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

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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.

Another Moral Economy Column
By Christopher Lind
March 31, 2011

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• 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.

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• This column is published in The Western Producer, Canada's largest agricultural newspaper

Fairness and Transparency in Short Supply

Another Moral Economy Column
By Christopher Lind
November 2010

I will never forget a story told to me by one of my students, a middle aged woman who had been married to a farmer for many years. They lived in rural Alberta. She needed to buy a new car so she went to the nearest town and discussed her needs with the salesman at the car dealership. When she came home she discussed her options and the prices with her husband. Her husband’s reaction was “Oh, that can’t be right. I’ll go talk to Fred myself”. The next day the husband talked to the same salesman at the same dealership and obtained a price $6,000 less than his wife had obtained the day before. His wife was furious. She had been deceived. The process of buying a car was neither fair nor transparent and all because of her gender.

Of course gender is not the only reason why a business transaction might be unfair. However, one has to wonder why any transaction would not be transparent except to hide some aspect of unfairness?

In Great Britain right now people are engaging in civil disobedience because education and welfare payments are being cut back. One of the parties in the governing coalition campaigned on the promise this would never happen. They were not transparent in their dealings and people complain the result is unfair.

In British Columbia, a protest movement has forced the legislature to hold a vote on the newly implemented Harmonized Sales Tax. Why do people hate the tax so much? Part of the anger is fuelled by the reality that the governing party campaigned on a promise not to raise taxes. Then, once elected, they brought in the HST which increased sales taxes on some items from 5% to 12%. Of course this happened in the middle of a major recession when most businesses had concluded they couldn’t increase prices by an equivalent amount. It wasn’t transparent and people conclude it's not fair.

Relationships on university campuses across Canada are becoming increasingly strained. The long term pressure is a lack of funding to match increasing enrollments. However, faced with that pressure many universities have engaged in behaviours that are neither fair nor transparent. For example, the underfunding of students has reached such a critical level that over 90% of Canadian universities now have food banks on campus. The University of Alberta has had one since 1991, now even the University of Lethbridge has one.

Hundreds of thousands of students rely on student loans to pay their tuition. The governments transmit these funds to the students through the universities who charge the students an administrative fee in turn. I know of one regional Canadian university who budgets almost a quarter of a million dollars annually to be received from these fees. Why should the poorest students be subsidizing the universities with borrowed money? These are the ones relying on food banks to eat. This practice is neither transparent nor fair.

If we want to build a moral economy we can start with some very simple requirements in our everyday transactions. Whether as a seller or a buyer, a worker or a manager, let’s start with a commitment to fairness and transparency.

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• Visit my latest book: Rumours of a Moral Economy
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• This column is published in The Western Producer, Canada's largest agricultural newspaper

Knowledge For All

Another Moral Economy Column
By Christopher Lind
October 2010

Yeah, yeah, yeah, the world is going to hell in a handbasket. So what can we do about it? This is one of the most challenging questions I hear. On the one hand the questioner agrees with me that things are deeply wrong. On the other hand they see the engine of destruction frozen in place and no mechanic in sight. What is to be done?

My own approach is two fold. On the one hand I focus on the moral values or ethical principles that have stood the test of time and have shown themselves to be reliable guides in stormy weather.

On the other hand I focus on the new possibilities that globalizing technology and new ways of thinking are making available. Take Wikipedia for instance. Wikipedia was only started in 2001 and as of January 2010 it was attracting 78 million visitors monthly to a site created by 91,000 voluntary contributors.

So Wikipedia is not only an online encyclopedia, it is also representative of a new way of solving problems, of forming community and of sharing knowledge. It is a mechanism for harnessing the power of the crowd.

One of the ways an unregulated market economy works is it allows for capital to find or develop monopoly situations which can be exploited until something breaks. One of those little situations involves the publishing of highly specialized but very important scientific journals. An example might be Nature, the most cited scientific journal. This year the University of California threatened to boycott the Journal because proposed subscription charges were going to increase 400%. In spite of the argument by Nature Publishing Group that they were simply trying to eliminate a historical discount benefiting UC and few others, the news resonated deeply with university librarians who had seen journal subscriptions increase in price faster than any other segment of their budget, often after journals were taken over by larger for-profit corporations.

A Canadian librarian from UPEI, Mark Leggott, is leading the rebellion. In his case the last straw was a science database subscription, Web of Science, which was increasing its price by 120%. His response, and the response of UPEI, was to cancel the subscription and then to organize an alternative based on the power of the crowd. The response is called “Knowledge for All” and it is being supported by the Council of Atlantic University Libraries. Knowledge for All is not a small project. The dream is to index all the world’s scholarly journals, which means something between 4 and 5 million separate articles annually, using an approach that could be called community driven, crowd sourcing or open source, or following a wikipedia model. It will save a lot of money too.

Librarians in PEI and elsewhere are saying the system is broken. However, instead of throwing up their hands, they are teaching themselves how to become their own mechanic. Relying on the shared frustration and shared ingenuity of the group, just like the farmers of yesteryear, they are proposing to build a brand new kind of co-op. It will be light on centralized administration and heavy on group participation. It directs the new globalizing technology to the service of the community and aims at Knowledge for All. How cool is that?

