by Terrance Hunsley
The NAFTA negotiations are likely to be a tough uphill slog, given Mr Trump’s belligerent stance. It is hard to see how Canada will make much headway on subjects such as gender rights, indigenous rights and environmental regulations.
But these issues are affected by international trade agreements, as is the whole range of labour and employment law, and the provision of social protection. As we have reduced barriers to trade and witnessed the globalization of capital and production over the past three decades, Canada has seen both job destruction and job creation. We have benefitted from low cost products and a lot of good new jobs. But we have not done much to protect the workers who lost their occupation and in many cases, were pushed permanently down the wage scale. Federal and provincial governments “liberalized” labour market regulations, permitting employers to hire and fire at will, fragment jobs into part-time employment, pay low wages with few benefits. To ensure that workers would take the lower quality opportunities, unemployment benefits were slashed and for several years, minimum wage and social benefit increases were held below inflation. Monetary policy kept inflation low and unemployment high, so wage demands would be weakened. Temporary foreign workers brought in to fill low wage jobs also contributed to undermining the bargaining power of workers.
The flattening wages and reduced unemployment protection were to some extent absorbed by Canadian families through increased hours of work, given the big demographic wave of baby boomers and the big increase in female labour force participation. From the late sixties to the early eighties, we went from predominantly one-earner families to predominantly two-earner families.
The overall result, as demonstrated by people like John Stapleton of the Metcalfe Foundation and Trish Hennessy of CCPA, is that dynamic economies like Toronto have become bifurcated into classes of affluent professionals and low-wage precarious service workers. As the Centre for the Study of Living Standards has shown, not only did productivity growth slow to a snail’s pace but the benefits of what did take place went almost entirely to capital, as median wages stagnated. Only in the past decade have wages grown faster than inflation. So economic inequality increased. Not entirely due to globalization of course, because technological advances and automation have strong influences as well. But the two big waves are integrated, and it is fair to suggest that public policy has responded predominantly to “international competition”.
Canada is fully vested in the global economy and, while hugely dependent on the US market, is attempting to negotiate trade agreements around the world. If we want to create and sustain good jobs, then workers are going to have to be better, smarter, faster. And barring an astonishing global agreement on taxing corporations, our business taxes have to be kept low and “competitive” as well. So global competition has come to mean that workers and governments compete for the investments of global corporate entities.
In the CUSFTA, and carried somewhat into the NAFTA, private businesses were even given a right to sue the government if something was done which could hurt their business plans. Such as introducing a new public monopoly like pharmacare, or a national disability insurance program. Private firms could make a claim that they should be compensated for loss of business in the area.
Yet the raison d’être of democratic governments is to look after the security of their population. Canada has championed and endorsed human rights instruments, including the International Covenant on Economic, Social and Cultural Rights (ICESCR). It details many social and economic rights covered by the Universal Declaration, including the right to decent employment which sustains dignity, and progressive implementation of a full employment policy. (The US is also signatory to the covenant, but has not formally ratified it). But international competition has undermined the capacity of governments everywhere to progressively advance economic rights, and right wing politicians and business interests have fought hard to paint these concerns as communist or socialist, and a threat to “free markets.”
So to secure and advance human rights, and to protect the quality of employment, we should ensure that they are respected by trade agreements. Canada needs to nurture a competitive labour force, by having the best lifelong education and training system in the world. We need to ensure that victims of economic disruption are fully retrained and prepared for good jobs. All workers need economic security – a decent standard of living – through realistic minimum wages, wage supplementation, income guarantees, job creation in economic and social infrastructure, and through international standards respected by trade agreements. Global trade has vastly expanded wealth. That wealth needs to be shared equitably, and free trade by itself will not make that happen.