Monday, April 18, 2016

Two weights two measures: Labour Vs. Capital

Over the past 20 years, as a results of the NAFTA agreement (North America's free trade agreement) and the entry of China into the World Trade Organisation there has been a  completely changed the economies of Canada and the US.  Blue collar America got killed; Canada and the US have lost a massive number of "high paying" manufacturing jobs to China and Mexico.

Its all well and good, and frankly for Canada's economy it has been excellent. 

Yet I have not heard a word about compensating those who have lost their job and their trade. Because in our economic system people are disposable (maybe not on the scale of China and India, but you all get my point).  If you lose your job because you were a welder at Ford and it was cheaper for Ford to get its car welded in Mexico -- well good luck buddy; here are a few months of salary (usually not that much) and unemployment benefits for a few more months.  That's it!  A life is worth 6/8 months of near starvation cash.

However, if you own a taxi license, because it has a cash value -- mainly because you may have bought it 20 years ago for $5,000 well then you are owned compensation!

Now I am not saying that taxi drivers should not be compensated if they lose business because Uber of Lyft of some other provider gets in the way, but it is remarkable that the same economists (yeah you know who you are) have no problem heaping people into the garbage heap -- hey your trade is no longer relevant get training and become a computer programer, but these same economists want the taxi drivers to be compensated (or at least the medallion owners).  

Now I know what happened, Capital (as opposed to labour) has become, in the eye of most economists, more valuable -- because its not squishy.   Until you have fired someone (whatever reason) its hard to understand the human suffering.  So its been largely ignored.  How much should you compensate the welder with 20 years experience -- how much is his knowledge worth now that its no longer necessary.  A medallion has a market value (they are often sold).  Still Capital gets compensate and labor doesn't, and most economist seem fine with that.

I get really pissed with my colleagues who have no problem with NAFTA -- but suddenly become bleeding hearts when it comes to capital -- they also get mightily pissed off when you point out their hypocrisy.  




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