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Podcast: Rising Inflation Creates Tension in Collective Bargaining
With year-over-year inflation topping 8%, far in advance of nominal wage gains, workers in all parts of Canada’s economy are struggling to protect their real living standards. Real wages have declined by more than 3% in the last 12 months alone, with further erosion pegged in the months ahead. Collective bargaining tables in both the private and public sectors have been roiled by the acceleration in inflation. Workers are determined to try to keep up with inflation. And that determination is only heightened by the fact that corporate profits have increased so strongly alongside the rise in consumer prices. Some major strikes have already occurred (such as in Ontario’s construction…
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Snatching Defeat From the Jaws of Victory
The Bank of Canada has increased interest rates three times since March, with another (potentially large) increase predicted on July 13. Other central banks around the world are also quickly increasing interest rates to reduce domestic spending, slow down growth and job-creation, and try to reduce inflation back to their preferred targets (2% in Canada’s case). In this commentary (originally published in the Toronto Star), Centre for Future Work Director Jim Stanford considers the risks that this reflexive response to inflation will derail the strong economic recovery that has been experienced since the pandemic. A Pointless Sacrifice to a Mystical Two Per Cent God By Jim Stanford Canada’s economy rebounded…
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Taking Away the Punchbowl
Central banks in Canada and around the world have begun an aggressive cycle of monetary tightening: lifting interest rates quickly to undermine domestic employment and spending, in hopes of brining inflation back down toward their preferred targets (2% in Canada). Already, this shift in policy is having major impacts on forward-looking asset markets: stock markets, debt trading (especially for emerging economies), cryptocurrencies, and housing prices are all falling sharply. Many forecasters expect a worldwide recession to result from these measures. History suggests they are likely right: never before in Canada, and rarely anywhere else, have central banks succeeded in disinflating their economies to the extent now planned without experiencing a…
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Ontario’s ‘Right-to-Disconnect’ is no Such Thing
The Ford government in Ontario, portraying itself as being on “the side of workers,” recently passed legislation setting out certain requirements for some businesses in the province regarding expectations of workers’ availability outside of normal working hours. This legislation has been widely, but very inaccurately, reported as a “right to disconnect.” Some coverage has even fawned that Ontario is now the first jurisdiction in North America to protect this right. This claim is transparently false – and individuals who (wrongly) believe that such a right exists might take actions (such as refusing instructions from their employer) that could jeopardize their employment. The Ontario law simply requires that firms with over…
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New Video: Profits, not Wages, are the Driving Force Behind Inflation
What’s causing the current surge in inflation? And what should be done about it? In this new video, the latest in our “Debunkers’ Academy” series, Jim Stanford from the Centre for Future Work shows it’s not higher wages driving higher prices — in fact, wages are lagging far behind prices, and falling in real terms. The real culprit is corporations, who have taken advantage of the disruptions of the pandemic to jack up their prices (and their profits). This inflation is different than the 1970s, and it needs a different solution. Watch and learn! https://www.youtube.com/watch?v=8DgwM7nruQg
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Business Profits from Inflation, but Workers Will Pay to Bring it Down
As the Bank of Canada announced another increase in its trend-setting interest rate today, new data from Statistics Canada confirms businesses have pocketed record-breaking profits from accelerating inflation, while workers’ wages lag far behind. Centre for Future Work analysis of national income accounts released yesterday by Statistics Canada indicate that after-tax corporate profits reached their highest share of GDP ever in the first quarter of 2022, as inflation surged. After-tax profits grew 11% in the quarter (compared to the fourth quarter of 2021), to an annualized total of over $500 billion. That represents the highest share of total GDP (18.8%) since Statistics Canada began collecting GDP data. Meanwhile, workers’ wages…
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Don’t Make Workers Pay for Inflation they Didn’t Cause
The gap between inflation and wage growth for Canadian workers is exacting a punishing toll on real living standards. In the last 12 months alone, consumer prices increased more than twice as fast as wages. The gap between the two translates into a substantial reduction in real living standards for workers. In this commentary (which originally appeared in the Toronto Star), Centre for Future Work Director Jim Stanford provides evidence that the current surge in inflation cannot possibly be attributed to labour costs. Business profits have widened as inflation picked up steam. Lifting wages (for both private and public sector workers) to protect against the effects of inflation does not…
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Decarbonized Electrification Would Generate Significant Job Gains
A new report from the David Suzuki Foundation takes a deep dive into the employment gains that could be achieved through the rapid electrification of Canada’s economy, driven by the expansion of sustainable power generation and infrastructure. The new report, “Shifting Power: Zero-Emissions Electricity Across Canada by 2035”, estimates that 75,000 net new jobs would be created by the expansion of clean electricity generation and use over a 15-year period. This would contribute substantially to the attainment of Canada’s net-zero objectives, as well as to strengthening employment outcomes for Canadian workers as the economy shifts toward sustainable energy sources. Centre for Future Work Director Jim Stanford provided a supplementary analysis…
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Facilitating Workers’ Choice to Get Together
It’s no surprise that more workers seek the bargaining power and protection that comes with a union: to try to make sure their wages keep up with inflation, they are safe from COVID at work, and more. But often it takes an epic battle, like something out of a Hollywood movie, to achieve that goal. That’s because of multiple barriers erected in the path of unionization, by employers who want to preserve their unilateral control in the workplace. In this commentary, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford discusses why unionization is so difficult, and what policies would facilitate fairer and more democratic certification…
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Inflation: Causes, Consequences, and Cures
The surge in inflation in recent months has generated great concern and debate in Canada. This inflation is clearly the result of unique and often external factors related to the COVID pandemic and subsequent recovery: including disruptions in global supply chains (such as the chaos in superconductor markets), energy shocks (made worse by the war in Ukraine), and shifts in consumer demand away from services and towards goods products (due to restrictions on many service activities during the pandemic). Despite the unique nature of this inflation, anti-inflation hawks are now dusting off their old policy recipes to restrain domestic demand and employment, and wrestle inflation back to the ground. The…