The Jobs Conundrum
Our economy is dependent on all of us spending money. The consumer economy is not as pervasive as it is in the US, but then again we are dependent on the US for our economic health, with over 70% of our exports landing there.
So, if we are not creating jobs consistent with the skills of middle Canada/America, no matter how much the top 10% spend, our economy with slowly shrink as unemployment escalates. And we may not even notice the growth in unemployment as those out of work become discouraged looking for non-existent jobs, and simply drop out of the job market, never to be seen again in employment statistics!
So, what happened to the jobs we used to have that gave the semi-skilled and moderately intelligent a decent wage?
At the bottom at the assembly/back office level they went to China, India and Mexico. Further up the food chain, the jobs were eaten by technology. And although many of the jobs that went to the BRICs are now shifting in to other lower wage countries, they will never “come home”.
Even worse, the pace of job shrinkage in the middle caused by new manufacturing technology is accelerating. Look at the headlines. Macy’s whacks another 3000 workers because of weak sales. HSBC shrinks a 10,000 as fewer humans are needed to run Banks thanks to new automated eco-systems revolutionizing the financial system.
The nature of employment is also shifting as the Uber/AirBnB, “gig” economy becomes more pervasive and internet shopping closes big box retail. In the gig-based world, don’t look for traditional benefits, job security or consistent income.
For the bright, innovative pioneers, the golden road will get wider and richer. For the rest of us……..? And without the rest of us, our economic model is doomed.
What to do?
Improving the educational system so more graduates have the skills needed for the shrinking job market will help the folks who generally do well anyway; those being the the reasonably gifted middle group that has access to (and support for) education and training. But for half the working population, our old model of employment is gradually sliding off the truck.
The North American economic model does not work anymore and government programs trying to increase traditional employment are doomed to failure. The past will not return. So we need accelerate our shift to a Minimum Wage Economy (MWE) that assures a decent life for all and an evolving but healthy economy. And fortunately, most developed countries are quietly moving in this direction even if folks like us can’t see it.
Finland may lead the way as a guaranteed annual wage is already being legislated. The UK is assessing the model as are other European countries. A few years back, India guaranteed a minimum wage for farmers and even the US is creeping up on universal health care and reluctant increases in social services. The howling of the Republicans over Obamacare and any form of social spending is the dying voice of history as day by day, the North American economy adjusts to the new normal and the sin that cannot be named (socialism?) slowly expands in reality, if not in acceptance.
Moving Towards the Minimum Wage Economy
What’s happening is that the pieces of MWE programs are being put in place one by one and although MWE may not be named as such, one day it will be there. All the parts of the car are being designed, built and delivered. Once all are done, the final assembly will be a car made of the parts. The final fight will be what to call the vehicle…..but a car it will be.
No car, no economy. This is not social policy (heaven forbid), but inevitable economic policy for countries caught in the transition from the Downton Abbey economy of a job for everyone and everyone knowing his place, to the Gig economy where everybody does what he or she can and a basic income is guaranteed.
A New Accommodation
Generally, history teaches us that neither our best dreams nor our worst nightmares ever come true. Some accommodation is made eventually ….and we plod on.
A new accommodation to let us slide, perhaps awkwardly and painfully, to new wage distribution model that will support the economy is unfolding around us and little by little, the Minimum Wage Economy is falling into place. Republicans, taxi drivers and Unions will be strident, but it is happening now.
What do you think? Share your thoughts in the Comments below.
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