Northern Currents economics

While the coronavirus pandemic started spreading across the globe, many governments were caught off guard and had to act quickly. Those countries that elected to put their top scientists in charge and listen to their expertise were more successful in flattening the curve than those that didn’t.

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We can easily compare Canada to the USA, whose government failed to listen to their top scientists and come up with a cohesive national strategy. The Trump administration and Republican governors routinely silenced and attacked scientific opinion. Canada, on the other hand, put Theresa Tam, a pediatric infectious disease specialist, front and center of the pandemic response. Most other provinces followed suit, following the guidance of their own top scientists and doctors.

It is true that our Canadian government made mistakes as well, albeit not to the same degree. For those of us further left than the Liberal party of Canada, there are valid criticisms of Justin Trudeau’s handling of the pandemic response. In the first round of CERB, for example, there were many people left out such as students, seniors, and those in the gig economy. Luckily Trudeau was pushed to make the program more inclusive by both everyday Canadians and the NDP.

Fair criticism aside, one question to consider: How would Canada have fared under a Conservative government?

Reopen the economy… in May?

As early as May, then leader of the Conservative Party, Andrew Scheer, was already echoing “re-open the economy” rhetoric. This Trump-like rhetoric expressed a narrative common to far-right, pro-big business pundits and politicians. At this time Canada had flattened the curve, but had a long way to go in reducing daily case numbers. Would Scheer have reopened the economy too early?

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Pierre Poilievre, opposition critic for finance, had a similar approach. Poilievre excessively whined about the cost of Trudeau’s response plan, and advocated for a ‘free market’ solution to create jobs and economic growth. Never mind that had programs like CERB and the Wage Subsidy never been introduced, much of that public debt would be our own personal debt. That is, many of us would have to take out loans or pay with credit in order to make it through the pandemic. Never mind that business supports and rent relief actually saved many businesses from going under in the first place, making recovery that much easier. Never mind that grocery store executives most likely colluded to cut workers pandemic pay raises. Classic free-market move there.

Conservative deficit hawks like to make a fuss about Canada’s public debt reaching 1 trillion dollars. This is most likely going to happen by the end of this fiscal year. It’s not as scary as it sounds though, as debt financing is simply how modern governments work. When determining the health of an economy, the debt to GDP ratio is a better indicator than absolute debt as a dollar amount. It is projected that Canada will reach a 50% debt to GDP ratio after having a consistent 30-35% for the last decade. Keep in mind too that it was almost as high as 70% in 1994. The World Bank estimates that countries with 77% or higher for long periods of time will experience slow economic growth due to the deficit. This rise in debt to GDP is only temporary and as we recover from the pandemic, we will go back to normal.

Ford, Kenny, and Moe

Even during a pandemic the conservative, pro big business agenda never rests. Doug Ford sought to strip healthcare workers of their collective bargaining and other rights with Bill 195. Dave Murphy, president of CUPE Local 7800 said, “This is the way the government of Ontario pays back the heroes and heroines of this province by then stripping them of their vacation rights, their leave of absence rights, their seniority rights, their health and safety rights.”

On the topic of free markets, Doug Ford defended price gouging of Covid-19 tests. Ontario has had lax rules on gathering sizes and little requirements on who may be tested. Compared to BC, Ontario had gathering sizes of up to 100 while BC is limited to 50. BC requires that one must either have symptoms or have an exposure to a confirmed case in order to get tested while Ontario rules are relaxed.

These two factors have resulted in unnecessarily long line-ups at testing facilities. One company, HCP Diagnostics, offered the chance to “skip the line” and take a test for $400. Doug Ford dismissed the concerns of price gouging saying, “It’s a free market society.” Contrast that to Justin Trudeau’s recent affirmation that vaccines will be free to all Canadians.

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Since the start of being premier of Alberta, Jason Kenny has antagonized the most valuable community possible during a pandemic: doctors, nurses, and other healthcare workers. With 750 layoffs of nurses on the line, Kenny and his government have refused to meet with United Nurses of Alberta to renew contract negotiations. United Nurses of Alberta is the union that represents 30,000 nurses in the province.

Things have gotten so bad under Kenny’s leadership that the Alberta Federation of Labor, a group of unions, has asked Albertans to boycott businesses that support the United Conservative Party. Healthcare workers are leaving Alberta to such an extent that other provinces are looking to poach those leaving the province.

“My message today to Saskatchewan is that we will invest in healthcare,” said Saskatchewan NDP Leader Ryan Meili. “My message today to Alberta doctors and nurses: come on over, Saskatchewan will welcome you with open arms under an NDP government.

