Reward hard work with fair wages for workers says MP

Photo: Contributed

South Okanagan-West Kootenay MP Richard Cannings

We’ve just celebrated Labour Day, a time to thank the workers of Canada for their efforts that drive the Canadian economy.

Their wages not only benefit themselves but flow through local businesses across the country. When organized labour is strong, gaining liveable wages and benefits and protections for workers, the country is strong.

For the past 50 years or so, the prevailing economic strategy of most governments has been to provide benefits to big corporations under the misguided belief the wealth that tax cuts for those corporations would trickle down to the rest of society. The trickle-down theory has been thoroughly debunked, most recently by an in-depth study by the London School of Economics, which found tax cuts for the wealthy only benefit the rich.

In Canada, that policy has cut federal corporate income tax rates in half over the past few decades. How have workers fared as a result? Well, the study found not only do corporate tax cuts not benefit workers through new investments, higher wages and more jobs, highly-paid executives benefited enormously.

The study concludes: “If you cut taxes on the rich...they then bargain more aggressively for their own compensation at the direct expense of workers lower down the income distribution.”

So increased corporate profits go to ballooning executive salaries and increased dividends for shareholders. That disparity is clearly seen when comparing the rate that national economies have grown over the past years versus the rise in wages. In the U.S., the GDP has gone up by more than 80% since 1980, while average income has increased by less than 20%. This is the growing gap between the rich and average workers.

So it’s no wonder people are struggling. With stagnant wages and rising food and housing costs it’s tough to get by. Working a full-time job should provide you with enough money to buy food and have a roof over your head.

This round of inflation has been driven by outside economic forces—Russia’s invasion of Ukraine, the COVID pandemic and supply-chain disruptions—not by rising labour costs. As inflation has made life difficult for many Canadians, workers have been demanding better wages to keep up.

Too often we forget that labour is a two-way street. When we hear of a labour dispute, it’s often reported as workers demanding too much of their employers, but much of the time the opposite is true.

In the recent dispute between Canadian National Railway and Canadian Pacific-Kansas City and their (unionized) railworkers, most reports suggested it was the workers who were threatening the Canadian economy. But, in fact, it was the companies that locked out the workers.

Usually the two big rail companies negotiate with their unions on alternate years, but this time they locked out their workers at the same time to put maximum pressure on the government to short-circuit the bargaining process, taking away from the unions the only power they have to negotiate for better wages and safer workplaces—the right to withdraw their labour.

I remember attending a chamber of commerce breakfast about 10 years ago where the guest speaker was the vice-president of ScotiaBank.

At the end of his talk he was asked by someone in the audience, “What keeps you awake at night”. He answered right away with, “the growing gap between the rich and poor,”, and added that if that issue was not addressed by governments promptly, it would continue to drag the economy down as workers would have less and less money to purchase goods and services that keep the economy going.

We should reward hard work, whether that work comes from an executive or a blue-collar worker. We should reward the risks that small businesses undertake to grow their enterprises to benefit themselves and the local economy but we must also remember that workers are at the heart of a healthy economy and if you make sure workers are treated fairly and compensated enough to live in dignity, they and their labour will keep the economy healthy.

Richard Cannings is the NDP MP for South Okanagan-West Kootenay.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.