Harper’s Economic Plan: Attack Workers’ Wages

(this post appears on rabble.ca)

George W. Bush and Stephen Harper are once again (perhaps for the last time) partners in making economic policy. Now that the U.S. is providing a multi-billion dollar loan to General Motors and Chrysler, Canada is going to do the same. Priority one for Bush and Harper---make the workers take a hefty pay cut.

Read the front pages of the Globe and the Star today and you’ll see it in black and white. The first instinct of those who run corporations and the politicians who do their bidding is to attack unions and the benefits they have won. Take a look at the comments on the Globe story. Dozens of them are replete with vicious insults directed at auto workers and the CAW. A whole sewer full of them.

We should be ready for much more of this. The first and most dependable response of capitalists to a recession---much more so to a depression---is heightened class hatred. Workers are attacked as lazy, ill-educated, slothful, rapacious, unproductive sons of bitches who want more than they deserve. As though the workers in the plants decided on the product mix at Gigantic Motors.

The tactic goes back centuries. Corporate moguls (in the earlier days master tradesmen and merchants) and their scribes launch an assault on well paid workers and do their best to make lower paid workers resentful and envious of those who’ve done better.

Strike down the highest paid workers. That’s what Bush and Harper are determined to do with their loans to the auto makers.

It works like this. If the best paid workers are forced to take cuts, then the pressure will be on for all other wage and salary workers to do the same. Get realistic, the argument goes. “Even the fat cuts on the assembly line took a cut, so now it’s your turn.” The people who found themselves cheering against the auto assemblers will soon find that their ox is the next to get gored. And who will be there to defend them when their turn comes---the unions they so cheerful denigrated.

The first response of business in a recession is to try to force a general pay cut on ALL wage and salary earners. We have entered that phase. This is class war and this one was not declared by the workers.

In the case of the auto workers, the shrieking stories on the front pages seldom point out that in terms of the costs of the Detroit 3 automakers, their labour costs in Canada have declined by about twenty per cent as a consequence of the rapid decline of the Canadian dollar against the U.S. dollar. And the stories seldom mention that the health care costs of the companies in the U.S. are largely covered by medicare in Canada. It’s not for nothing that the Big Three have regularly made about twice as much per vehicle produced in Canada as they have in the U.S.

Then there’s the economics of all this. While talk of economic stimulus has been in the air, the old instinct of Bush and Harper to do exactly the opposite comes to the fore.

Slash the pay of auto workers and then after them of wage and salary earners in general and the consequence is to push us more rapidly into deflation, the exact opposite of stimulus. Lower wages mean lower purchasing power. With that comes the further deterioration of retail operations and services in general. Cutting wages and salaries speeds up the downward spiral of the economy from recession to depression.

During the Great Depression of the 1930s, corporate managers and their media flunkies made the same case for wage cuts. And their brilliant logic kept the economy in the doldrums for a decade, ending only with the Second World. War.

Harper’s economic plan will be all about class. He’ll want two kinds of cuts: cuts to the taxes corporations and corporate executives pay; and cuts to the wage and salaries employees earn.