It gets worse with Kenny too. Many Conservatives in Canada long for the day that we give up our prized healthcare system in favor of a “free market” based system, American style. The UCP is chipping away at socialized healthcare with Bill 30, which allows for public funds to be funneled to for-profit healthcare. The recently formed party has a history of cutting public sector jobs and voted to reject the commitment of upholding principals in the Canada Health Act.

Over in Saskatchewan, a candidate for Scott Moe’s Saskatchewan Party was caught promoting conspiracy theories about Covid-19. Daryl Cooper deleted Facebook posts on his official campaign page that included claims that 5G caused Covid-19 and other Qanon conspiracy theories.

Same old Conservatives

At the federal level, the Conservatives, having just gone through a leadership election, are going through an identity crisis. It seems that through electing Erin O’Toole, the social conservative base is still a powerful voice within the party. This is worrisome in and of itself, as social conservatives aren’t known for their embrace of science.

If we were to wonder about an alternate future in which the Conservative Party of Canada was in power during the current pandemic, we wouldn’t need to use our imaginations to understand how they would govern. The track record of Conservatives currently in power speaks for itself. This is a party hostile to healthcare workers, but not so hostile to big business. Their willingness to stand against healthcare workers during a global pandemic is truly horrifying.

Since the industrialization of the world, workers organized in unions have fought for many key rights Canadians enjoy today. In the early days of Capitalism, it was not uncommon for a worker to spend 80 hours per week at their job in strenuous working conditions. Thanks to organized labour, this has trended downward, and the 40-hour workweek is the norm. It’s time to take the next step.

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Over half of Canadians seem to agree, according to a recent Angus Reid poll. The number jumps from 53% to 64% support among those in the lowest levels of household income. The reasons for this seem obvious, as a 4 day, 8 hours per day work week with no loss of pay would provide a much-needed break to many workers.

The benefits for working people are clear and simple: more free time, more work focus, less work-related stress and injury, less carbon footprint from commuting, higher-paying jobs, etc. The realization of this goal is not quite as simple; there will most definitely be pushback from both small and big businesses as this policy may cut into profit margins. But just because it might be a complicated process doesn’t mean it’s not a goal worth striving for.

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If Canada, as a society, were to transition from a 5 day, 40 hour work week, to a 4 day, 32-hour workweek while adjusting wages to result in no loss of pay, that would result in every hourly worker receiving a 25% raise. For example, a worker making $15 per hour with 40 hours per week would then need to make $18.75 per hour and work 32 hours to earn the same gross income.

While this may seem like a hit to a business bottom line, it’s not quite as bad as one might think. Consider how BC implemented a 15$ minimum wage. Between September 2017 and June 2021, the minimum wage was increased annually (and still is increasing) from $11.35 to $15.20 per hour. This gradual 34% increase in the minimum wage was a response to businesses’ insistence on stability. To mandate an almost $4 increase in the minimum wage directly could be too big of a hit for some businesses to handle. By spreading out the increases in small, manageable chunks, a business has a sense of stable expectations for future costs.

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Why couldn’t we do the same thing with the 4 day work week? Why not chip off two hours every Friday over four years? Or one hour the next eight years?

This could be a good way to at least get the ball rolling. Such a gradual shift could be sustainable for most businesses.

Photo by Chris LeBoutillier on Pexels.com

Admittedly for some industries, such as some skilled trades that are experiencing worker shortages, this may be a bit more difficult. But a 4 day work week would provide a better incentive for workers to stay in those fields as less than half of skilled trades workers make it through their training programs.

There are some smaller, secondary effects of the 32-hour workweek, that also help alleviate small business concerns. These include marginal decreases in benefits paid by employers, workers taking fewer sick/stress days, and decreased utility and operational costs.

Another key secondary effect would be a simple fact that working people would have more time to spend money. Giving people more time for local travel and leisure is an excellent way to stimulate the economy.

Office jobs, usually paid as salary, would be able to implement the 4 day work week much more easily. One financial service firm in New Zealand did just that with remarkable results:

Employees, in general, reported much better work-life balance, job satisfaction and health as well as less job stress. Less time spent in meetings, too. For Perpetual Guardian, revenue and profitability have risen 6% and 12.5% respectively; job performance, team creativity and staff retention increased, too. The offices never closed down; they just had fewer people working there.

And, to add to that, it was said that “generally speaking, workflex variations are one of the least expensive ways to make employees happier.”

Isn’t this what working people in the current moment deserve? Decades of wage stagnation and the rising cost of living while productivity increases are due to right-wing economic policies. It’s about time workers got some relief.

Source: Centre for the study of Living Standards

It is interesting to note that workers in Germany, Denmark, Norway and others already work significantly less than Canadians do. In fact, the average yearly hours worked is almost 20% less for those countries compared to Canada, while being on average more productive. Why not follow in their footsteps?