Class Warfare Blog

April 29, 2014

Why is Canada’s Middle Class Doing Better than Ours?

The chattering class has been chewing over the bombshell revelation that regarding the economic strength of the middle class, we are longer No. 1. Canada is. According to The Guardian:

“Median after-tax income for a family of four in both Canada and the United States hit $75,000 in 2010 and as later income surveys show that Canadians have earned larger wage gains than their counterparts south of the border in the years since then, Canadian income now is ahead of that in the US. The gap is even wider further down the wealth ladder.”

Setting aside the irony that the conservative tongue waggers who have lauded the income and wealth inequality in this country are also shocked (Shocked!) that our middle class could no longer be No. 1, most of the comments are on Canada’s sensible use of collective action (Socialism! Socialism!). Canada has subsidized college fees, single payer health care, limitations on executive pay, rational control of the banks and financial and housing markets,etc. The fact that the taxes necessary to support all of those collective actions haven’t crushed ordinary Canadians further perplexes the conservative punditry. The fact that reasonable regulation of these industries resulted in there being no financial collapse in Canada as there was here (the Great Recession) also puzzles them. I mean those regulations aren’t supposed to work.

“Canadians are doing better with unions than we are doing without them.”

What most haven’t mentioned, and I wonder why, is the primary lever in moving middle class wages up: labor unions. In the 1960’s both Canada and the U.S. had about a third of its jobs as union jobs. Union wages are higher than nonunion wages and put upward pressure on the wages of nonunion employees as their bosses want to avoid unionization. The situation in Canada is unchanged, while the proportion of union jobs in this country has shrunk drastically. If you think this reduction in union jobs was an accident, think again. Now, if you are a regular Fox (sic) News viewer and think this is indicative of labor unions being rotten at their core, or some socialist plot, you have to stop smoking what you are smoking until your head clears. Canadians are doing better with unions than we are doing without them. Unless, of course, your definition of “better” has nothing to do with people in the middle and at the bottom of the economic spectrum.

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22 Comments »

  1. Unless, of course, your definition of “better” has nothing to do with people in the middle and at the bottom of the economic spectrum.

    You’re supposed to end the post with a question, not answer the question.

    Comment by Ignostic Atheist — April 29, 2014 @ 8:00 am | Reply

    • LOL, you got me. I am still struggling with subtlety.

      On Tue, Apr 29, 2014 at 8:00 AM, Class Warfare Blog wrote:

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      Comment by Steve Ruis — April 29, 2014 @ 8:06 am | Reply

      • I’m sure the wealthy won’t take notice until it becomes so severe that the average income drops in spite of incredible gains at the top.

        Comment by Ignostic Atheist — April 29, 2014 @ 8:08 am | Reply

        • It has already been proven that the wealthy do better when the middle class does better, but that isn’t really their goal. They are competing with one another for power and wealth points. This is a little like when Jack Nicklaus and Arnold Palmer got so wrapped up in their head-to-head golf competitions that they didn’t notice that another golfer had gotten by them to win the tournament. If you focus solely on your immediate competitors it is easy to lose the bigger picture.

          On Tue, Apr 29, 2014 at 8:08 AM, Class Warfare Blog wrote:

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          Comment by Steve Ruis — April 29, 2014 @ 8:13 am | Reply

          • I’ve got to keep in mind Heinlein’s Razor: Never attribute to malice that which is adequately explained by stupidity. But at the same time, Grey’s Law: Any sufficiently advanced incompetence is indistinguishable from malice.

            Comment by Ignostic Atheist — April 29, 2014 @ 8:29 am | Reply

            • My version of the Razor is to assume incompetence nine times before malice. I hadn’t heard of Grey’s Corollary but it works rather well with my contention. Thanks!

