interview, Varoufakis sets out some ideas for a democratic economy. For  most people today, economic justice cannot be realized without political power.

He continues to “make mischief” (as he calls it) by revealing the assault on democracy that the neo-liberal policy makers of the Eurozone represent. From his view from inside the Greek crisis, Varoufakis saw the political will of his people denied by the insistence of the troika that they submit to their crippling economic measures.

The crisis was not an economic one – it was (and continues to be) a democratic one – an argument he makes in an article for the guardian on April 15, 2016.

As Tommy Douglas was wont to say (I paraphrase): Beware the elites who, fearing the people may use political democracy to gain economic democracy, begin to use their economic privilege to destroy political democracy


From the rule of the virtuous
to the rule of the rich

Achilles on a coin from 4thC BC

Achilles on a coin from 4thC BC

There is a very old idea from ancient Greek culture that goes by the Greek name of timé. It is honour, specifically, in the Homeric view of the world at least, honour that has external measure and great value among men.

But such honour is not infinite. Think: spoils of war. Homer’s Iliad is about timé. It is a snapshot of one incident in the long siege of Troy by a Greek city-state coalition of the willing.

Achilles is the greatest of the Greeks who attack Troy and he gains the lion’s share of spoils—of timé: tripods (for some reason), armour, weapons, gold, Briseis the concubine whom he loves.

Along comes Agamemnon, the leader of the Greek forces who feels, being leader, he should have more timé than Achilles. So he takes Briseis for himself.

To a man, especially a man like Achilles in a society like that of ancient Greece, this is an irredeemable insult, not the least because it also weakens his kleos.

Kleos seems to be part and parcel of timé. Timé is for show in the here and now, but kleos is forever. Kleos is a word closely related to the Greek verb ‘to hear’ and carries the idea of ‘what people hear about you’. Acclaim is earned only through great deeds which had best end in death if you want your praise sung loud and long. In the ancient oral tradition of the West, you lived on only through the encomiums of storytellers like Homer.

As Homer himself indicates in his first line, the whole of The Iliad is a song about the wrath of Achilles: “Sing, goddess, the anger of Peleus’ son Achilles and its devastation, which put pains thousandfold upon the Achaians.”

Achilles is so angry at the loss of timé, that he refuses to fight. Not the promises of even greater rewards from a regretful Agamemnon; not the threat of annihilation of the Greek expedition; not even smooth-talking Odysseus’ appeal to kleos can move Achilles to fight. Such is the hold on the mind of our ancestors of timé justly won and unjustly lost.

We like to think we have moved beyond such old ways. We like to think that honour comes to those who are the best of us, the most noble. Such honour is limitless and everyone can have any amount of it if they are deemed worthy enough.

But not so when it comes to money. There is a finite amount of that in the world. If I acquire more, it means you will have less, like water from a well. And, like water in a well, money can be drawn out of the rich earth. But, as with water from a well, money doesn’t automatically trickle down to those who are most in need of it.

The more money I have, the more I am likely to accumulate, as Thomas Piketty demonstrates in his book, Capital in the Twenty-First Century. The more money I have, the more likely I will want to proclaim my wealth by buying outsized homes, big cars, memberships in private clubs, and political influence—especially political influence, for influence brings me kleos. And, as research shows, the more money I have the less I want to share it, especially with those who don’t have it.

Aristo Onassis, 1932

Aristo Onassis, 1932

Money, especially a lot of money, is timé. Think: the Koch Brothers. Think: Bill Gates. Think: Conrad Black who, notwithstanding his various convictions, has managed to hold fast to both timé and kleos. Think Aristotle Socrates Onassis (Aristo for short).

Greece’s 1%, along with others of the world’s 1%, own nearly half of the wealth in the world. They are jealous of their timé and find novel ways of hiding $6 trillion of it lest some undeserving political leader comes along and takes it.

For some, the old way of viewing the world hasn’t change much. Nevertheless, societal mores and values do shift over time.

If, for Achilles, timé is his hard-won spoils, timé for Plato is also the essence of an honourable man. As the man so the state, says Plato and although a timocracy (the rule of those who love honour and glory) is worse than an aristocracy (rule by ‘the best’, the lovers of wisdom), it is better than a oligarchy (in which “the lovers of money” take the place of the lovers of virtue—what some now call a plutocracy and what others call a corporatocracy).

For the record, Plato doesn’t think much of democracy, which he deems as worse than oligarchy and only a little better than tyranny. We however believe democracy to be the best sort of government, as long as the best and most noble of us are elected. But that’s always been a bit of a crap-shoot.

As with a man without discipline or self-examination, one kind of rule can slip into another. Our ideal governance (democracy that elects virtuous men and women) can slide into a democracy that elects avaricious men and women.

Hear Socrates explain how a government of honour can degenerate into government by the wealthy in Book VIII of The Republic

Graffiti in Athens by iNO

Graffiti in Athens. ‘System of Fraud’ by iNO

[Adeimantus] And what manner of government do you term oligarchy?
[Socrates] A government resting on a valuation of property, in which the rich have power and the poor man is deprived of it.
—I understand, he replied.
—Ought I not to begin by describing how the change from timocracy to oligarchy arises?
—Well, I said, no eyes are required in order to see how the one passes into the into the other.
—The accumulation of gold in the treasury of private individuals is the ruin of timocracy; they invent illegal modes of expenditure; for what do they or their wives care about the law?
—Yes, indeed.
—And then one, seeing another grow rich, seeks to rival him, and thus the great mass of the citizens become lovers of money.
—Likely enough.
—And so they grow richer and richer, and the more they think of making a fortune the less they think of virtue; for when riches and virtue are placed together in the scales of the balance, the one always rises as the other falls.
—And in proportion as riches and rich men are honoured in the State, virtue and the virtuous are dishonoured.
—And what is honoured is cultivated, and that which has no honour is neglected.
—That is obvious.
—And so at last, instead of loving contention and glory, men become lovers of trade and money; they honour and look up to the rich man, and make a ruler of him, and dishonour the poor man.
—They do so.
—They next proceed to make a law which fixes a sum of money as the qualification of citizenship; the sum is higher in one place and lower in another, as the oligarchy is more or less exclusive; and they allow no one whose property falls below the amount fixed to have any share in the government. These changes in the constitution they effect by force of arms, if intimidation has not already done their work.
—Very true.
—And this, speaking generally, is the way in which oligarchy is established.

