Canada's Economy: Not Exactly Healthy

If you are a worker, you already know that Canada's economy is a mess.  The only people who don't seem to know it are at the top.

Press Progress published a very detailed analysis of how messed up our economy is today.  A few of the highlights:

First, the good news: Corporate Canada's profits have hit a 27-year high, according to a new report by CIBC World Markets. Bay Street has never been happier, right? 

Well, there's just one little catch: new Statistics Canada data shows the Canadian economy shrank in January. All those layoffs and store closures you've been hearing about lately? "Ugly" retail sales? That stuff.

Yeah ... "that stuff".  If you work in retail, you've probably been smelling the rot that's been happening as hours of work are cut further and further in stores, although strangely the execs in head office don't seem to be taking pay cuts, or the quality of product being brought in has nosedived at about the same rate that sales have been tanking.

In Calgary (and the rest of Alberta), we've been experiencing enormous numbers of layoffs in the oil patch.  Not hundreds of jobs, but thousands of them lost.  One thing to notice though, is that the people at the top are not the ones bearing the brunt.  It is contractors and middle tier workers carrying the burden.

In Alberta, we are being fed the line that "corporate tax hikes will kill jobs".  This is a straight up lie, and we all know it.  It's a gambit play by the wealthy to keep as much money as possible, at the expense of Albertans.  It is not merely a matter of raising the tax rate, but also closing up all of the escape hatches used to funnel revenues out of Canada.  You earn a dollar here, or on our resources, you pay a fair price for it.  Current corporate taxation and royalty regimes in Alberta definitely are not reasonable, especially when we compare ourselves with say, Norway.

There's a point to this.  It isn't just that we are losing jobs in retail, or that the oil patch in Alberta is tanking.  It is that we have had a uniquely narrow-focused government which has been paying off their big donors (big business and the executive classes).  It isn't Canadians who have been winning, it is the wealthy who have been winning, at the expense of Canadians.  Alberta hasn't put a plug nickel into the Heritage Savings fund in ages.  Why?  Because our governments have been happily handing money over to the corporate world in the name of "jobs".

Jobs, which I will point out, are at best conditional fictions on a good day.  Corporate Canada argues that taxes kill jobs.  This is a lie.  Downturns kill jobs.  Austerity budgets kill jobs.  The speed with which layoffs and cuts begin the minute there is a downturn of any sort tells us a great deal about how much those jobs are really worth.

Canada's governments need to start looking out for Canadians.  Not Canadian corporations, not international corporations.  Canadian citizens.  Period.  Anything else is a disservice to the people that our government is elected to serve.

The Corporate Tax Regime In Canada Is Corporate Welfare

... and it is being done at the expense of Canadians.

Corporate Canada Pays Low Taxes But Contributes In Lots Of Other Ways

Consider the following:

PricewaterhouseCoopers did its own analysis — a survey of the Canadian Council of Chief Executives' roughly 150 members. It was voluntary and only 63 replied. But of those who did, the survey found their businesses paid a total of $19 billion in corporate taxes, plus another $5 billion in various other charges and fees to various levels of government.

Okay, that's a voluntary survey, and doesn't give us the entirety of the picture.

The left-leaning advocacy group Canadians for Tax Fairness said they did an analysis of the top 60 companies listed on the Toronto Stock Exchange, and found only four companies paid the full corporate rate. More than half paid less than 10 per cent, and 13 firms paid less than five per cent.

But, let's take a look at how much was transferred out of Canada, shall we?

For example, in 2011, Canadian businesses invested $53.3 billion in Barbados, third only to the United States and the United Kingdom. By some estimates, the Canadian government is losing $80 billion a year in tax revenue due to this kind of profit-shifting.

Do you see anything wrong with this?  I certainly do.  What it boils down to is that the Corporate tax system in Canada has been gutted from the inside not just with a series of rate cuts, but also with a series of bookkeeping games that make it easier for corporations to shuffle money offshore before it appears on the bottom line ledger.  (at least of the "official" set of books that CRA would see if they did an audit.

