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When Hudak Says "Flexible" Labour, He Really Means "Cheap"

Posted: 07/18/2012 10:10 am

This is part one of a three-part reply to Ontario PC Leader Tim Hudak's series of HuffPost blogs about his party's "Path to Prosperity" white paper.

Since when was the middle class the enemy of Ontario's economic strength? It seems impossible to have a conception of prosperity that doesn't include the collective well-being and livelihood of the families of average income earners.

Yet according to Tim Hudak's white paper on "flexible labour markets," Ontario won't prosper until companies are allowed to convert workers' wages into shareholder gains. No mention, of course, how he will deliver on the promise that these profits will "trickle down" to everyday workers.

The paper lays out the Tories' new platform on workers' rights and unveils an economic scheme for the province that is centered on reduced public services and cheap labour. To accomplish this, Hudak plans to dismantle generations of hard-fought workers' rights to collectively organize through labour unions.

The main thrust of his argument is that trade unions have outlived their usefulness and that middle-class wages and benefits are driving employers (predominantly in the manufacturing sector) to pull up stakes and take their business south of the border, where they have their pick of anti-union jurisdictions where skilled workers earn little more than minimum wage.

In a recent blog post in support of his paper, Hudak concedes that "over time, unions have contributed to developing Ontario's middle class and to improving safety in the workplace," but he then calls on readers to overlook these "important gains" and recognize that the "world has changed."

Instead, he suggests, what today's workers really need is "flexibility."

In the future Hudak dreams for Ontarians, workers will shuffle from one low-wage, precarious job to another, competing with each other in a race to the bottom. This is what he means by "flexibility" and it is the path to poverty, not prosperity.

You see, rather than offering a plan for creating jobs and rebuilding our economy, Hudak simply blames Ontario workers for expecting middle class wages and financial security for their families. His paper celebrates research that suggests net manufacturing labour costs between the United States and China will "converge" in 2015.

Given that the average manufacturing wage rate in China was the equivalent of $3.10 per hour in 2010, compared to $22.30 in the U.S, it seems hard to imagine that such a yawning wage gap could be overcome in a mere five years. Would this mean that Chinese wages are finally catching up with those in the U.S.? Hardly. While there has been some wage growth in China in response to growing labour unrest (and a series of worker suicides), the real story here lies in the dramatic decline of manufacturing wages in the U.S.

Aircraft manufacturer Boeing has deliberately opened new plants in low-wage U.S. jurisdictions. They pay their employees an average US $14/hour -- half the rate paid at its Washington plant where workers have fought to maintain decent pay and benefits through union membership. Likewise, in 2011, Boeing posted record profit rates -- more than 20 per cent higher than even the previous year when the company's net income had soared by over 152 per cent.

When Caterpillar workers at Electro-Motive Diesel in London, Ontario rejected a 50 per cent wage cut, the company immediately announced that it would move the plant to Muncie, Indiana where the wages range from US$12 to about US$14.50 per hour -- just over half the average 2010 manufacturing wage rate in the U.S. and much less than half the wages earned by the workers in London, Ontario. In 2011, Caterpillar posted a nearly 60 per cent increase in fourth quarter profit and the highest yearly growth rate since 1947.

Rather than challenging a corporation that shut down Canadian operations in pursuit of cheap labour, Hudak was silent in the Legislative Assembly. Now he is trying to imitate U.S. legislators who are passing laws to prevent workers from collectively organizing and defending their interests against profit-hungry domestic and multinational corporations.

This has facilitated a downward trend in U.S. wages, not just among union members but also among all workers. As noted by the U.S. Bureau of Labor Statistics, the real median weekly earnings of U.S. wage and salary workers fell by almost two per cent between 2010 and 2011. But this should be no surprise. As Indiana's Commerce Secretary Dan Hasler stated plainly to the Wall Street Journal: "Our goal in Indiana is really pretty simple: It is to help companies improve profitability."

This is the bold new mantra of Hudak's Conservatives: "Flexible labour" is cheap labour. And in this respect, he differs little from his federal counterpart Stephen Harper, who, as Prime Minister, has presided over an expanded Temporary Foreign Worker Program, allowing employers greater leeway to import people from all over the world with precious little obligation for their well-being. When the work is done, or if the worker is maimed on the job, they are literally disposed of -- sent back to their home countries with nary a thought.

Most recently, the Harper government gave employers the green light to pay migrant workers between 5 and 15 per cent less than the average wage for that occupation.

