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.