Political Economy XVI-Labour Market Studies/Trade Deals/Illusions

Feeding Illusions with Labour Market Studies &Trade Deals



George Hewison                                   Political Economy Newsletter XVI                                August 2014


In the earliest days of unionizing, dreams of a different kind of society (where labour power was freely exchanged between labouring producers)[1] motivated the earliest union pioneers to seek unionization, not as an end in itself, but as a means to fulfilling their ultimate dream. It was the power of that dream when seized upon by millions of workers that finally forced employers to recognize the need to take the most extreme edges off their own vision of an unfettered capitalist labour market. Under collective worker pressure, union recognition and the welfare state were established.  It is important to acknowledge that the original dream of a free working class faded under a combination of harsh attacks on militant unionist dreamers; corporate acceptance of unionism and the social contract; a failed socialist experiment predicated on a false promise of worker freedom; and an historical amnesia by the working class as to how unionism and the social contract actually came about.


Collective amnesia is a tremendous obstacle for working class’ success in today’s labour market. Corporate apologists constantly beat the drum for individual solutions to individual worker problems in the labour market. Their drumbeat warns against unionism and solidarity. Worker is pitted against worker in endless competition, both at home and abroad. Most workers know of no other message. And there are so many diversions! The tribalism of support for a workplace or company is implanted deeper than the support for a favourite hockey team…and that’s deep! The differences between the interests of the worker and the employer are expertly camouflaged.


Where employer ideology fails to convince working people that they are in a collegial relationship with their boss and collective worker activity (without the boss) begins to take place, naked economic and political force and the fear factor takes over. Workers contemplating collective action have to weigh up real pain and insecurity that employers, individually and as a class, can inflict.


We know that some employers are in the business to produce commodities. Still others are in business necessary to “facilitating” the commodity-production process and converting commodities to “profit realization” at the end of the production cycle[2]. Taken together, the corporate class has one overall view of the labour market place. That corporate view is that the marketplace should exist to facilitate profit. That view of the marketplace sees minimal restrictions on capital (and maximum restrictions on labour… or by society). That certainly is the view of the 150 C.E.O.s that control 2/3 of Canada’s economy.


Their spin would have us believe that labour market studies are about dealing with the scourge of unemployment. Unemployment is simplified to a matter of training and matching skills to jobs. Such reasoning ignores the theoretical causes for unemployment based on a society premised on maximizing profit and a very practical reality that there are six unemployed for every job opportunity in contemporary Canadian society. Media fanfare to the contrary, the concern of most labour market studies is not really about growing unemployment levels.


In fact, from the employers’ perspective, rising unemployment has a positive and dampening effect on the overall contracting price for wages and salaries in the market place. The more desperate the workers, the lower are the wage expectations. Cuts to welfare and disability rates feed into a climate of worker desperation. For employers, cuts to Employment Insurance are generally good and raising the minimum wage, welfare rates or unionism are generally bad, although herein lies one of the great contradictions of a system put together in the interests of the corporate class.


That great contradiction, put simply, is between workers who make up the overwhelming preponderance of consumers and a marketplace with insufficient consumer demand for all the products of workers’ labour. Thus, employers are in a constant schizophrenic struggle with themselves as they hope for increased purchasing power from workers of other employers, while at the same time still dampening the wage and salary expectations of their own. They love to offshore work to China and elsewhere, but bemoan the lack of purchasing power of workers at home. Debt allows this main contradiction to be massaged somewhat, but only temporarily. Mounting personal and societal debt may temporarily overcome this most basic contradiction of capitalism, but ultimately adds to crisis. When crisis hits, it is in the field of the labour market where it is felt most keenly with lay-offs, bankruptcies and restructuring.


When the business cycle is not in its crisis phase (never far away), it should be noted that while employers struggle to effect efficiencies to get the maximum production through organizational and technological improvements (out of the labour-time that they have purchased), the workers, on the other hand, see the time they sell their labour power as precious time they could otherwise use in other pursuits, i.e. working for themselves, time with family, volunteer work in the community, rest or leisure, if only they could improve the contracted price for their labour.


