President's Message

The Ground is Always Shifting

February 22, 2013

At first, we didn’t know what to call it even though we could feel it. We had a growing sense that something wasn’t right. Things that mattered to Ontarians stopped being fair. Money and power began to outweigh the quality of peoples’ lives.

In the 1930s Americans saw a huge shift in wealth through their New Deal, a set of economic programs enacted in response to the Great Depression. Today both Canada and the U.S. are seeing another big shift.

Commentator Dylan Ratigan has called it “corporate communism”. He points to the collusion that comes from the takeover of government by corporations who promote policies that protect only their interests. As in the Soviet Union, corporations then become less competitive and innovative. The public pays the cost.

“The concept of communism is rightly reviled for the simple reason that it is blind to human nature, allowing a small group of individuals (corporations) near-total control, while sticking everyone else with the same crappy systems - and the bill. America spent countless lives and half a century fighting against this system of government. So why are we standing for it now?”

While Canada is not the U.S., corporate communism has found its way into Ontario. Corporations pulled it off with right wing politicians. They are now running off like bandits while the rest of us are pinched hard.

One result of the takeover is billions of corporate dollars stashed away, often in off-shore accounts, rather than reinvesting in the economy. Dead corporate money has deadened society by sparking wage reductions and income inequality. Today, 9 out of 10 Canadians earn less than $80,000 per year leaving that top 10 percent very rich indeed. Through this a just society is destroyed along with our quality of life.

Does Ontario need dead corporate money or working people earning fair wages? The later of course! Tax cuts won’t create jobs. Workers with disposable incomes will.

Another feature of corporate communism is defined by right-wingers with the term: “starve the beast.” This strategy works in four steps: (1) cut taxes; (2) wait until the resulting budgetary deficit becomes a problem; (3) cut spending in order to deal with the budget crisis; and then (4) repeat step one.

The corporate plan for Ontario is based on right-wing policies: starve the beast; lower taxes; stagnate wages; slash interest rates; provide easy credit.

Let’s look at how these factors have worked in Ontario:

This plan brought wage stagnation. Some thought government did not appreciate that stagnant wages meant reduced tax revenues and larger deficits. They knew. Look back at step 2 in “starve the beast.”

The plan then lowered interest rates to provide easy credit. For a time, this allowed many to continue consuming. These high debt levels set the stage, in 2008, for the worst international financial collapse since the Great Depression. Even in 2013, we still hear warnings about Canadian’s personal debt. In 1995 the average Canadian household had a debt to income ratio of 100 percent. By 2010 that debt to income ratio had grown to about 155 percent. Personal debt is still at record levels.

The situation grew worse with the next steps in the plan. Tax cuts followed. So did growing unemployment. Both reduced government revenues. While tax reductions provided higher disposable incomes, these were just an illusion. Many community services disappeared while others were sold to the private sector. User fees then applied reversing the tax savings. Corporations profited as they took over the privatized services.

According to plan, working people were also told to do more with less. This placed worker against worker, demonizing unions as greedy and unreasonable. This caused a drop in union membership, as a percentage of the workforce in Canada. Reduced union density eroded private sector wages, focusing attention on the public sector. There was little factual reason for this as studies have proven that the wages are the same in similar public and private sectors jobs.

The plan then focused on public service costs even though they had not caused the deficits. Deficits needlessly and purposely developed from interest rate reductions, increased personal debt, tax cuts, wage stagnation and corporate greed.

And to what end? While right-wing governments talk about fiscal responsibility, they seldom leave public finances in better shape than they found them. Look at the Harris term in Ontario which, after many painful cuts, increased Ontario’s deficit by billions of dollars.

Another perversion came in 2008, when the economic bubble burst. Corporations went to governments claiming the capitalist system would fail without taxpayer funded bail-outs. They got the public’s money, nobody went to jail, and Wall Street and Bay Street kept booming.

These factors set us on our current course in Ontario. Instead of an expanding economy based on wage increases, wealth was drained away by two decades of corporate greed financed by taxpayers. Bail-outs stretched government fiscal capacity, leading to reduced public spending. People lost on two fronts: wages and public services.

That’s Ontario’s “corporate communism” story. The rich have banded together to take control of government. Now, money goes right from our pockets to theirs. This has a big impact at the bargaining table. Threats of layoffs, downsizing and wage loss abound. An ill-informed public often supports these moves. Many people have yet to figure out this complex economic conflict.

The day of discovery is coming. People will grasp that the labour movement didn’t cause the financial crisis. Public sector workers weren’t at fault. Equally, private sector workers were not to blame.

I am amazed at how politicians move from government to high paid jobs on Bay Street. Look at the latest examples: ex-politician Pupatello and former Finance Minister Duncan. Government work feathered these nests in the private sector. Union members and the public, who criticize a bargaining team or the union for taking a stand, should direct their anger to where it should belong: corporations and the politicians that supported this corporate takeover.

The times are changing. OPSEU has changed public dialogue on tax fairness, income equality and the value of quality public services. We are all coming to a point that will mark a change of course for Ontario. But there is more work to do. We will continue to expose the truth. Together we will set the stage for change - the OPSEU way - by moving Ever Forward.  

In solidarity,

Smokey Thomas
 


Ontario Public Service Employees Union, 100 Lesmill Rd. Toronto, ON M3B 3P8  (416) 443-8888

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