The Need for a New Direction for the Economy

Media Talk Covers Up Need for Political Action by Worker Politicians

Talk about a looming economic crisis as a result of massive deficit spending, unemployment and underemployment and how the pandemic is being dealt with goes round and round. Most of it is descriptive or a matter of opinions about how more should be done in this or that direction but the reference points are generally directed at getting working people to accept the current disastrous direction of the economy. It is directed at depriving working people of an outlook of their own which permits them to organize an alternative self-sufficient economy which puts the human factor/social consciousness at the centre of its endeavours. Demobilizing the working class and ensuring working people are blocked from taking actions with analysis in their own interest is a full-time preoccupation of the cartel parties and spokespersons of the narrow private interests which dominate both the economy and the political system. It is the working class together with all concerned, that are interested in solving problems in a manner that provides a new direction for the economy and politics that serves the people and not the global oligarchs and their outmoded aim for maximum private profit. Workers need to put forward politicians from their own ranks who actually speak in their own name, not in the name of a system of cartel party government whose main aim is to keep the people away from the decision-making power. 

The  December Statistics Canada report on the large number of unemployed and underemployed workers and drop in workforce participation rate is an example of talk that goes round and round. (The January report has now been issued.)

Following its release economist Armine Yalnizyan told The Hill Times that she expects job numbers, as well as the workforce participation rate, to continue to decline. Yalnizyan said she has been keeping a close eye on participation rates in the labour force. "In the United States, we've had a cautionary tale that four times as many women as men have been dropping out of the labour market entirely. There can be all sorts of reasons for that, but the biggest reason has been other unpaid work demands, primarily caring for children who need to be homeschooled because of remote learning due to unsafe conditions or lack of child care. We are seeing that in Canada," Yalnizyan said. She added that  the drop in workforce participation has implications for the economy. "If fewer people are earning money, they have less to spend, and if they have less to spend, the recovery is being dragged. It doesn't matter how early you try and open things up to bring things back to normal -- if women are not getting back in, and are dropping out, you have a bigger problem on your hands," she said.

However, the issue goes beyond "having less to spend." The drop in the workforce participation rate plus the large number of unemployed and underemployed mean a loss of potential social value for the country. The workers not working in the socialized economy are not producing social wealth. As Workers' Forum pointed out in its February 2 issue:

"The refusal of the ruling elite to organize universal free childcare and early learning for all children is a block to the economy meeting its potential.

"The refusal to challenge monopoly right and its expropriation of the added-value workers produce drains needed social value from the economy and country that could be used for increased investments in social programs and public services.

"The refusal to challenge monopoly right to realize (pay for) the social value they consume from educated and healthy workers as social reproduced-value but instead allow the oligarchy to expropriate it as private profit deprives public education, health care and other social programs of the funds they require to meet and guarantee the needs and rights of Canadians."

Leah Nord, the senior director of workforce strategies at the Canadian Chamber of Commerce said, in a press release concerning the December report, "We're not through the storm. We're not going to be able to weather this storm -- these second waves [of COVID-19] are going to affect labour markets, among other things. Within that darkness lies a concern over December's dropping labour force participation rates, mostly comprised of male youth and working women, likely frustrated by the job search and staying home to take care of suddenly homebound children, respectively. The enduring impacts of the increasingly long-term unemployed and workforce drop-outs will cast a long shadow upon the recovery, as re-entry into what will assuredly be a very different labour market presents significant obstacles."

"Nobody has a crystal ball -- we have a lot of great data out there -- but we are really going to have to cull this labour market by sectors, but also by communities," Nord added ominously.

Earlier this year, Bank of Montreal chief economist Doug Porter told The Hill Times that the current decline in workforce participation and employment "wasn't any surprise for us," and that his concerns "predated Statistics Canada's December report." He said, "We saw a lot of smaller retailers in Toronto have had to close their doors, so naturally we're going to have job losses."

"The worry is, since then we've had wider shutdowns in Ontario and more shutdowns in other provinces, and I think we'd be extremely lucky if we don't see an even bigger decline a month from now," Porter said. "I think we all have to realize that there is a very heavy price to be paid in terms of people's livelihoods when we start calling for big new restrictions on businesses... There is a trade-off here -- we [the banks] get accused of putting profits ahead of people, and I don't see it that way. I think it's livelihoods and not profits, but I see it day-by-day, calls for even more intense restrictions, and I wonder if it's really achieving what people think it's achieving. It's definitely coming at an economic cost," Porter said.

NDP Member of Parliament and finance critic Peter Julian was quoted in The Hill Times as saying the StatCan December labour force survey reveals "devastating numbers, but I'm not surprised." Julian said, "Going into the pandemic, Canadian families already were at the highest level of debt in the industrialized world, so we've seen a real deterioration in our standard of living, with Canadians struggling to make ends meet. The devastating impacts of the pandemic have magnified that -- we're seeing people that are unable to put food on the table, people who are unable to keep a roof over their head... So when you see the employment numbers and then see the devastating financial and economic impacts that existed prior to COVID, you can see that there is an economic crisis that is brewing and that is very profound... Billionaires have increased their wealth by over $50 billion [during the twin crises]. We're seeing record levels of profits in the banking industry despite [the sector] getting [billions] in supports, [and the banks] have done very little to address the needs of small businesses or people, [so] what we have is a perfect storm where regular families are being absolutely hammered financially, and the wealthiest are getting away with massive profiteering."

This article was published in

Volume 51 Number 2 - February 7, 2021

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Media Talk Covers Up Need for Political Action by Worker Politicians


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