When will politicians act to save jobs?
Posted on September 10, 2011 in Policy Context
Source: Toronto Star — Authors: Thomas Walkom
TheStar.com – news/canada/politics
Published On Fri Sep 09 2011. By Thomas Walkom, National Affairs Columnist
Yes, the economy is deteriorating. For a while, it seemed that Canada had somehow avoided the fate of the U.S. and Europe. Now it’s clear we are not exempt.
And yes, there is a way to ease the stress through concerted government action. But it’s not clear that our politicians — either federal or provincial — are willing to take the risk.
Economy first. Friday’s bleak job numbers from Statistics Canada may have surprised some economists. I doubt they surprised Canadians on the street.
After months of gains, jobs are down. The country shed 5,500 jobs between July and August. The official jobless rate rose marginally to 7.3 per cent.
It would have been higher had thousands not given up looking for work.
True, most of the jobs lost were part-time. But part-time work is today’s reality. These are the jobs an increasing number of people depend upon.
Pick apart the numbers and matters look grimmer. Conventional wisdom holds that economic recovery depends upon the private sector. But last month, almost 21,000 private-sector workers lost their jobs — particularly in construction.
Manufacturing employment had been picking up in Ontario. Now, it too has stalled.
So far, Canada’s abundant supply of raw materials has allowed this country to escape the worst of the global slump. The Chinese want our minerals, the Americans our oil and gas. Our workers provide both.
But even here, the limits are being reached. In August, Canada lost 11,500 jobs in these natural resource industries.
Ironically, the only good news was the result of government spending. Jobs in the public sector rose by 22,000 in August, particularly in areas like health care and education.
I say ironically because the same conventional wisdom that extols the private sector argues that government jobs are a drain — that nurses and teachers are somehow unproductive and that anyone on the public payroll is grossly overpaid.
In the face of today’s harsh reality, a logical government would continue spending public money to support jobs.
But this is not a logical era. In Toronto city council, the Ford brothers focus exclusively on cutbacks.
Provincially, the three main parties insist they can balance the budget painlessly by 2018 — which they almost certainly cannot.
This does not mean there are no ideas. To their credit, Andrea Horwath’s New Democrats do propose wage subsidies for employers who create new jobs And Dalton McGuinty’s Liberals do have, on paper at least, a scheme for long-term green jobs.
Tim Hudak’s provincial Conservatives, however, rely on the traditional right-wing nostrums of tax cuts and deregulation, both of which are largely useless in the current crisis.
Federally, the opposition New Democrats and Liberals are near-irrelevant. In the context of a majority government, they can have little impact.
And the governing Conservatives? They, too, have promised a wage subsidy for businesses that hire new workers — although so far it is tiny.
As well, Prime Minister Stephen Harper has warned his caucus that Ottawa must remain “flexible” to deal with the “fragile” economy.
It’s not clear what this means in practice. But recall that Harper can run counter to his own ideological grain, as he did when he boosted government spending in 2009 to deal with the first stage of this slowdown.
But he has also promised to quicken the pace of cutbacks so as to balance Ottawa’s books by 2014. In light of the quickly deteriorating world economy, will the Prime Minister be flexible enough to delay deficit reduction and boost that very necessary government spending instead? I’m not optimistic.
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Tags: economy, globalization, ideology
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