              On Tue, Apr 29, 2014 at 8:29 AM, Class Warfare Blog wrote:

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              Comment by Steve Ruis — April 29, 2014 @ 9:49 am | Reply

  2. I think that in the race to eliminate the middle class, Canada simply lags behind other ‘advanced’ nations. The self-immolation of our unions (where the benefits of the full-time seniority-laden cohort is advanced at the bargaining table at the expense of the part-time, temporary, casual, contract workers) will (and is) make unions universally despised by the younger generation who quite rightly see their mandatory-payment-of-union-dues-without-legitimate-representation as legalized theft and the cherry picking of jobs for the privileged as institutional discrimination. The idea of unions is a good one: fair collective compensation for reasonable work. The practice of unions is to hold the public hostage to its demands for privilege. The sunshine list is a publication listing by name accompanied by compensation all those who earn through public funding in excess of 100000 dollars per year. Aside from the judiciary and medical community, the very long list reveals the cost of unions out of alignment with anything considered ‘reasonable’ compared to the average national wage. The national wage is also affected by incorporating these incomes, as well. Because the money comes from the public – including the wages of union members and non union workers – what is not revealed is the actual disparity between the Haves and the Have Nots. Unions and their members are (generally) in the top wage earners of Haves. Because the vast majority of the Have Nots are the younger generation unable by policy as well as practice to gain equivalent full time long term employment, and are a smaller cohort than the privileged Boomer generation expecting to settle into forty or fifty years of pensions far greater than the annual wages of the working Have Nots, we are setting ourselves up as a nation for very troubled times ahead… for everyone.

    So when you speak of ‘the wealthy’ here in Canada (say in the top 10% of income earners), a very large percentage of that group are ‘average’ union wage earners – firefighters, police, teachers, pilots, and government managers to name the most glaring. In the military, for example, one must reach the rank of Colonel before achieving wage parity with an automotive line worker and a General before reaching parity with a teacher at the top of the wage scale. When these kinds of grossly privileged unionized manufacturing jobs end, these ‘average’ wage earners are shocked that their skills are negligible compared to the younger generation who move through ‘careers’ (collecting experience and expertise as they go) as one negotiated temporary union job ends and next negotiated casual union position becomes available.

    I just find it tedious when unionization is presented to be some kind of solution to economic disparity or supposedly creates a level playing field between business and workers when in practice it is very much a central part of the problem creating and sustaining and promoting exactly what it supposedly addresses: economic disparity. It’s unsustainable as the younger generation is discovering… to their dismay and growing resentment.

    Comment by tildeb — April 29, 2014 @ 9:36 am | Reply

    • I, for one, will not argue that unions are perfect. But if they do not exist, they cannot be reformed into better organizations. My last union got partial health benefits for part-time workers and negotiated better wages for them, too. But there was considerable overlap as “full time” teachers taught “overtime” as if they were “part time” workers.

      All social institutions are subject to mission drift and mediocrity and capture by power mongers. But in the U.S. unions were eliminated as a power source even as many of the observable abuses of the movement were being purged.

      My last union post was one in which the union and management worked as partners solving problems. The United Auto Workers aren’t there yet, as it takes two to tango, as it were. If management doesn’t trust labor and labor doesn’t trust management you get things like rigid seniority rules. Trust can be built overtly but it requires some luck. My good fortune in that last post was that there was a large turnover in management and in the union leadership simultaneously and we used the opportunity to create a new relationship, which has worked well now for quite a few decades.

      On Tue, Apr 29, 2014 at 9:36 AM, Class Warfare Blog wrote:

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      Comment by Steve Ruis — April 29, 2014 @ 10:02 am | Reply

    • I also wanted to mention about the shell game that presents median after-tax incomes. Because much of this income is from public sources (one out of every three jobs in Canada is governmental), this is ‘paid’ to these people by government from borrowing… a cost then shared by everyone. This is why so many in government support the raping and pillaging of the country’s resources to gain immediate tax income to help alleviate this growing burden. Part of the assets used for borrowing is the calculated value of homes… valued by what they can be sold for today. Those who can afford to buy them are only those who can borrow huge sums of money! This requires assets already owned, wage stability, and job security – something available mostly to unionized workers who then pay off this debt, come to own their own home, and assume its value can be transferred into a retirement fund… as long as there is a buyer willing to do the same. The next generation does not have either wage stability or job security – because these have been negotiated away by the unions in exchange for increasing the wages and benefits (including wonderful pensions) of the older privileged class. By policy and practice, we have created a giant shell game where the US housing market crash will be gentle compared to a housing market here in Canada built on borrowing… including ‘borrowing-without-permission’ the means by which the younger generation can have the ability to buy these homes while expecting home values to continue to increase. It’s ludicrous and the stupidity and selfishness that empowers it astounding to behold.