And lest we think this could never happen to "Canadian" workers, the Harper government has already signaled its intent to push workers with active Employment Insurance claims into jobs earmarked for Temporary Foreign Workers, including those jobs paying five to 15 per cent less.

Cheap, flexible, and disposable: this is the Conservatives' shared agenda, from Stephen Harper to Tim Hudak. Their plan is hardly original. It is another variation on the race to the bottom where jobs are permanently in flux, wages are low and the social safety net has all but disappeared -- yet corporations make out like bandits. The Conservative vision for lean government and labour flexibility represents a fundamentally different future from the one most Ontarians expect -- and deserve.

CORRECTION: The post originally stated the average manufacturing wage rate in China was $3.10/hour in 2012, but has been corrected to read 2010.

 

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Dinsdale Pirahna
"lookin' out the 'ole in the wall"
12:07 AM on 07/31/2012
"..Hudak and his party want to revert back to the confrontational times of North American labour history, where workers’ rights were ignored, families lived a meager existence, and companies waged war on unions under the tacit protection of government.
These anti-union ideas – even during a time of record low corporate tax cuts – bubbling up during a time of economic distress, fuel a perception that the best way to salvage an economy is to cut costs from the bottom up.
Instead, these laws and their ilk are nothing more than to widen the gulf between the haves and have nots in a society and perpetuate a race to the bottom, where no one wins except a select few.."

http://www.hamiltonnews.com/opinion/race-to-the-bottom/
12:30 PM on 07/19/2012
Hudak isn't really concerned with Private Sector Unions, it's the public sector that is at issue. While the rest of us face cutbacks and have gone for years without wage increases, Public sector workers get guaranteed wage increases yearly. While the rest of us worry about how we'll survive after retirement we fund their pensions. It has to stop. Workers at manufacturing plants can do what they want, it doesn't bother me, I don't pay their wages. If they think getting paid X dollars an hour is a fight worth fighting at risk of losing their jobs, that's their right. When public sector unions complain about how hard it is while I work to pay their wages double or triple mine, while they go on saying they do it for me, I get angry. The unions have a rude awakening coming
02:56 PM on 07/20/2012
Public sector unions are the only stronghold left for Canadian workers. While private corporations are making record profits they are also receiving huge tax breaks which represent a huge portion of our public sector funding. People fear losing their jobs because of propaganda stating 'times are hard' and corporations can't afford the requested wages so that accept wage freezes and cutbacks. Pay attention. Corps are swimming in record profits, refuse to pay their fair share of taxes and threaten to pick up and move the company elsewhere if the workers and/or government don't bend to their demands. You should be THANKFUL that our public sector unions are still fighting the good fight! Support them. They fight not just for their own self-preservation -- they fight for yours, as well.
11:58 PM on 07/30/2012
Sorry dear, public sector unions like all associations, whether unions, doctors, dentists lawyers associations, etc. look after themselves and really don't care about others. If you think that they do you are just kidding yourself.
HUFFPOST SUPER USER
Angus12
06:41 AM on 07/19/2012
So we'll let Dalton continue what he's doing. Rewarding the people who put him in power (the unions) with promises and then turning around and stabbing them (teachers, doctors etc) in the back when he realizes that he has put this province in the worst condition it has ever been in.
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GrantS
I'm liberal through and through.
01:23 AM on 07/19/2012
Flexible is suppose to mean willing to move or retrain to higher skill.

With globalization jobs WILL be lost to lower wage countries. This is basic economics.

The idea of flexibility is that higher skillsets can't be shipped as easily. But it seems to me India and China are pumping out engineer jobs at incredible rates. So that means even some skilled labour will be gone.

Best to get a job that can't be shipped. Maybe that's what he means by flexible.
12:38 AM on 07/19/2012
It's a race to the bottom folks and the worst part about it is that we're doing it to ourselves as well. It's in the corporate mantra to do it as cheap as possible (which shouldn't surprise anyone) and a big business friendly conservative government to cut some of the red tape to make it happen. But another big issue is with the working people themselves - anybody that makes a few bucks more than the next guy simply "makes too much money". Thats the simple psychology behind it. Joe the high school kid makes minimum wage and hear's about someone making $15.00 an hour - that guy makes too much. The guy making 20 bucks an hour but has a beer with a random guy at the bar that makes 30 bucks/hr - that guy makes too much.