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Unpaid work ignored once more

Another Moral Economy Column by
Christopher Lind
12 August 2010

Meet Maureen. Maureen is a single parent of a sick child and this is how she describes her day. "I administer 10 hours of peritoneal dialysis. I prepare charts which are reviewed by doctors. I dispense medications around the clock. I change surgical dressings. I oversee daily vomiting sessions.... I order medical supplies.... I lift a 46 pound child countless times along with her wheelchair. I transport and lift 60 boxes per month of dialysis fluid. I oversee physiotherapy exercises.... I have the responsibilities of a doctor, a nurse and an orderly. All of these responsibilities are over and above the task of responsible motherhood."

I think Maureen is a hero. So are the hundreds of thousands of other parents who make responsible parenting a priority in their lives. In 1985 the Canadian Government endorsed a UN call to measure and value women’s household work. However, prior to 1996, the Canadian Census asked women like Maureen to report they had never worked in their lifetime. It was absurd but true.

The wall of indifference and incomprehension began to crack in the late 1980s when the National Farmers Union began a survey to quantify the work of farm women. Under the leadership of NFU Women’s President, Nettie Wiebe, they were able to persuade Statistics Canada to change the census. Previously, the census only allowed for one person to be listed as the farm operator and it was most often a man’s name whose was listed. After 1991 there were several slots available on the form and so women’s names could be listed as well. Like magic, the number of women farmers in the country increased dramatically.

Following the effort of the NFU, in 1991 a Saskatchewan housewife refused to fill out the compulsory long form census because it did not recognize her unpaid domestic work. Her name was Carol Lees. Canadian law says you can be arrested for refusing to fill out this census. Carol began picketing a federal government building in Saskatoon as a way of goading the government into following through on its threat.

This attracted the support of other women’s groups. Members of the National Council of Women joined her protest and the BC Voice of Women called on women to boycott the next census if questions on unpaid work were excluded. In 1993 Carol formed the Canadian Alliance of Home Managers to reduce the invisibility of unpaid work. In 1995, the Canadian Government gained great mileage at the World Conference on Women held in Beijing, China, by announcing they would include a question on unpaid household labour in the 1996 census.

As a result we learned that 91% of Manitobans over the age of 15, and living in private households, contributed unpaid work each week. We also learned that the total amount of unpaid work done in Canada is equivalent to 12.8 million full-time, full-year jobs. Two thirds of these jobs would be held by women.

The Canadian Government has now decided to scrap the compulsory long form census. The head of Statistics Canada has resigned amid the furor because the government was claiming the agency supported this change when clearly it did not. Lost in the debate is the fact the Canadian Government has also scrapped the question on unpaid household labour.

Good government policy should be based on sound data. By removing this question the government is preventing all government agencies including provincial and municipal agencies and not for profit groups from having access to sound data. Is there an agenda here? Of course there is. This move rolls back advances in gender equality by almost 25 years. This is the same government that has cut funding for women’s advocacy groups.

Maureen deserves better than that.

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Canada Post in Parliamentary Rummage Sale

Another Moral Economy Column
By Christopher Lind
10 June 2010

Rural Canadians are resilient, multi-talented people. However, they also depend on a few key institutions to support their diverse way of life. One of those institutions is the Post Office. Fortunately Canada Post recognizes their unique role. This is how the Crown Corporation describes its self-understanding on its website:

“For longer than Canada has been a country, Canada Post has been part of the bedrock of rural Canada. Today we remain the only company that serves all Canadians, in their communities, and this is not going to change.”

The last year was a difficult one for Canada Post. Its volume of mail dropped 8% in 2009 and this decline wiped out 5 years of steady growth. Even though net income increased, the Crown Corporation was unable to issue a dividend to the Government of Canada because of the challenging financial conditions.

Canada Post has a mandate to provide postal service to all Canadians. The reason it can carry out this mandate without a massive subsidy is because it can use the profit from more profitable routes to subsidize the less profitable ones. As you might imagine, the Canadian Government faces constant pressure to allow competition on those more profitable routes. It is only the pressure and vigilance from 843,000 rural Canadian households, the ones who most stand to lose from the decline of Canada Post, that keeps the cross subsidy intact.

This makes the initiative of the current federal government all the more puzzling. It has introduced an omnibus bill, C 9, to remove an exclusive privilege from Canada Post to deliver mail to addresses outside Canada. Now Bill C 9 does other things too. In fact, this single Parliamentary Bill amends over 80 separate pieces of legislation. It changes the rules for Credit Unions, it changes the rules for pensions, it even changes the agreement on social security between Canada and Poland. Possible the shortest amendment in the whole Act is the one paragraph that removes international mail delivery from the hands of Canada Post.

Why would the Government want to do this? Maybe because they have tried it twice before and failed – once before the election in 2008 and again when Parliament was prorogued in 2009. This time they have buried it so deep in other unrelated amendments it looks like they are hiding it. Omnibus bills are best used for fine tuning and technical adjustments of legislation. They are poor choices for substantive changes in policy.

What is at stake here is the question of solidarity of urban Canadians with rural Canadians. It is also a matter of fairness and whether rural Canadians can get access to the same level of service from the government as other citizens. It is also a matter of economic development. If Canada Post has to cut back on rural accessibility in order to cut costs, it will make it more difficult for new businesses to start up in, or relocate to rural areas.

This amendment, buried in bin 15 of the rummage sale known as Bill C9, may seem small but its implications are huge. If you care about your rural postal service, call your MP and ask that this fundamental policy change be given its own bill and its own dedicated debate.


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This column is published in the Western Producer, Canada's largest farm newspaper. For other moral economy blogs see christopherlind.blogspot.com