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Wednesday, January 25, 2012

Everyone wants high-paying jobs and low-cost goods

An old boss of mine used to say: “Don’t look for logic in this world.” He was also fond of repeating a version of a Bible saying: “As you sow so shall you reap.” I thought of this when reading a recent article by Tavia Grant in the The Globe and Mail regarding a new CIBC report that says the composition of the Canadian labour market has tilted towards lower-paying jobs.

Apparently, CIBC maintains an index on “employment quality” that—while it’s above levels seen through the recent recession—has fallen by more than one percentage point in the past year.

The bank’s index incorporates three measures: full-time versus part-time work; the mix of paid and self-employment, and wages among full-time jobs. And, although the first component rose in 2011, the other two components weakened.

Not surprisingly, the biggest drop in quality was in Ontario, while Alberta continued generating high-quality jobs.

Here is what I find illogical.

For the past several decades, Canadian consumers have demanded the lowest prices possible from retail stores like Sears, Walmart and others too numerous to mention. Some Canadians even will drive several miles to cross the border and shop in the United States so they get even lower prices.

Retailers, in turn, demand lower prices from manufacturers and wholesalers, which then source their products from faraway places where labour and operating costs are far lower than they are in high-wage Canada.

Without manufacturing work to perform, therefore, relatively high-wage manufacturing jobs are lost and the lower-wage service jobs become a greater percentage of our economy. And as we have transitioned into a service economy, part-time and self-employment have become more prevalent.

Yet, even as Canadians continue to demand the lowest price possible, they lament the deterioration of employment quality.

Illogical.

Reference:  The Globe And Mail, More Canadians in low-paying jobs

© 2012 Russell G. Campbell

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  1. Seems like this is a vicious cycle we cant get out of

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