In the early part of the last century, pitched battles were fought between workers and capital over the price and conditions to be agreed on in the labour market. Before mass unions and changes to the law, this specialized market was governed by master-servant English common law, where the rights of capital always trumped labour rights. Haymarket (May Day) and the Winnipeg General Strike of 1919 were fundamentally about setting employer limits on the exploitation (use) of a worker’s labour power. Unions, through immense sacrifice of past generations of workers, have won the right to legally exist, although that right is still only grudgingly accepted by the employers and by the rules of society that bosses generally control.


Unionism and collective rights for workers always run counter to the underlying goal of a society based on the primacy of profit-taking. The struggle, therefore, has always been to limit the unfettered right of capital to maximize profit at the expense of labour and society. Workers and their employers, despite illusions fostered by years of accommodation, will always have an adversarial relationship, and that will continue until another societal arrangement is devised based on the primacy of human needs.


Today, our economy (and society) is far more complex than in the early years of union organizing. Education, health care and service (public and private) workers are now essential parts of a smooth commodity-producing society. As opposed to workers at the point of production, these other workers are now more numerous…and essential. Without them and those directly involved in production taken all together, the profit-taking society collapses.


An injury to one is an injury to all or better still An improvement for one is an improvement for all.


As an aside, there is an important aspect to the relationship of public and private sector workers in the labour market place. Since wage, salary and conditions of work levels are set in the overall labour market, higher wages and conditions in either the public or the private sector affect wages and conditions in the other. The Law of Supply and Demand applies equally in the labour market as it does to the prices of other commodities. That is why employer minions alternate attacks on workers in the private sector and then in the public sector. Lower one, you pressure the other.  One of their first ideological point s of attack has been “essential” services”[3], when in fact all workers are “essential” to the running of corporate society. When workers strike, they have no interest in hurting other working people or their community. The workers’ interest lies in pressuring the employer in the interests of maintaining and improving overall wages and conditions.


As a second aside, there is also the fetish of “productivity”. Workers, and in fact all society, are told that the answer to our problems in the labour market place is increased productivity. To compete, we must, as workers, become more productive. Again, it is a matter of “from whose perspective we view productivity and the labour market”. Usually, the benefits of increased productivity accrue to employers and results in plant closures, layoffs and increased corporate share prices. If the labour market was viewed from workers and society’s interests, increased productivity would result in shorter hours of work for the same or greater wages and benefits; more services in the community and increased, secure work for more workers.


Globalization adds even more complexity to the labour market. Current trade deals are less about trade and more about greater flexibility for capital and more restrictions on labour. The trade in millions of commodities is really about the conditions of trade in billions of hours of workers’ labour time.


The latest UN Millennium Report makes interesting reading. “The weak and uneven global economic recovery continued to take its toll on labour markets….”  According to the Report, a large proportion of the world’s workers sell their labour power for less than $1.25 per day. The authors show “progress” in the labour market by comparing $1.25 in 1990 to $1.25 in 2010 without factoring in inflation, although they do acknowledge extreme difficulty in gathering accurate data.


As the worldwide division of labour grows, there are qualitatively new global dimensions.  The ability of employers to blackmail workers with the threat of lockout or moving production elsewhere within the nation state, now includes moving around the globe. Capital has free flow, while workers are stuck in countries with borders. Even in those situations where workers can actually search the planet for work opportunities, “temporary foreign worker programs”, and a racially-charged refugee environment make foreign workers targets for super-exploitation, and sacrificial pawns in the global effort to drive down wages and conditions.


There is a political aspect to the current preoccupation with so-called trade deals as well. Labour is in a struggle to use its “theoretical” majority to effect positive political change around living conditions, the environment and healthy communities. This reflects a view as to how the broader labour market should behave. So-called “trade deals” undermine that vision. Corporate advocates replace reality with secrecy and propaganda about how the “trade deals” will improve the economy and create jobs. Questions such as “improving the economy for whom?” and “what kind of jobs?” and “what is the overall environmental, social and economic impacts of the ‘trade deals’?” are not part of the debate. Local communities, governments, and, in fact, whole nation states are offered up in secret on the altar of profitability to the corporate oligarchs.


