In the age of cyber capitalism, it is wage and salary earners who take it on the chin. That lesson has been driven home by Bell Canada's callous decision to dump 2400 phone operators by selling its telephone-operator division to an American owned company.
The mostly female employees, who have been fighting for pay equity, now may end up with pay cuts of forty per cent. To keep their jobs, many of the operators could have to relocate as the number of phone operator centres is drastically reduced.
Relocating will be no easy thing for the operators, many of whom are single parents. One of the consequences of Bell's move is that operator centres in smaller communities such as Barrie, Bracebridge, Belleville and Huntsville in Ontario are likely to shut down. Moving down the road to another location to keep a job that pays much less will not be possible for many of these women.
What is happening to the telephone operators is the story of the 1990s for too many wage and salary earners in Canada. Consider the case of the meatpacking workers at Maple Leaf in Edmonton who lost their jobs last year because they wouldn't take a huge cut in pay. Heeding the Edmonton example, many of the workers at Maple Leaf in Winnipeg took cuts in their pay from $16 an hour to $9 an hour to save their jobs.
As stock markets soar upwards, leading companies have adopted the strategy of squeezing their employees through layoffs and pay cuts.
At work in companies like Bell Canada is a management mindset that insists that even though they are already highly profitable, they have a right to shed workers to make themselves still more profitable. The managers of large corporations now set their profit goals by drawing lines in the sand. If a company is making 11 or 12 per cent a year, in its return on equity, while other companies are making 16 or 17 per cent, then top managers argue that it is their duty to move toward greater profitability. They are unwilling to ask shareholders to accept a little less in order to preserve jobs. (In return for a commitment not to name the specific companies, I have been shown internal memos written by Canadian corporate managers which argue precisely this case.)
We live in age of widening inequality. Over the past 20 years the income gap between the rich and the rest of the population has increased hugely and the wealth gap has become a chasm. From the mid 1970s to the present, the inflation adjusted income of the average Canadian male has not increased and remains below $35,000 a year, while the real income of the average Canadian female has increased a little, to just over $19,000 a year.
Meanwhile the incomes of chief executives of major North American firms have soared from about thirty times to about one hundred times those of their average employee. In 1996-97, when the value of North American stocks grew by $2 trillion, half of all the gains went to families with incomes of over $200,000 a year.
What has happened is that the link that created a community of interests between profitable companies and their employees has been shattered. Employees are allowed to help their companies make plenty of money, just as the Bell operators have for decades. But once those employees threaten to reduce the rate of profit, even by a little bit, the companies dump them or farm them out.
The great challenge we face is how to ensure that the productivity gains that flow from revolutionary technology get distributed to the majority of the population and not just to a privileged few.
We need to put some fresh ideas on the table to make sure this happens. As a first step, legislation should be passed to levy a steep surtax on any firm cutting its workforce in a year in which the company has declared a profit. Walking away from workers creates huge costs for those workers and their communities. Footloose companies should be forced to help pay those costs.
Over the longer term, the best way to re-create a community of interests between wage and salary earners and their employers is for employees to acquire ownership of the companies they work for. Legislation could be passed to earmark a fixed proportion of the net income of a firm to go into an equity fund, owned by the wage and salary earners, which would eventually give them a majority of the voting shares in the firm.
If we don't take steps like this, greed will rule.
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