      Comment by tildeb — April 29, 2014 @ 10:04 am | Reply

      • Any such comparison is flawed, of course, in that the systems behind them are quite different. The point here wasn’t any actual accurate comparison but that the flawed metric that showed the U.S. middle class way ahead of anybody else no longer shows that. And the middle class in this country has taken a beating form our monied interests for forty years, so it is no surprise that we are where we are. If one stops running in a race, one gets passed.

        All systems of democratic government are flawed, but I do think that Canada has some very sensible models of government regulation which are worth emulating here. The price of freedom is eternal vigilance and if we don’t care for and tend our government the greedy bastards will always chip away at what we have seeking advantage for themselves.

        On Tue, Apr 29, 2014 at 10:04 AM, Class Warfare Blog wrote:

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        Comment by Steve Ruis — April 29, 2014 @ 10:23 am | Reply

    • What I’m trying to say (badly, of course) is that the mindset that separates wealth creation into camps – specifically owners/management and workers – exacerbates income disparity because the production of wealth is social and symbiotic. We’re all on the same team! Policies that recognize the shared goal is preferable than one that creates privilege for one or the other – regardless which camp that privilege is awarded. Of course, there will always be tension over how wealth creation is favoured and distributed. This is to be expected rather than overcome, which is why the negotiators from all camps need to get on the same page about achieving and implementing a unified policy goal first and then figure out how best to achieve it.

      Comment by tildeb — April 29, 2014 @ 10:21 am | Reply

      • Whoa! “We are all on the same team”?! That, my friend is a dangerous thought Unless truly all parties have the exact same interests I suggest that this is not the case. If it were so, why are so many here in the U.S. trying to disadvantage others to advantage themselves? If “they” thought we were all on the same team, would they behave that way? The gutting of the middle class was not an accident. It required lower tax rates on the rich. Corporate welfare in spades. Crony capitalism, dis-empowerment of unions, and more. All of this was deliberate. These are not things people who are “all in the same boat do”?

        I am a trained Interest-Based Negotiation Facilitator. (I have trained facilitators, too.) And I strongly argue that if we start from a clear and definitive statement of our interests, we can make great progress, even when there are inherent conflicts built in. But if someone doesn’t care about their own integrity or reputation, (for example: will lie to further their own interests) there is nothing that can be done to bring the sides together. If we truly were on the same team, there would be no competition, only collaboration. Our legal system would not be biased in favor of those with money. And a great deal more, of course.

        On Tue, Apr 29, 2014 at 10:21 AM, Class Warfare Blog wrote:

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        Comment by Steve Ruis — April 29, 2014 @ 11:32 am | Reply

        • Well, it may be ‘dangerous’ but it’s true nevertheless in that one cannot produce anything without doing. How that is done is management. Whether someone ‘does it all’, so to speak, or hires someone else (or is hired) to do some part of reaching this single production goal, the link between the doing and the product is firm. The disadvantaging of one part to privilege another is the unavoidable tension created by people who presume their part is more important or is of an inherently higher value than another. This is true in a limited sense (not everyone can design this widget but almost anyone can insert it into that gadget) but is mitigated by being one part of a linked process where each step is along the same continuum and just as necessary as the any other. That’s why there should be a recognized (and arguable) difference in value added (and why I mentioned the free market principle of supply and demand moderated by local living wage legislation). All can be on the same team and all can contribute in various degrees to its success while also accepting that there will be competition and disputes along the way. The competition and disputes does not break this link or dismantle the team unless those involved take it to this extreme. The same principle is in play on every team, every organization, any collection of people sharing any ‘doing’ towards a goal.

          Comment by tildeb — April 29, 2014 @ 1:15 pm | Reply

          • Whether there is competition or collaboration is determined by whether any part id consider part of the “in group” or the “out group.” My last employer reached an agreement with the employees as to what percentage of the business’s income went to the employees and what part went to overhead and what part went to management. If the enterprise prospered, so did all of the parts. If the enterprise suffered, so did all of the parts. Compare that to Wal-Mart or any of the other blood sucking organizations. Their profits went through the roof. Did their employees benefit? Not so much. Their business model is to build in areas that are starving for jobs and then hiring desperate people they can squeeze for more work but no so much more pay. The Walton heirs are rated amongst the most wealthy people in the country (top ten I believe). Do you think they look at their employees as part of the team or as disposable machinery? I can see the drive to make a billion dollars (although I am not driven that way) and that after you meet that goal, sharing the wealth would create a more stable, reliable, and loyal workforce. Look at Costco as a model. They pay three times what Wal-Mart pays for the same work, so they are drawing from the same pool of workers with the same skills. Those workers make similar amounts of money for their employers (I am guessing more for Wal-Mart). So why the huge wage disparity if we are all on the same team?

