Imagine A Politician Keeping Promises

[August1991]

Though technology tends to increase wealth and leads to general welfare, look at what it took for the benefits of the industrial revolution to be shared across society. A binary and inflexible view of these things doesn't help. I'd like somebody to pay attention to the fact that there are losers here (many of us) and to do something about it.

I don't think anyone would argue in favour of delaying the introduction of new technology on the grounds that it is better to change slowly.

Your example of the industrial revolution is a poor one. (See here for evidence about rising incomes in early 19th century England.) Closer to home, would you have the government forbid the sales of faster processors for several months?

Some argue in favour of compensating people who lose their jobs because of outsourcing or because of new technology. Well, that's why we have EI and it covers (in theory) anyone who loses their job for any reason.

No government could possibly correct for all the unfairness in the world. OTOH, a government can possibly reduce the number of lost chances. Everytime the government stops a Canadian from dealing with a foreigner, that's like making the Canadian go back to washing clothes by hand. It's a lost chance.

[Riverwind]

Technological change is limited by science - change can only happen relatively slowly. Outsourcing can happen extremely quickly since there is a near infinite supply of workers in poor countries.

That's ridiculous. The changes caused by radio, cars, telephones, computers, the Internet, the printing press had dramatic consequences for people at the time.

But in all cases in the past there was a clear path for workers (or their children) to follow. When farms mechanised, there were opportunities in factories. When the factories started closing there were opportunities knowledge based service industries. Now the knowledge based service industries are going and there is no where for the next generation to go. That is what makes this round of outsourcing so disturbing and why I think it will end up taking more away from out society that it gives back.

[Michael Hardner]

I don't think anyone would argue in favour of delaying the introduction of new technology on the grounds that it is better to change slowly.

Your example of the industrial revolution is a poor one. (See here for evidence about rising incomes in early 19th century England.) Closer to home, would you have the government forbid the sales of faster processors for several months?

As you said in your first paragraph, no one would argue this.

The link didn't seem to mention anything about the huge political and social upheavals that occurred in that period. Again, your tack seems to be to throw up your hands. I'm not saying we should ban technology, or stop free trade though you keep trying to pin that on me.

My question is: are we going to do nothing about this ? And if so, will history repeat itself ?

[August1991]

When farms mechanised, there were opportunities in factories. When the factories started closing there were opportunities knowledge based service industries.

I think you are putting the cart before the horse. Factories opened because there were farm workers now available for new employment.

On the rare occasions I watch TV, I am always astonished by the number of channels. Each of these channels requires content. In the centre of Montreal on Ste-Catherine Street, there is a TV music studio (Musique plus?) broadcasting all the time from a storefront. All of this requires thousands of employees. These jobs didn't exist 30 years ago. Why not? Well, too many people were busy typing on typewriters, counting cash in banks and looking for a payphone. I have no idea what new products or services will be available in the future. There is no end to the ways in which people can deal with one another.

[August1991]

there was a period of adjustment during the industrial age that produced a good amount of social strife, and violence. Farm labour flooded into the cities to take jobs at market rates and conditions which were unliveable. By the time it all settled out, we had protectionism, unions and the affluent society.

It remains to be seen what will come out of the postindustrial age.

The industrial revolution in England was accompanied by the French Revolution and the Wars of Napoleon. It is easy to confuse the two.

We are living through a period of great innovation now, but I tend to think that people born in 1850 living to 1920 probably saw more changes and innovations in their lifetimes than anybody before or since. The latter part of the 19th century was hardly a period of great social upheaval, excepting maybe the US Civil War.

I used to think that the First World War was the result of backward governments being unable to grasp technological change. I'm not so sure anymore.

In short, I don't know why you connect "social strife and violence" with technological change.

[Michael Hardner]

On the rare occasions I watch TV, I am always astonished by the number of channels. Each of these channels requires content. In the centre of Montreal on Ste-Catherine Street, there is a TV music studio (Musique plus?) broadcasting all the time from a storefront. All of this requires thousands of employees. These jobs didn't exist 30 years ago. Why not? Well, too many people were busy typing on typewriters, counting cash in banks and looking for a payphone. I have no idea what new products or services will be available in the future. There is no end to the ways in which people can deal with one another.