So, when we're all making close to min wage and an average house is $400 000 and rising - be sure to pat yourselve's on the back for helping to create this mess.
10:41 PM on 07/18/2012
It's worse than "cheap"... it's insecure and therefore those forced in this life end up being overstressed and candidates for mental illness, other illness and suicide. It's also economic suicide.
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Machine Head
I`d rather have a full bottle in front of me......
07:25 PM on 07/18/2012
Tim Hudak was overheard to say at one of the summer Tory BBQ's....."Are there no prisons? "Are there no workhouses? I'll fix that when I become dictator!" Welcome back to the Victorian era of labour relations.
06:33 PM on 07/18/2012
Honestly, I was never really much of a "pro-union" guy. Then I started reading Hudak's plans outlined in HuffPo. It actually changed my tune a little. What this guy's proposing really seriously freaks me out and made me start re-thinking job growth strategy in Ontario (and beyond).
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HUFFPOST SUPER USER
Glass Cannon
Let every eye negotiate for itself.
05:18 PM on 07/18/2012
Right on Mr Ryan. Current conservative policies sell out even some of the most basic standards that workers have been struggling for over that last century, at least.

What it is, is that corporations have realized that they are never, ever going to improve the efficiency of workers in factories in China and other sweatshop nations, so they need to try to cheapen the labour pool by cutting back on highly efficient European and North American workers.

Just wait until they realize that the vast (and largely mythical) "emerging middle class" in countries like India and China isn't really capable of replacing those highly efficient European and North American workers as consumers. Can't come soon enough.
03:53 PM on 07/18/2012
The wage gap in this country has ensured that people like Hudak cannot even conceive of the problems faced by the average worker. Yet, he wants to pass legislation while completely ignoring what will happen to these people after it comes into effect. Until we have leadership that understands it needs to represent EVERYONE, we are going to have nothing but problems.
03:16 PM on 07/18/2012
Tim Hudak's White Paper doesn't tell us how low wages for maximum profit will trickle down prosperity on Ontario because it is an absurd proposition. What Hudak and his Conservatives (along with Caterpillar and others) want is to go back in time to pre WWII days when joblessness was rampant, unionization low and often illegal, employment standards non-existent, and when competition among workers forced them and their kids into poverty. It was called a Depression.
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HUFFPOST SUPER USER
Francmon
Homo homini lupus
03:08 PM on 07/18/2012
I get this feeling we are about to live the lives of the mid 19th century British factory workers when industrial barons controlled everything, including politics, in the open and without laws to curb their greediness. What kind of society will our children live in ???
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HUFFPOST SUPER USER
Glass Cannon
Let every eye negotiate for itself.
05:19 PM on 07/18/2012
They'll have to riot in the streets to force change, just like our great-grandparents.
09:54 PM on 07/18/2012
Our children will be too busy working 10 hour days6 and a half days a week to notice.
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HUFFPOST SUPER USER
Francmon
Homo homini lupus
10:20 PM on 07/18/2012
How I see it too... Really sad future...
03:02 PM on 07/18/2012
The grinding down and eventual destruction of the middle class began with the rush to "free trade" back in the late 80's and early 90's. The sad story of globalization is not lifting those in developing countries up to our standard of living, it's grinding us down to their's to the profit of multi national corporations and the politicians they have bought and paid for. Avg worker pay has been stagnant for 20+ years now while corporate profits soar.

Mr.Hudak is a career politician with less than 2 years in the workforce between university and political office. He has NO idea at all about the realities of the common working stiff. I think what this country needs is a more "flexible" and competitive remuneration system for politicians that is tied to the avg wage of their riding.

I wonder how Mr. Hudak would feel if his pay was tied to the median pay of the people he represents. Using the Catepillar example, that would be around a 60% reduction to Mr.Hudak's $116,000 annual government salary. Now that's some flexibility I could get behind.
02:38 PM on 07/18/2012
Sid - Your associates' productivity in many cases doesn't meet the wage expectations so really what do you expect.
02:27 AM on 07/19/2012
Sid's associates are bank managers and CEO's?
01:34 PM on 07/18/2012
"the race to the bottom." Large capitalist corporations are intrinsically a form of organized psychopathology. Apart from the broader economic ramifications of a corporatist 'race to the bottom', we should pay a lot more attention to the moral and ethical ramifications of this corporatist 'race to the bottom' -- for it is also a moral and ethical 'race to the bottom', which has a name: sociopathology. Honestly ask yourselves: will you or your children really be advantaged by such a moral and ethical 'race to the bottom'?