Wearing Two Hats Gives Me a Headache

We have a new Premier in British Columbia, Christy Clark. One of her first acts as Premier was to shred my labour budget for the year. I run a retreat centre in rural BC and we’d already set our budget when she announced an increase in the minimum wage. In a three stage process over one year the minimum wage will rise from $8/hr (the lowest in the country) to $10.25/hr.. It rose to $8.75 immediately. On November the 1st it will rise to $9.50 and on May 1, 2012 it will complete its rise to $10.25 (the highest is $11/hr in Nunavut). We hire many young people for the busy summer season and this announcement shredded that budget while giving us a year’s notice that more is to come.

I have been a union supporter all my life and my children have worked for the minimum wage for many years in different parts of the country. So, the social justice part of me cheered at this announcement. At the same time the business manager in me groaned at this sudden 10% increase in my labour budget. This battle between the two parts of my brain has kept me awake more nights than I care to admit.

It reminded of Ontario farmers I know who belong to unions in the auto plants in which they work, and who also support the idea that labour laws for farm labour should be different than labour laws for industrial labour. They are living a contradiction based on power. In the auto plants there are many workers and only a handful of employers. If the workers don’t band together the employers will take advantage of their disunity and cut wages and benefits.

In the agricultural sector, farmers grow larger and larger for less and less return. With this kind of pressure, farmers want to control their costs as much as possible and so panic at the idea that the price of hired labour might increase at the same rate as fertilizer or farm fuel. What is hard to see is how this focus on unionized farm labour is a distraction from the real issues.

What is real is the lack of power individual farmers have in the bargaining for the products of their farms. There are many farmers and only a handful of grain buyers or meat packers. It is agribusiness that protects its profit margin and captures the gains in productivity while farmers continue to struggle. They would be better off organizing to lower the costs of industrial farm inputs than heaping scorn on organized labour. The real target of farm labour organizing is migrant workers from Mexico and Jamaica who harvest fruit, grapes and tobacco on farms in BC and Ontario. God bless these workers who want what we take for granted like universal health care, education and pensions.

As an employer, next year I will still be paying minimum wage but the students I hire will be earning 28% more. I will probably spend less on capital improvements but it won’t make the difference between success and failure. As a person and a citizen I am pleased that the government is forcing me to do the right thing for my employees.

Wearing Two Hats Gives Me a Headache
Another Moral Economy Column
By Christopher Lind
May 26, 2011

• Visit my website: christopherlind.ca
• Visit my latest book: Rumours of a Moral Economy
• For other moral economy blogs see moral-economy.blogspot.com
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• This column is published in The Western Producer, Canada's largest agricultural newspaper

The Issue That Dares Not Speak Its Name

Some years ago I was giving a talk in Red Deer on the farm crisis. Afterwards, I was approached by a young man who had always wanted to be a farmer. Recently he had put in an offer on a pretty half section of land but he was outbid by a Calgary lawyer. The lawyer wanted to build a country house for his family to use on weekends and holidays. Now the lawyer wanted to hire the young man to work the land for him. The young farmer was confused and distraught. I wondered: why isn’t he mad as hell? He was trying to be his own boss and now he was being offered a job as a hired hand. This is really a taboo subject, I thought to myself, because this is a problem of class!

In the first half of the 20th Century there were dramatic declines in the share of the national income earned by the richest members of various countries. This was a consequence of the power of organized labour to bargain for a greater share of corporate profits. Even though most farmers aren’t unionized, they benefited from there being fewer rich city types outbidding them for land. However, in the last two or three decades in the US there has been an almost complete recovery of income share by the richest 10% of the population and a corresponding decline in union membership and power.

Income inequality in the United States is the worst of all the developed countries. By the middle of the last decade, the top 20% of income earners earned almost half the total national income, which was 13 times the share of the poorest 20%.

The trend in Canada has been similar. Since 1998 Canada’s top 100 CEOs saw a 262% increase in compensation, pocketing an average of $9.1 million in 2005 compared to $3.5 million in 1998. Meanwhile, the average Canadian worker made just over $38,000 in a year, a 15% increase over the average earnings of $33,000 in 1998.