Not a good example. The new television channels use non union technicians and actors, and get subsidies from government for employment to boot. A CBC janitor probably makes more than a producer for YTV.

[Michael Hardner]

The industrial revolution in England was accompanied by the French Revolution and the Wars of Napoleon. It is easy to confuse the two.

We are living through a period of great innovation now, but I tend to think that people born in 1850 living to 1920 probably saw more changes and innovations in their lifetimes than anybody before or since. The latter part of the 19th century was hardly a period of great social upheaval, excepting maybe the US Civil War.

I used to think that the First World War was the result of backward governments being unable to grasp technological change. I'm not so sure anymore.

In short, I don't know why you connect "social strife and violence" with technological change.

What about general strikes ? Boom and bust ? The Russian Revolution ?

[Riverwind]

I think you are putting the cart before the horse. Factories opened because there were farm workers now available for new employment.

Initially factories had to come first because they produced the goods that freed up the workers on the farm. Once the trend was established it was fairly clear what people needed to do to stay employed.

When the factories and small retail stores were closing in the 80s it was very clear that knowledge based jobs were the place to go. However, high school students today have absolutely no obvious career opportunities outside of sales and trades and the trades are only attractive because they are job market that is protected by trade barriers.

All of this requires thousands of employees.

Almost all of these media production jobs could be outsourced and most likely will be if current trends continue. In fact, film production has been one of the leaders in 'outsourcing' as American productions shoot movies in Canada to take advantage of lower labour costs.

Simply put I am not willing to place blind faith in an economic ideology anymore than I am would place blind faith in a diety. So an answer of 'just trust the system - there will be jobs but you just can't imagine them now' is not good enough.

[Hicksey]

We can import skilled help in pretty much any field and bring the wages down if we'd like to.

A competant engineer in India or China works less than a burger flipper a MacDonald's in Canada. You can push down the wages of skilled workers by importing labour but that does not address the high cost of living in Canada created by high paying low skilled jobs. That is why Americans are split on the Mexican immigration issue - they know they need the cheap lobour pool in order to compete globally but are concerned about the concequences for their society.

In Canada we will be forced to import the cheap labour as well in order to ensure real value added service jobs (i.e. the one's that produce new wealth and don't simply spend tax dollars) have a chance to compete in the global marketplace.

I agree, there are way too many jobs out there that I could train an ape to do as good as the union worker that pay over the top wages.

All it achieves to unionize and pay high wages to unskilled workers is to raise the cost of goods they produce and make everyone's dollar worth less.

[scribblet]

We have a friend who has taken a 'voluntary layoff' from GM for the summer, he gets unemployment plus GM tops him up to close to his full salary. No wonder cars are expensive....

Back to keeping promises:

Canada's new NORAD treaty with the United States has passed through the House of Commons.

The real news behind the news is that Harper is delivering on his promise to allow Parliament to debate and ratify treaties and international agreements made by the government. This is an essential plank of democracy.

[Hicksey]

We have a world where wealth has been distributed unevenly for centuries. We are going to a world where wealth will be distributed much more evenly. This will be great for the people living in poor countries because their standard of living will go up. However, this leveling of wealth will cause the standard of living to decrease in rich countries.

Wealth distribution never works. Right now we reward achievement through wealth. Without the reward there's no reason to achieve. This equal share of the pie bit is a pipe dream. This world was founded upon capitalism and achievement is yearned because people can profit from it. If we all received the same why be a plumber and wallow in other peoples' waste all day when you can be a pump jockey at a gas station and get the same? A few will respond, but most people have been motivated to achieve and they built this world because they were able to receive compensation according to their risk whether that be as a worker, an employer, and venture capital specialist, etc.

Let me guess Riverwind, you're an NDP supporter? Socialism the likes of this garbage could only come from someone that far left.

