This major focus of the Canadian election is missing what could truly help workers
Canadians are on edge because as many as 600,000 jobs are at stake due to tariffs levied by US President Donald Trump.
But the focus on manufacturing obscures what truly ails the working class in an advanced economy like Canada's. Manufacturing's share of employment hovers at around 8.9 percent, while nearly 80 percent of Canadians work in the service sector.
A recent report from the non-partisan Cardus think tank notes that Canada's working class today is 'likely to be a female, recently immigrated worker in the services-producing sector. The new working class, in other words, is now more personified by a Walmart cashier or an Amazon delivery driver than a General Motors factory worker or a Domtar mill hand.'
Manufacturing gives way to services
So why is there such emphasis on manufacturing?
It's easy to understand. Manufacturing has been essential to industrialisation, from the British Empire to China's unprecedented growth in recent years.
The late British-Hungarian economist Nicholas Kaldor argued that manufacturing is the engine of growth due to increasing returns to scale, strong links to other sectors and its role in technological development.
But as countries become wealthier, an increased demand for services follows, creating jobs in that sector. Manufacturing sectors in wealthier countries tend to invest in labour-saving technologies. The US, for example, has seen manufacturing employment fall while output has increased.
Labour-intensive sectors like clothing cannot compete with Bangladeshi wages, but discussions about manufacturing jobs in Canada and other advanced economies too often focus on wage competition instead of job losses through automation and increasing productivity.
There were losers when the globalisation era began, but countries like Canada and the U.S. are wealthier today than they were in 1994, when the North American Free Trade Agreement (NAFTA) was signed. As American economist Jeffrey Sachs has pointed out, governments have failed to redistribute the wealth created by gains from trade to those at the bottom of the income scale.
Four policies of a real working-class agenda
There are several key policies that politicians should be proposing that would really help the working class.
First is one that all politicians are talking about: building more housing.
Second is related to key elements of social reproduction — that is, care work. There must be strong funding commitments to ensure a national childcare system functions properly.
With Canada on track to experience a surge of its elderly population, long-term care also needs to be a focus. Personal support workers must earn a living wage and must have better working conditions. Canada's aging population is also why decreased immigration is a bad idea.
The third policy requires the federal and provincial governments to get serious about active labour market policies. This means building a labour market training system that actually works, something Canada has lacked.
These policies are generally not implemented in liberal market economies like Canada and the US.
But in countries like Sweden with active labour market policies in place, 80 percent of the population has a favourable opinion of robots and AI compared to two-thirds of Americans who are concerned about technological job loss. The state's ability — or lack of it — to provide social protections and job re-training has real impacts on how people perceive technological change.
Canada also needs to recognise foreign credentials. Its reluctance to do so has had a negative impact on the economic prospects of immigrants. Canada should also consider making higher education free.
The fourth policy involves better worker protections that include a strengthened Employment Insurance that is easier to qualify for, improved protections for gig workers and increasing union membership.
Apart from the public sector, Canadian unions have not fared well organizing in service industries. Unions need to make a serious effort to organize in retail, food service, the gig economy and logistics, despite the challenges. Canadian unions may find that they have little choice but to do so, as their presence in the private sector continues to decline.
Inequality, wealth redistribution
The most significant barrier of these four policy proposals is that most require an increased redistribution of wealth. Canada over the past several decades has retreated from wealth redistribution and as a result, economic inequality has surged.
White blue-collar workers in the US in areas hit by factory job losses swung to Trump. A Canadian version of this is happening with some blue-collar unions endorsing the Conservatives under Pierre Poilievre.
Fixating on manufacturing is not a solution. After 2012, China began shedding manufacturing employment. Job demand in Chinese manufacturing today is in sectors that require skilled workers for software and AI systems. Services like retail, technology and transportation are also drawing in workers from manufacturing.
Building infrastructure, green energy
Not all blue-collar work will disappear. Canada needs labour to build not just homes, but high-speed rail.
Active labour market policies will be key to ensuring manufacturing workers transition into building infrastructure and green energy. Canada can also remain competitive in areas like aluminum production .
Policymakers need to understand our post-industrial moment, and focus on a just transition for manufacturing workers.
Labour and progressive movements have long championed a just transition for fossil fuel workers. Like factory workers, fossil fuel workers have been courted by right-wing politicians who tell them environmental policies will destroy their jobs. At the same time, oil companies automate their jobs anyway.
These policies are not easy to achieve, but there are few other options for Canada if it wants to be carbon-free, open to the world and more equal. Canada's economic nostalgia for manufacturing is ultimately strange given it's also a common talking point of Trump, a politician who's wildly unpopular in Canada.
Gerard Di Trolio, PhD candidate, Labour Studies, McMaster University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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