            Ideally we should all look at any enterprise this way, but if you do and the enterprise is not that way, you are in for a world of hurt because you will not be playing by the real rules and you will suffer. Corporations are aloowed to bring in paid, professional negotiators to negotiate their contracts, but workers can’t because it demeans their work or spoils the relationship? These Wal-Mart (McDonalds, National Resturant Association, etc.) -like situations are all about power and the unwillingness of some to share any of the power available and that is not a “we are all on the same team” characteristic.

            On Tue, Apr 29, 2014 at 1:15 PM, Class Warfare Blog wrote:

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            Comment by Steve Ruis — April 29, 2014 @ 1:34 pm | Reply

            • You’ll get no argument from me on any of these points you raise.

              Comment by tildeb — April 29, 2014 @ 3:36 pm | Reply

    • You seem to have in mind that union workers should not inhabit the upper strata of the wealth hierarchy. Why is that? Not to mention, the top 10% isn’t the issue in the US, it’s the top 1, or 0.1% that is engorged with wealth. The slope of the line on the graph of wealth is very steep and very sudden, after a long shallow stretch.

      I personally view unions as a solution to a problem. If that problem – lousy wages or conditions in the workplace – doesn’t exist, then unions are a burden. While you have unions, you forget what happens without them. However, like any system of power concentration, it is prone to corruption, and must be regulated and policed. The concept of a necessary evil seems to have been lost on the average American, replaced with a simple black and white worldview.

      Comment by Ignostic Atheist — April 29, 2014 @ 10:27 am | Reply

      • You seem to have in mind that union workers should not inhabit the upper strata of the wealth hierarchy. Why is that?

        I think public service paid for by the public should be reflective of average income of the public and not out of alignment with it – neither significantly above nor below. I think the free market (an oxymoron in today’s actual market, I know but I use the term loosely) does a good job establishing equilibrium between how many people can meet a job’s requirements and willingly do it and the job’s market value. And I think this principle can be aided by legislation that empowers local minimum – and maximum – living wage standards. Lots of people like the idea for minimum wage but don;t support the maximum! I think this is hypocritical.

        Unions jobs should be no different. Serving coffee at a Tim Horton’s coffee shop in small town Ontario is worth a minimum wage because lots of people are both capable and willing to do this (the minimum living wage should reflect this reality); serving coffee at a Tim Horton’s in Fort McMurray Alberta is worth significantly more because very few people are both capable and willing to do this job (because there is no maximum on how much people can make owners/management and workers in the local oil fields). Unionizing the serving position regardless of consideration for the local conditions privileges only the minimum wage server and not the goal of having servers willing and able pour coffee for Tim Horton’s to meet its business goal while making a living do work that is valued. In cases like these, unionization has nothing to do with a necessary response to poor management and everything to do with growing a union and holding the public who wants their Tim Horton’s coffee hostage to it. I think there are better solutions. And in addition I think unionization devalues the work an individual actually does and makes it into a robotic output. Do the described work; get paid; it’s not personal, and it does not aid but hinders the teamwork approach.

        Comment by tildeb — April 29, 2014 @ 11:20 am | Reply

        • Where to start? I almost can’t address “And in addition I think unionization devalues the work an individual actually does and makes it into a robotic output.” as its vapidity is transcendent. The union makes an individual’s work robotic? Was it unions that did time motion studies? Did the unions invent the production/assembly line? Did the unions invent the power loom and think that children were the ideal size to tend them? Is it unions opposing minimum wage laws? Did the unions fail to organize restaurant workers, garment workers, coal miners, etc. so to concentrate on the really lucrative white collar crowd?

          Where do these ideas come from?

          As a new college teacher I was “anti-union” by default and then I had an issue that the teachers union (comprised solely of other teachers) helped me with. This cognitive dissonance led me to research the history of the union movement and, yes, there were abuses, but they paled in comparison to the actions of government and corporations in opposition and also paled in comparison to the betterment of union workers lives.

          Union workers make more than non-union workers, but any differences are peanuts compared to the rampant harvesting of wealth done by the executive class and the governmental class. The U.S. Congresses medain wealth is now over a million dollars. If you aren’t a millionaire when you run, you soon will be. Only recently did Congress void the law allowing Congressmen to participate in insider stock trades while it was illegal for anyone else to do so. So, unions are denigrating ordinary work but the fat politicians and corporate executives are not?