[Michael Hardner]

Wealth distribution never works. Right now we reward achievement through wealth. Without the reward there's no reason to achieve. This equal share of the pie bit is a pipe dream. This world was founded upon capitalism and achievement is yearned because people can profit from it.

You're posting as though the present system was arrived at through a thoughtful process, when it was arrived at through piecemeal trial-and-error, and politics. The relative peace and prosperity of the mid-late 20th century was achieved through a very chaotic process.

All in all, producers have a natural advantage because the demand for labour will always be lower than the supply in the long run.

[Riverwind]

Wealth distribution never works. Right now we reward achievement through wealth. Without the reward there's no reason to achieve.

You don't really understand my point. I made no comment about whether income _should_ be distributed equally among _individuals_. I said that globalization _will_ cause income to be distributed more equaly across _countries_. As a result, many people in rich countries will find that they get a lot poorer while the wealth of poor countries goes up. This will have the effect of turning the societies in rich countries into something like China and India where a large underclass with no access to public services provides cheap labour for elite.

I got started on that track by responding to a comment about highly paid unionized bus drivers. My feeling is that it is a mistake for our society to protect over paid low skilled jobs because it increases the cost of living for everyone and makes it more difficult for skilled workers in Canada to compete with skilled workers in countries that do not pay as much for low skilled workers. I am fairly certain that no NDP supporter would ever make such a comment.

[August1991]

I said that globalization _will_ cause income to be distributed more equaly across _countries_. As a result, many people in rich countries will find that they get a lot poorer while the wealth of poor countries goes up. This will have the effect of turning the societies in rich countries into something like China and India where a large underclass with no access to public services provides cheap labour for elite.

And I declared that view an obsessive form of zero-sum thinking. There is no reason to believe that as people in India and China become richer, people in Canada will become poorer. I gave as an example that if I find a faster way to drive to work, how will that hurt anyone else? If the Chinese or Indians find a better way to use their resources, how does that hurt anyone anywhere else in the world?

I got started on that track by responding to a comment about highly paid unionized bus drivers. My feeling is that it is a mistake for our society to protect over paid low skilled jobs because it increases the cost of living for everyone and makes it more difficult for skilled workers in Canada to compete with skilled workers in countries that do not pay as much for low skilled workers.

It is probably true that since North Koreans cannot trade with foreigners, the North Korean regime can enact some foolhardy measures. So, as people can trade more freely with foreigners, the cost of foolish government measures becomes more apparent. Is that a bad thing?

Riverview, I still don't understand your fear that some Canadians will be driven into dire third-world poverty if we open up to world trade.

Finland and the Soviet Union traded for decades despite having two completely different social systems. My grocer and I trade on a regular basis and yet I have no idea how she has arranged her family situation. Canada has a state medical system and the US has a largely private system and yet people in the two countries trade frequently. Canadians living in large cities pay high property taxes and rural Canadians pay lower property taxes and yet both beneficially trade.

In all these examples, I see no reason that opening to trade would cause convergence, impoverishment of one group or a "race to the bottom".

If Canadians are willing to pay higher taxes to have unionized public workers earning more, then that is a question for the Canadian political process. It has nothing to do with the benefits of opening up to trade.

If the Canadian government passed a law stating that all brown-eyed people must put 5 kg weights in their shoes at all times, or giove $5 every day to a blue-eyed person, that would make some Canadians poorer (and others richer) but it wouldn't make the argument for free trade any different.

[fellowtraveller]

Back to the OP, if that is allowed.....

You have to admit, whether you agree with Prime Minister Stephen Harper's policies or not, it is refreshing to see a politician make good on his election campaign promises.

It is unusual, but not unique. Klein won a couple of elections easily by doing exactly what he promised, and that is a reality completely overlooked by his many critics. Overlooked at their peril really, since he remains very popular despite having lost the fiscal plot the last few years...

[Michael Hardner]

In all these examples, I see no reason that opening to trade would cause convergence, impoverishment of one group or a "race to the bottom".

