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Monday, October 22 2018 @ 05:35 MDT

On temporary foreign workers and the market.

Canadian PoliticsThe Harper Conservatives have recently announced minor changes to the Temporary Foreign Worker (TFW) program in response to some very public abuses of the program by banks and other large corporations. It would seem the Tories have discovered that Canadians displaced by TFWs still get to vote in elections, whereas the 330,000+ TFWs in the country don't. Of course business screamed at the prospect of a reduction in the stream of developing world cheap labour, which is comical given the situation.

I say comical because of the free market. Business leaders and the Conservatives and the supporters of both groups have been demanding that everything be run by the free market. From schools to health care, the business and Conservatives have said that only the market can provide these services efficiently (that the market would price the services out of what most people could afford is irrelevant). So basically business and their Conservative party friends have stated that no one should be sheilded from the all powerful invisible hand of the market.

Except business of course. Which is the purpose of the TFW program, to protect business from the market. If there is a shortage of labour, then wages go up due to market forces. Why would someone work at Tim Hortons for $10 an hour when they can go work for Suncor for $20 an hour. This is how the market is supposed to work. A resource, in this case labour, is rationed by the ability of the people who want it to pay. Remember this as it is how the Conservatives and business leaders want education and health care rationed. It is however, not how they want labour rationed. Why? It negatively impacts their bottom line.

So the argument from business/conservatives is as follows: everything should be subject to the market, such as education and healthcare so that only those who can afford it get them, saving the government money and lowering taxes. Except if it costs business money in the case of a shortage of labour. Then we need to do massive social engineering in order to lower wages, since the market isn't doing that.

Which is why it's interesting that business is whining about the changes. The only substantive change is the elimination from the program the ability to pay TFW up to 15% less than the market rate for labour. So basically the champions of the free market, business, are complaining that they have to be subject to market forces. Well, what's good for the goose is good for the gander. If business wants the rest of us to be completely at the mercy of the market, so should they, period. They can't go whining to the government that the market is being unfair to them and costing them money. If they expect the rest of us to put up and shut up, so should they when the market gives them the short end of the stick.

Which brings up another interesting issue. Back about a year ago NDP leader Tom Mulclair described the Canadian economy as being infected with "Dutch Disease". Basically the energy sector of the economy was forcing the other sectors out of business. He was attacked by both the Conservatives and the oil industry for suggesting such a thing. The reality is that he was correct. The service sector in Alberta is being hammered by the high wage environment the oil industry has created, making it harder for fast food outlets and retailers to find people willing to take a job for near minimum wage and stay for more than a few weeks before they get a high paying job in the oil patch. Dutch Disease. The oil industry has created a high wage economy, meaning that people aren't willing to work for low service sector wages (and don't have to since the high wage jobs are there), the market in action. Not to mention that the cost of living in Alberta is so high that it's next to impossible to live on the wages offered in the service sector. This creates a problem for these businesses in that the cheap labour that is available isn't going to stick around and put up with crap wages and often crap working conditions when something better is easy to find and get. So they're forced with paying market wages for labour in order to keep staff. Hence when the government offered to bypass the free market for them they were lining up in droves to hire cheap labour from the developing world.

So in short, the TFW program has become corporate welfare for businesses that don't want to be subject to the free market in the way they want the rest of us to be subject to it. The whining at the tinkering of the TFW program the Tories has done is evidence of that. I mean really, heaven forbid that a business be subject to market forces, that's for other people.

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