Since the cuts, graffiti in Greece has flowered into an art form of protest. 'Access Control' by iNO.

Since the cuts, graffiti in Greece has flowered into an art form of protest. ‘Access Control’ by iNO.

In the next section Socrates lays out the defects of oligarchy …

—Yes, he said; but what are the characteristics of this form of government, and what are the defects of which we were speaking?
—First of all, I said, consider the nature of the qualification. Just think what would happen if pilots were to be chosen according to their property, and a poor man were refused permission to steer, even though he were a better pilot?
—You mean that they would shipwreck?
—Yes; and is not this true of the government of anything?

—And here is another defect which is quite as bad.
—What defect?
—The inevitable division: such a State is not one, but two States, the one of poor, the other of rich men; and they are living on the same spot and always conspiring against one another.

—Another discreditable feature is that, for a like reason, they are incapable of carrying on any war. Either they arm the multitude, and then they are more afraid of them than of the enemy; or, if they do not call them out in the hour of battle, they are oligarchs indeed, few to fight as they are few to rule. And at the same time their fondness for money makes them unwilling to pay taxes.
—How discreditable!

—A man may sell all that he has, and another may acquire his property; yet after the sale he may dwell in the city of which he is no longer a part, being neither trader, nor artisan, nor horseman, nor hoplite [citizen soldier], but only a poor, helpless creature.
—Yes, that is an evil which also first begins in this State.
—The evil is certainly not prevented there; for oligarchies have both the extremes of great wealth and utter poverty.

—Well, I said, and in oligarchical States do you not find paupers?
—Yes, he said; nearly everybody is a pauper who is not a ruler.
—And may we be so bold as to affirm that there are also many criminals to be found in them, rogues who have stings, and whom the authorities are careful to restrain by force?
—Certainly, we may be so bold.
—The existence of such persons is to be attributed to want of education, ill-training, and an evil constitution of the State?
—Such, then, is the form and such are the evils of oligarchy; and there may be many other evils.

Olivetree_1500yrs Ithaca Wikimed

1500 year-old olive tree in Ithaca Greece

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Wynne’s Win: Ontario’s Great Divide

No one should be happy about the Liberal majority. Well, maybe Kathleen Wynne—she owned up to the gas plant scandals and she ran a terrific campaign. This is, more than anyone else’s, Wynne’s win.

Elections have a way of showing us what we don’t see (or don’t want to see) before the vote. When Ms Wynne comes down from cloud 9, she will realize that she is Premier of a Province severely divided. The rural-urban split is real and sharper than ever, with the PCs taking the farm belt across the middle of the Province and the Liberals the cities and the 905.

There’s an essay in why that happened, but this isn’t it.

First Nations remain outside the mainstream political discourse, at least in central Ontario. In this riding (Bruce-Grey-Owen Sound) their vote was the inverse of the Provincial: first NDP, then Liberal, then Tory—same as many other FNs in Ontario in 2011. The turn-out at Saugeen and Nawash was, as usual, well below the Provincial average. There’s another essay in why this happens election after election.

But another, more clear and present divide has opened up in Ontario—the divide between those of us who have more than enough and those of us who don’t. We know now that income inequality is a huge problem for families, communities and for society.

I bet everyone knows someone who is struggling to get to the end of the month before their pay cheque runs out. If it weren’t for family ties, food banks, affordable housing, and universal health care, precarious work would be putting whole families on the streets.

“The Gap” is what they call it in England. They’re not referring to the store, although The Gap is certainly symptomatic of the problem. The inequality gap is getting worse as good, middle-class wage jobs remain AWOL in Ontario. It is widening and threatening to become feudal – a class of people permanently underemployed serving another class permanently overpaid.

None of the major parties articulated a vision or promoted a platform that addressed this divide. The NDP might have, but Ms Horwath moved them to the right where they bumped into the Liberals who, with their clever budget, took votes away from them.

The Progressive Conservatives clung to their mantra: cut taxes, cut jobs. A decade of cutting corporate taxes and middle class jobs in the public sector hasn’t worked to create good jobs in the private sector, so you’d think they’d be looking for another ideology.

But they aren’t. I know this from talking to some of them, including candidates, after the vote was in and they saw how badly Mr Hudak’s articulation of that ideology was received.

There is nothing much in the Liberal budget that will successfully address the Gap. It is a political budget, a mishmash of policies and promises designed to win an election—hardly the framework on which to rebuild a prosperous society.

If there is no political vision from above, it means we have to discover it ourselves. It’s time for us to start thinking outside the little boxes of our favourite ideologies and, together, find our own solutions to what divides us.

© David McLaren, 13 June 2014

Seat Count after the 2014 Ontario Election
Liberals (majority government) 59
Progressive Conservatives (PCs) 27
New Democratic Party (NDP) 21

Results 13Jun14 Map global

Results 13Jun14 MapS global

Source of maps: Global TV
(riding by riding results).

More maps: Toronto might be Liberal but it is still divided against itself

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