I’ve spent the last week dealing with a succession of puking children (my three little girls), who like to nuzzle in close to me in the middle of the night – right before heaving. Ahhh, the joys of spring flu.
So my brain is like some of that mechanically tenderized beef that we’re now going to be warned to “cook thoroughly” so we don’t end up dying from e. coli and stuff like that. It’s been pounded up and is a lot softer than it was before, and is possibly infected – or maybe just super-overtired.
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Late season rainfall creates concern about Prairie crop quality
Praying for rain is being replaced with the hope that rain can stop for harvest. Rainfall in July and early August has been much greater than normal.
This is why I think I can’t remember the term that economists use to describe significant costs that are accruing from some activity but aren’t accounted for, therefore creating a false notion of whether or how profitable or loss-making an activity really is. I couldn’t even successfully Google the term today, my brain is so pummelled.
I’m searching my mind and the internet for this term, because it played a role in an interview I did last week with an advocate for the foreign temporary workers that play an important role in many Canadian agricultural industries, such as the Manitoba vegetable patch and the slaughterhouse business.
Migrant workers come to Canada, often for many years in succession, work hard, support the economy, yet are not covered by government healthcare programs when they’re here and have to pay in to programs like Employment Insurance for which they are not eligible. And in the end, even those some of these (mostly Mexican) workers come to Canada every year for more than a decade, they never accrue any credits for immigration, so they are unlikely to ever be allowed to immigrate.
The advocate is part of an organization that wants to get more program coverage and more rights for the foreign workers.
I’m very sympathetic to the plight of these workers, because they are a highly vulnerable group of people who could be easily exploited by bad employers. With a good employer, they can have a pretty good life – one far better than if they stayed in Mexico all year and got paid little and laboured in worse conditions than in Canada. But with a bad employer they could become little better than indentured servants, which isn’t a lot better than serfdom, even if voluntary.
But the second question I asked the advocate, and the issue that leapt first to mind for me, was what would happen if foreign migrant workers were extended more rights, privileges, protections – just like Canadian workers. Wouldn’t that almost entirely remove the economic reason anyone would want to have them come to Canada? If they aren’t more flexible, affordable and dedicated than Canada’s sullen domestic workforce, why bring any in? In the end, if they become more costly and less useful than they are now, wouldn’t they just stop being brought in? How would that be good for these workers?
The advocate noted that if employers offered better conditions and pay, they’d be able to get more Canadian workers and keep others such as better-protected migrants happier and more willing. But that, to me, exposed the fundamental problem: we in Canada operate agricultural industries that compete head-to-head with American industries, and those industries often have far lower labour costs than ours do. If we raise our wages even higher, how are we going to be able to keep any of these industries at all?
The advocate didn’t have much of an answer for this, and I don’t either. Her general view was that free trade creates these problems and Canada should not embrace more free trade if it creates a “race to the bottom.” She felt free trade itself made this sort of situation inevitable. My view was a bit different: there are flaws in some of our present free trade situations and we need to try to fix them – at least a bit – if we want to get the benefits of free trade. Some of the flaws stop it truly being free trade.
For instance, we have free trade with the U.S., but radically different wage rates at times in industries like livestock slaughter. Why is this difference so great? Shouldn’t free trade arbitrage-away huge spreads? You would think that would happen and at least keep the spread narrow.
But the sleazy little secret underlying some American agricultural industries is something that isn’t easily dealt with: the armies of illegal aliens that American employers can exploit and underpay in order to get a labour cost advantage. American minimum wages are often lower than Canadian minimum wages, but illegals often work for half or less than that minimum wage. And they don’t get benefits. So some American agricultural industries can undercut Canadian industries not because of weaker state or federal standards, but because some are able to use a captive herd of workers that knocks their costs far beneath those possible north of the border.
That’s one of those unaccounted-for costs that we have to deal with: access to illegal labour isn’t covered by our free trade agreement with the U.S. You’d think you could hit American imports with duties if they rely upon this kind of an advantage, but that doesn’t appear to be possible. The similar situation applies to the issue of carbon taxes or similar sorts of environmental costs we could add to activities that we believe cause negative environmental consequences. If we hit our manufacturers with those added expenses, but competitors like China and India don’t, aren’t we simply killing our own industries and favouring much worse foreign industries? (Some Chinese labour standards – and those in places like Bangladesh – are a more egregious form of cost-undercutting than anything we face from the U.S., but those countries aren’t right next door.)
I remember back in the days of the negotiations leading to the Canada-U.S. free trade agreement there was discussion of the idea that perhaps environmental and labour standards should be part of the deal. These were never included, but I remember at the time thinking it made sense, if it wasn’t too onerous, restrictive or used as the excuse for erecting non-tariff trade barriers. But since environmental regs and labour standards are substantial costs, and hammering them down to gain an advantage runs counter to the spirit of free trade, it made sense to me then to somehow ensure advantages like access to 15 million illegal alien workers couldn’t be used to kill our industries.
There’s no easy way to deal with this problem of having free trade with places that create cost advantages by undercutting basic protections and supports that we feel all humans should have. One answer is to ignore the problem and just set standards and costs that we think are morally justified and damn the consequences.
To me, that seems noble – and suicidal for our economy.
Another answer, and one I think that appeals to the advocate I was interviewing, is fighting against free trade extension and maybe rolling back some of the agreements we already have, if they are causing the “race to the bottom.”
That to me also seems economically suicidal, since Canada is now and always has been utterly trade dependant. We need more access to the world’s market, not less.
So how do we deal with these situations that undermine our industries and what we feel is acceptable, but for which we don’t have any tools to alter? That’s something we can fret about as our packers struggle to compete with lower U.S. wage costs, as our vegetable growers pay far more per hour than much of the California vegetable industry pays, and as the general cost structure of our agricultural industries floats above that of some of our main economic competitors.
You won’t get an answer from me on how to fix it, because I don’t have one. Do you?
