Recession and the failure of the left

TheStar.com – Canada
Published On Sat Oct 09 2010.   By Thomas Walkom, National Affairs Columnist

Today’s economic slump is routinely compared to that of the 1930s. But the most striking difference is political. The Great Depression gave a boost to both labour unions and the left. This time, the opposite is happening.

On the labour front, two recent events make the point. In Canada, the union representing 30,000 Loblaws workers has agreed to let the company convert more of its outlets into superstores that pay lower wages.

In the U.S., the United Auto Workers has agreed to let General Motors halve wages for about 40 per cent of its workforce at a subcompact car plant in Michigan.

That unions make concessions during hard times is not news. The United Food and Commercial Workers made the Loblaws deal (which does keep wage protection for existing employees) in the face of withering price competition from non-union Wal-Mart.

Still, it’s worth noting the solution was to bring unionized workers down to Wal-Mart levels rather than organize Wal-Mart workers and bring their wages up.

And this is perhaps the biggest difference between now and the ‘30s. Then, unions were seen as the way forward for workers who wanted a better deal.

Today (with a few notable exceptions) unions tend to be viewed as bastions of privilege, latter-day versions of medieval guilds that exist only to protect the lucky few.

Indeed, unions have become bastions. The roughly 30 per cent of Canadian workers who still belong to unions enjoy better pensions and benefits, higher wages and more paid holidays than the 70 per cent who do not.

The underlying reasons for this gap are well known and have to do with the shift from a manufacturing, factory-based economy to one dominated by small, difficult-to-organize service businesses.

But unionized workers themselves have also contributed to the perception of privilege by focusing on immediate bread and butter issues such as their own wages while ignoring the larger political context.

Unions cannot thrive when they represent only a minority of workers. The first serious jolt will send them spinning – which is what’s happening now.

In theory, this slump should have been a bonanza for the left. Triggered by the greed of bankers, it exposed the fragility of an economic system that had seemed invincible.

Yet in practice, the left staggered. A centre-left government was driven from power in Britain. In next month’s U.S. elections, the right is expected to clean up.

In Canada, the recession has given no obvious boost to the leftish New Democrats.

Federal Liberals, meanwhile, appear to be playing a delicate, poll-driven balancing game as they try to distinguish themselves from Stephen Harper’s Conservatives without appearing left-of-centre.

Compare this to the 1930s, when even R.B. Bennett’s Conservative government was forced to belatedly embrace leftish ideas such as nationalization.

Ironically, one reason for the left’s failure in this slump is that its traditional solution – to spend money—worked. The decision by G20 leaders to stimulate the world economy prevented a catastrophe.

In the ‘30s, Canada’s unemployment rate hit 20 per cent. This time, it is less than half that.

But as a result, the mood remains confused. Unlike the crisis of the ‘30s, this one has not caused large swaths of Canadians to blame, or even question, the capitalist system.

Rather we blame taxes and the wages paid garbage collectors. We want retail workers to receive Wal-Mart wages because, with money tight, we like Wal-Mart prices. We have no sympathy for unionized workers because – well – what’s in it for us?

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