Once upon a time, the Canadian trade union movement had a flirtation with joint (as in tripartite arrangements with government and corporations) “labour market” studies. There was a suggestion at the time that labour could seriously influence national training programs, productivity improvements and business decisions. Advocates told us that it would be a panacea for much that ailed us, so in the 1980s, the Canadian Labour Market and Productivity Centre (CLMPC) was born with a labour co-chair. As it turned out, business and labour’s interests diverged so sharply that separate reports to government ministers had to be submitted and finally in 2006, the Harper Government put an end to the successor organization to the CLMPC. There has been much water under the bridge since, but regrettably, illusions about co-management of the labour market still exist.


The term, “labour market” used in the corporate and government world seems benign-enough, floating in and out of our consciousness like the air we breathe. Their studies are like Royal Commissions. We sense they rarely bring relief to those who need relief the most and so we mostly ignore them. The expression “labour market” could just as easily conjure up images of the auction block of the ante-bellum United States South or slave markets of ancient Rome.


 “Labour market”, from a labour perspective, covers the most important transaction in capitalist society. In this market, the worker, unlike the slave of old, is nominally “free”, and approaches the market to sell his or her ability to labour by hand or brain, i.e. workers offering skills to the highest employer bidder in return for wages or salary with which to exchange for the necessities of modern life. Bosses, on the other hand, buy the worker’s power- to-labour to keep their operations operating.


Workers are always fearful of losing their source of income with which to maintain themselves and their families. A death, an injury, illness, a plant closure, downsizing, recession or financial crisis can all spell instant disaster for the worker, the family, and the community in this specialized market place.


Even before the labour contract between worker and boss is consummated, the interests in, and perspectives on, the labour market diverge between the two contracting parties. Employers look for the best possible “deal” in selecting workers to do their bidding. Workers also look to the best possible “deal” for economic survival.


Some workers either plunge off the labour market ramp through no fault of their own (the disabled or unemployed) or never make it to the auction block in the first place (youth). Despair is a social consequence.


Right Wing ideologues celebrate the labour market as a place where employers and workers can freely and equally negotiate their contracts. In their idealized world, there are no unions and minimum wages. But the labour market is neither free nor equal. Whatever contracts are entered into, the relationship between worker and boss has always been tenuous for the worker. In the past, contracts might occasionally extend through the workers’ entire working life, but even with unionization and collective agreements, the relationship of the worker is still subservient and subject to the needs and whims of the employers and their positioning within the overall society and that will remain so until workers are sufficiently organized to gain the upper hand.


As part of the antidote to the global Right Wing assault, a renewal of the “dream” of the earliest pioneers of labour is needed. It is needed in the short term as a powerful material force on the side of working people and their communities, because, it seems, corporate forces lurking behind Right Wing ideology also have collective amnesia about the how and why of unions and the social contract.  It is needed in the long term because our very survival as a species depends on ending a system based on private profit and exponential growth, and creating a society based fundamentally on human needs.



George Hewison is a lifelong union organizer and former officer of his union, the United Fishermen and Allied Workers Union. He embraces

political and social activism in the interests of social justice and fundamental social change.


Hewison believes in the power of working people, who, if given the proper tools, can change the world. One of those tools is a deepening understanding of how our society is put together. George has been the recipient of many important lessons, both positive and negative, from veterans of Labour’s struggles stretching back decades. He has spent most of his adult life sharing those lessons with others.


For a number of years, he has embraced a study of the political economy of capitalism, including its current iteration, and conducts discussion groups with interested working folks who share his desire to explain the complexities of the social, economic and political world around us.


He also continues a tradition of combining activism with the power of song and continues to tour and perform extensively.


He may be reached at georgehewison@gmail.com . 

[1] From the Constitution of the Industrial Workers of the World:  the working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of the working people, and the few, who make up the employing class, have all the good things of life. Between these two classes a struggle must go on until the workers of the world organize as a class, take possession of the earth and the machinery of production, and abolish the wage system.

[2]  Retail, finance, education, health, government, communications, transport, recreation, regulations, and so on.

[3] During the Ford Windsor Strike of 1945 leading to the Rand Formula, the battle around the “essential” power plant became the focal point of the combined government, corporate attack on the Union.