According to economist Armine Yalnizian, in 2004, the average earnings of the richest 10% of Canada’s families raising children was 82 times that earned by the poorest 10% of Canada’s families. This is almost three times the ratio of 1976 when it was approximately 31 times.

Some people think that social class is “the issue that dares not speak its name!” but I’m beginning to wonder. We now find ourselves in the middle of a federal election campaign. In spite of a lot of posturing the issues have not yet been defined. Is it possible the election could be fought on the question of whether we want to build a Canada that is more equal rather than less?

In 2004 the Leger Marketing Group surveyed Canadians and asked whether it is possible to fight against social inequality. A remarkable 74% said: yes! When asked which kind of inequality was the most serious, 28% of Canadians said income inequality, 27% said health care, 17% said education and 12% said housing. This was how Canadians felt 7 years ago and inequality has grown significantly since then. If I could wave my magic wand I would ask Canadian voters which political platform is more likely to shift income away from the corporate dragons of Bay Street and toward my neighbours who live from one pay cheque to the next.

The Issue That Dare Not Speak It’s Name
Another Moral Economy Column
By Christopher Lind
March 31, 2011

• Visit my website: christopherlind.ca
• Visit my latest book: Rumours of a Moral Economy
• For other moral economy blogs see moral-economy.blogspot.com
• Visit my Facebook account: www.facebook.com/christopherlind2
• This column is published in The Western Producer, Canada's largest agricultural newspaper

Can An Economy Ever be Moral?

Another Moral Economy Column
By Christopher Lind
February 2011

If I said Big Business can never be moral, would you agree with me? Why is that? In general, people are pretty cynical about commercial relationships. The bigger the business, the more cynical people are. With size, all relationships become more impersonal. You don’t know the owner and they don’t know you, your family or your community. “Buyer beware” is the dominant motto and you better be very careful if you want to protect yourself against the predatory practices of … (shall we make a list?) … oil companies, used car salesmen, cell phone companies, banks etc.

When I ask people what can be done to make the economy more moral, they typically respond with ideas for personal reform. Banks should have Codes of Ethics so employees are forced to be honest. Oil companies should have training programs for their executives so employees don’t lie, and so on.

These are good responses as far as they go, but that isn’t far. You see, I actually think big business can be moral but all of us are caught up in social systems that are far larger and more influential than our personal relationships. Strong personal ethics are necessary for a moral economy but they are not sufficient. A moral economy also requires a social ethic. What goes into a social ethic? There are many principles but one of them would be mercy.

Bankruptcy is an example of the principle of mercy applied to modern economies. Bankruptcy is a declaration that the commercial enterprise is broken and cannot be fixed. So, the principle of mercy is applied. The remaining assets are divided among the creditors according to certain criteria and the enterprise is over. The parties are now free to restart this or another enterprise. This principle of mercy applies both to personal bankruptcy and to corporate bankruptcy.

Sometimes bankruptcy is thought to contradict the principle of responsibility. We all agree that in general, people who borrow money should pay it back, whether they are individual homeowners or big corporations. In practice though, the larger the corporation the more likely it is to be rescued by governments. This is especially so if the corporation is so interconnected to other corporations that its failure threatens the whole lot.

In the United States pressure is building to address the contradiction as virtually bankrupt companies like the insurance giant AIG, and formerly bankrupt corporations like GM, pay out million dollar executive bonuses while homeowners continue to be foreclosed, because banks refuse to renegotiate mortgages. In this case mercy is being applied to investors and responsibility forced on homeowners. Some people argue that the contradiction should be resolved by forcing the same punishment on investors as on homeowners. I take the opposite view. Mercy is a powerful principle and should be available to investors and homeowners, farmers and students alike. It is a reflection of one of the oldest and widely supported moral rules known to humanity – the Golden Rule. Do unto others, as you would have them do unto you.

• Visit my website: christopherlind.ca
• Visit my latest book: Rumours of a Moral Economy
• For other moral economy blogs see moral-economy.blogspot.com
• Visit my Facebook account: www.facebook.com/christopherlind2
• This column is published in The Western Producer, Canada's largest agricultural newspaper