Because many jobs in Canada are paying far above the going rate for this position. Canada as a whole will do better economically but not people who work in such industries. Even living at the minimum wage, the average Canadian family would be far better off than the average person on this planet but those employing highly paid workers would benefit the most.

I cited a statistic from the US government that showed that the top .01 % of earners are the people who are winning under the new global trade paradigm, even though times are relatively good.

[Hicksey]

Wealth distribution never works. Right now we reward achievement through wealth. Without the reward there's no reason to achieve.

You don't really understand my point. I made no comment about whether income _should_ be distributed equally among _individuals_. I said that globalization _will_ cause income to be distributed more equaly across _countries_. As a result, many people in rich countries will find that they get a lot poorer while the wealth of poor countries goes up. This will have the effect of turning the societies in rich countries into something like China and India where a large underclass with no access to public services provides cheap labour for elite.

I got started on that track by responding to a comment about highly paid unionized bus drivers. My feeling is that it is a mistake for our society to protect over paid low skilled jobs because it increases the cost of living for everyone and makes it more difficult for skilled workers in Canada to compete with skilled workers in countries that do not pay as much for low skilled workers. I am fairly certain that no NDP supporter would ever make such a comment.

I must have really misunderstood then. I am sorry for calling you an NDP. That was uncalled for.

I agree with your second paragraph. As a society we have over-priced our labour on the world market.

[Riverwind]

that view an obsessive form of zero-sum thinking. There is no reason to believe that as people in India and China become richer, people in Canada will become poorer.

August,

Your arguments would be more compelling if you could clearly identify come some high paying career prospects for a person graduating from high school today. I cannot think of any that are not not protected by the trade barrier of immigration controls. This was not the case during the manufacturing restructuring of the 80s when there was a wide range of opportunities from technology to health services. Today all of these jobs can and will be done by cheap labour in countries like India and China. As these jobs disappear from the high cost of living economies the wage scales will gradually drop until they are low enough to compete with workers in the low cost countries.

That is why I see guest worker program as a important part of Canada's economic strategy. Allowing guest workers will decrease the cost of living in Canada but do it in a way that minimizes the negative impact on Canadians. I read one editorial that suggested Canada and Mexico could form a mutually beneficial trading relationship based on guest workers.

[Hicksey]

that view an obsessive form of zero-sum thinking. There is no reason to believe that as people in India and China become richer, people in Canada will become poorer.

August,

Your arguments would be more compelling if you could clearly identify come some high paying career prospects for a person graduating from high school today. I cannot think of any that are not not protected by the trade barrier of immigration controls. This was not the case during the manufacturing restructuring of the 80s when there was a wide range of opportunities from technology to health services. Today all of these jobs can and will be done by cheap labour in countries like India and China. As these jobs disappear from the high cost of living economies the wage scales will gradually drop until they are low enough to compete with workers in the low cost countries.

That is why I see guest worker program as a important part of Canada's economic strategy. Allowing guest workers will decrease the cost of living in Canada but do it in a way that minimizes the negative impact on Canadians. I read one editorial that suggested Canada and Mexico could form a mutually beneficial trading relationship based on guest workers.

We can alleviate the problem by training people with new skills when they become unemployed. The jobs you're talking about a person could ostensibly train an ape to do as well as a human being. But in higher skilled jobs lies not an untapped industry, but a greatly underserved one with thousands of jobs standing empty at any given time. We can take August's idea much further by both making everyday goods cheaper with foreign labourers willing to take lower wages, and by ratcheting up the incomes of our citizens by ratcheting them up the skill ladder.

Now I know you're going to argue that even those jobs are being outsourced. That's really not the case. Most of those jobs we hear about are helpdesk jobs which aren't really skill jobs at all. Anyone that can speak english and can read from a computer screen can do them. I've done them. And with the experience I have with computers and software, I was usually the one of best of the bunch. That's not because I was ultra smart, but rather because the rest were people with good telephone skills that can read.

