RBC offers lesson in how to curb job outsourcing
TheStar.com – news/Canada – To deal with the war on wages, the entire economy, including free trade, must be rethought.
Apr 17 2013. By: Thomas Walkom, National Affairs
The war on wages is ripping the heart from this country. That is what is wrong with the federal temporary workers program. That is what is wrong with outsourcing jobs.
Canada works only when most people think they have a stab at making a decent living. Remove this and you remove the glue that holds everything together.
The furor over the Royal Bank of Canada’s decision to outsource 45 high-tech jobs to India has ignited a response among so many precisely because it speaks to the heart of our current dilemma.
We have a skilled work force whose children are training to be equally skilled. Yet as fast as we graduate people capable of doing valuable and productive jobs, those jobs disappear.
Some are simply degraded. These are the full-time jobs transformed into fragile and part-time contract employment.
Some, including many that are highly skilled, are outsourced overseas.
Some are given to foreign temporary workers legally permitted by Ottawa to be paid less than the going wage.
This attack on wages, while not entirely new, has been accelerated by the global slump.
Put simply, if a tepid economy prevents businesses from making money, they are forced to rely on cost-cutting. As readers keep reminding me, even the Star has outsourced jobs.
So what can be done?
The orthodox answer is: Nothing. The Conservative government and its acolytes argue that if free markets demand the destruction of decent jobs here in Canada, that destruction is inevitable.
The only hope they can offer is that, eventually, the market will produce something better. In that sense, Prime Minister Stephen Harper and his Conservatives are like the vulgar Marxists of another century, counselling patience as the inevitable process of history works itself out.
Harper has even tried to hurry history along by enacting new rules that make it easier for Canadian employers to hire low-wage temporary foreign workers.
The alternative to this nothing-can-be-done orthodoxy is more complicated.
First, the temporary foreign workers program needs to be radically overhauled.
In a rational country, employers would be allowed to bring in temporary foreign workers only under the rarest of conditions. Using the program as a vehicle for doughnut shops that want cheap counter help is a grotesque misuse.
But the temporary foreign workers program is only part of the problem. Far more destructive is the trend to outsourcing.
Foreign outsourcing removes jobs completely from Canada. Domestic outsourcing has the virtue of keeping the work at home. But it replaces good jobs with those that are precarious and part-time.
In order to deal with these problems, the entire nature of work has to be rethought. Labour has to be treated as more than a commodity operating at the whim of market forces. Instead it needs to be seen as something valuable in itself.
Some governments have called for a so-called Tobin tax on international capital movements in order to reduce the harm caused when speculative money sloshes back and forth across borders.
Perhaps a similar tax on international labour outsourcing would discourage Canadian companies from exporting jobs abroad.
Certainly, more rigorous provincial employment standards laws could deter companies from casually outsourcing good jobs to domestic contractors.
Beyond these measures, however, a complete rethinking of the economy is required. The free market is not working.
A more active government willing to engage in Keynesian-style spending and tax measures would help. But free trade must be rethought as well.
Canada has relied on trade since pre-Confederation times. But Canada has not always practised unfettered trade. That is recent.
In the last long recession, that of the 1870s to ’90s, a Conservative federal government rejected rigid free trade orthodoxy in order to, successfully, create jobs at home. Perhaps the time to curb unfettered trade has arrived again.
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