          In all of my years as a union official I never heard that complaint from anyone I served or anyone with whom I worked as part of a story having occurred elsewhere.

          On Tue, Apr 29, 2014 at 11:20 AM, Class Warfare Blog wrote:

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          Comment by Steve Ruis — April 29, 2014 @ 11:43 am | Reply

          • I’m glad for you. Unions have always been a major obstacle not just for me (one in particular working hand-in-glove with government and universities and my professional college to which I have to pay mandatory affiliation fees to discriminate against my professional qualifications in order to privilege those with far less qualifications) but my spouse (and one other person) battled many years on their own and without anything but threats and intimidation and bullying tactics from the union forced the BC government also working hand-in-glove with government and universities and the professional college that also demanded mandatory affiliation to repay more than 200 million dollars the union negotiated away with neither consent nor consultation. Job offers flowed from all of them and all were equally rejected. Discrimination is personal.

            You may believe unions are a force for good but I’m just saying that framing economic disparity today as union vs management is a disservice to ever solving the source of the problem: real tensions that come from the workplace. I think you compound the problem by assuming that unions are the solution, one that requires more privileging. I think you’re wrong. I think unions are so busy cutting their throats that they have yet to realize their condition is terminal.

            Comment by tildeb — April 29, 2014 @ 1:31 pm | Reply

            • Ah, I didn’t make that frame and I am truly sorry about your experience (having paid my dues as a representative for members wronged by the system). My point is that Canada did not overtly undermine and dis-empower it’s unions. The U.S. did. Middle class wages in the U.s. are stagnant but in Canada, they continued to increase. I only pointed out a correlation and while I do attribute some degree of cause to that correlation, I have no idea how much there is. I tend to think the “anti-union” mindset so prevalent in U.S. business management circles is a shared meme that unfortunately translates as “anti-employee”. Ironically this all occurred as management gurus were espousing more cooperative workplaces, empowerment of workers, and worker-led enterprises soared. The reason the US ran counter to this trend is that its actions were part of a well-orchestrated, well-funded class war against workers, starting with the foundation of conservative think tanks, then the Powell memo, than on and on.

              Actually I criticize the unions for doing a lousy job of battling for collective bargaining rights of workers. So many unions just rolled over. But it is now so bad that a Republican administration in Wisconsin, one of the homes of the union movement and a “pro-union” state, could eliminate collective bargaining for public employees and make it stick. Too often unions were in the pocket of Democrats and did not use their leverage at all well and hence just got taken for granted. where else did they have to go? Well, they could have gone out and recruited a bunch of anti-establishment candidates to run against the incumbents and gotten them elected (like the tea party is doing)… hopefully with higher quality candidates). A union, such as yours seemed to be, that rolls over and becomes an arm of oppression is beyond despicable. Unions should enforce their own contracts, but those contracts need to be democratically created and not just shells for leadership to read any way they want.

              On Tue, Apr 29, 2014 at 1:31 PM, Class Warfare Blog wrote:

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              Comment by Steve Ruis — April 29, 2014 @ 1:49 pm | Reply

              • I’ve long been surprised at how many disenfranchized Americans continue to support politicians and their parties and businesses and their products that support this disenfranchizement. No clearer case is that of public healthcare where the poorest of the poor actively support the ‘right’ for the richest of the rich to pay the least. It boggles the mind. The principles of socialism are exemplified by such communistic institutions as the police, the firefighters, the military! But the definition associated with socialism held by so many Americans (and half of my family are Americans and not Canadian) is of some great evil. It’s truly bizarre. How adding a profit margin to public services through privatization is supposed to make it both cheaper and better value is delusional thinking… the kind of understanding that passes on a tremendous dysfunction and disservice to the next generation struggling to become obscenely rich to benefit the most from a system that serves only this end of the social spectrum. I still think the US should join Canada and let us put your house in order.

                Comment by tildeb — April 29, 2014 @ 3:45 pm | Reply

                • I agree completely. Is great puzzlement!

                  On Tue, Apr 29, 2014 at 3:45 PM, Class Warfare Blog wrote:

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                  Comment by Steve Ruis — April 29, 2014 @ 8:42 pm | Reply


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