Economy is Stephen Harper’s weak spot despite Conservative bragging
TheStar.com – news/Canada – Stephen Harper’s much-vaunted economic management skills aren’t producing results. No wonder he’s talking about cable TV.
Oct 16 2013. By: Thomas Walkom National Affairs
Prime Minister Stephen Harper prides himself on his handling of the economy. His economic skills are cited time and again as reasons for voting Conservative.
This sound-management mantra will almost certainly be repeated as MPs gather in Ottawa this week to re-open Parliament.
But five years into the Great Recession, it is a mantra that is wearing thin.
The truth is that Canada’s economy is not doing well. Official unemployment may be hovering around the 7 per cent mark (last month it was 6.9 per cent). But official unemployment figures do not take into account those who are underemployed or who have simply given up looking for work.
As United Steelworkers economist Erin Weir notes, the proportion of Canadian adults with jobs is no better now than it was in 2009, during the worst of this recession.
Which is another way of saying that job growth under this government hasn’t kept up with population growth.
Not all of this is Harper’s fault. Canada’s Conservative government is not responsible for the legislative chaos in Washington that keeps the U.S. economy floundering. Nor is it responsible for the travails of the eurozone.
Similarly, however, the Conservatives cannot take credit for the economic growth in China that has allowed Canada’s oil and commodity sectors to boom.
Still, the Harper government has some manouevring room on the economy. It could be doing more. It is not.
Instead, it is focusing on ill-advised measures that range from unhelpful to counterproductive.
First, after a brief flirtation with stimulus spending in 2009 (and I give Harper credit for that) the government has assumed that Canada’s job woes are entirely structural.
Indeed there are problems with the structure of the economy. Jobs in manufacturing — and even in information technology — are moving offshore; automation is replacing human labour.
But the world is also going through a long cyclical slump, one in which consumers don’t have money to spend and businesses are afraid to invest. In this kind of world, Ottawa’s focus on fiscal austerity — on pulling government money out of the economy — only makes matters worse.
Second, the government is systematically taking aim at anything, from employment insurance to unionization, that keeps wages up. The Dickensian notion here is that full employment can be achieved only if most of us are willing to work for peanuts.
Third, the government is focusing its efforts on the alleged mismatch between jobs and skills. It argues that there is plenty of work around but that Canadians don’t have the right skills to get those jobs.
Don Drummond, a former bank economist now teaching at Queen’s University, burst that particular bubble two months ago in an interview with my colleague, Carol Goar. He said then that he was dubious about the government’s claim that Canada suffers a national skills shortage.
I called Drummond Tuesday to see if he still holds that view — and he does. He pointed out that the government’s own statistical data do not back up its claim of a nationwide skills mismatch. Sure, there are instances where employers can’t find skilled Canadian workers quickly, he said. But that’s always true.
“No one can tell whether we’re dealing with labour shortages or not,” he said. “Essentially we don’t know. We’re dealing with anecdotes.”
As for the government’s fixation with importing temporary workers to meet Canada’s alleged skills shortage, Drummond just chuckles.
Most of those temporary workers, he says, end up doing unskilled work at low wages. It’s not that Alberta sod farmers, for instance, can’t find Canadian workers. It’s just that they can’t find Canadians willing to do backbreaking work at minimum wage.
For Harper, all of this is shaping up as a major political problem. The economy is not improving significantly. Eventually, voters will begin to assign blame.
So it’s no wonder that his Conservatives are already bragging about their plans to reform cable television billing. When bread is lacking, circuses always come in handy.
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