And these skill jobs range from the skilled trades, to truckers, to computer repair technicians, to network specialists, all vocations that pay well with a little experience. And in all these industries, companies are clamoring for more qualified workers. We are farther off to get people's wages up because they've earned it than to artificially raise wages. All that does is raise prices to make up for the higher wages and within 12 months their dollar is worth no more than it was before and everyone else's is worth a pittance compared to before.

[Riverwind]

That's really not the case. Most of those jobs we hear about are helpdesk jobs which aren't really skill jobs at all.

Call center outsourcing is yesterday's news. Look at this recent announment by IBM: http://www.informationweek.com/news/showAr...cleID=181501954

In a stunning example of how India has progressed from a country to which businesses farmed out routine programming and back-office work into a center for leading-edge innovation, IBM disclosed Wednesday that it is moving all of the design and development of its vaunted business consulting offerings to [india].

In other words, IBM has moved its biggest money making division to India. The same thing is happening in healthcare, finance, insurance and any other 'knowledge based' industry. There are no longer any high skilled jobs that people in Canada could train for today that won't be outsourced in a few years. That is what makes the future so bleak.

And these skill jobs range from the skilled trades, to truckers, to computer repair technicians, to network specialists, all vocations that pay well with a little experience.

All jobs which only pay well because they are protected by immigration rules that limit the supply of candidates.

[Michael Hardner]

We can alleviate the problem by training people with new skills when they become unemployed. The jobs you're talking about a person could ostensibly train an ape to do as well as a human being. But in higher skilled jobs lies not an untapped industry, but a greatly underserved one with thousands of jobs standing empty at any given time. We can take August's idea much further by both making everyday goods cheaper with foreign labourers willing to take lower wages, and by ratcheting up the incomes of our citizens by ratcheting them up the skill ladder.

August's example isn't exactly apt. Outsourced jobs are done in another country, while jobs replaced by technology presumably need higher-skilled jobs to replace them.

What kind of high skilled jobs are you talking about ?

Now I know you're going to argue that even those jobs are being outsourced. That's really not the case. Most of those jobs we hear about are helpdesk jobs which aren't really skill jobs at all. Anyone that can speak english and can read from a computer screen can do them. I've done them. And with the experience I have with computers and software, I was usually the one of best of the bunch. That's not because I was ultra smart, but rather because the rest were people with good telephone skills that can read.

As River posted, a lot more than helpdesk has gone over. CGI (Bell) recently sent 325 high tech jobs to India. The auto industry is next... on the horizon anyway. Cars will become much cheaper to those who can still afford a car.

And these skill jobs range from the skilled trades, to truckers, to computer repair technicians, to network specialists, all vocations that pay well with a little experience. And in all these industries, companies are clamoring for more qualified workers. We are farther off to get people's wages up because they've earned it than to artificially raise wages. All that does is raise prices to make up for the higher wages and within 12 months their dollar is worth no more than it was before and everyone else's is worth a pittance compared to before.

Network specialists ? Sure, but there are always younger people willing to work for less. I wouldn't worry about higher wages right now if I were you, or inflation from higher wages.

[theloniusfleabag]

Dear August1991,

Closer to home, would you have the government forbid the sales of faster processors for several months?

No, companies do this of their own volition to increase profits.

As to outsourcing, (and forgive me if this is redundant, I jumped from pg. 3 forward) Yuo may recall the advent of the 'horseless carriage'. What happened to the excess horses? Technological advancement meant that they were redundant, but in their case, it was the glue factory or French restaurants. Those that reap the rewards of outsourcing become less in number, for less need to 'go in' for them to 'get more out'. Not all of these 'redundant' workers can become corporate executives (to make more money off the backs of 'labour rich' [read: poor] countries), and definitely not 'all'.

While you may argue that the 'pie' may get bigger, the name of the game is to get all of the pie to yourself.

[Hicksey]

OK then. Criticism duly noted.

Now. Better solutions. Less people working in less jobs for more than their job is worth is hardly an answer.