In response to this blatant tax dodging, we get the following patronizing response:

"Corporate Canada pays governments in lots of other ways. They pay different levels of governments, they pay property taxes and they pay a variety of fees and charges that in many cases actually exceeds what they pay in corporate income tax," said John Manley, head of the Canadian Council of Chief Executives

Oh gosh, they pay property taxes.  You don't say.  So do I ... your point is what?  Oh, and those "fees" you mention - yeah, well, I get hit with those every time I contact the government too.  I pay fees to register my car, my driver's license, on my utility bills for garbage pickup and water/sewer every time I make a transaction with the government in fact.  Don't feed me a sob story about how hard done by you are with "fees" to the government.

"It's not right," Mr. Manley said. "But figuring out how to fix it without unintended consequences requires really smart people, and the Organization for Economic Co-operation and Development has been working at this for a very long time." 

Mr. Manley said the Canadian Council for Chief Executives supports the OECD's efforts, but until the Canadian tax code changes, businesses have every right to take advantage of what the code allows. 

"There is no one in Canada who wouldn't avoid paying a tax if there is a legal way to do it," he said. "It doesn't mean it's wrong to minimize your tax. It just means that governments have to get rules in place and make sure everyone is playing by them."

The issue is that governments have spent the last twenty years downloading the bulk of the tax burden onto middle income earners and telling us that they are "cutting taxes", when all they have been doing is playing to the sociopaths in charge of the large corporations.  It's not small, privately held, corporations that are the problem here - it's the big entities who have the time and resources to invest in figuring out the next way to game the system or lobby the government into opening new loopholes for them to exploit.

Under the Harper Government, we have seen them consistently reduce the tax rates, downloading everything they can from the Federal level to lower levels of government, at the expense of individual Canadians.  Just as we found in Alberta under Ralph Klein, yes the budget appears to be balanced, or even in a surplus position.  Except that there is a growing deficit in other areas - infrastructure, social programs and the like - things which affect individual Canadians far more dramatically.

Lower taxes is a false economy - it does not result in more efficient government, nor does it "encourage investment".  For the last couple of decades, the corporate world has used the "if you tax us too much we'll stop investing here" as a threat.  It's time to call their bluff.  Companies that want Canadian talent will stay here.  Those that leave will open opportunities for Canadian companies to move into.  It's time that we stopped acting afraid of the multinational corporations and told them pay their fair share.

TFW: The Dark Side Of Corporate Feudalism

The Temporary Foreign Worker program has become a symbol of the worst predations of corporate thinking.  As more revelations come out, the depths that corporate groupthink can sink to are revealed.

Foreign workers recruited from Belize are accusing McDonald’s Canada of treating them like "slaves," by effectively forcing them to share an expensive apartment – then deducting almost half their take-home pay as rent. 

“When we arrived at the airport, they said, ‘We already have an apartment for you,’ so at that point we already know we don’t have a choice of where to live,” said Jaime Montero, who came to Edmonton with four others in September to work at McDonald’s. 

"We had to live there. We were told this is what we are doing," said another worker who didn't want to be named because he still works for McDonald's.

At first glance, providing an apartment that can be rented by the workers almost seems beneficent.

Five workers paying $280 bi-weekly works out to $3,030 per month. That suggests McDonald’s charged them $600 more for rent than what it paid. 

So, the corporation tried to make money off the temporary workers by charging them more in rent than the apartment actually costs the company.  Dishonourable at the least, downright crooked by my standards.  Oh, and it gets better:

“They actually said even if we leave the apartment and go rent another apartment, that McDonald’s would still deduct the rent from our salary,” said the other worker.

So, it's not even an option for the workers to move somewhere else.  The deductions for rent are happening in the payroll?  Holy cow.  This reeks of corporate feudalism at its worst.

This is exploitation, plain and simple.

Time for the TFW program to be shut down, and a detailed investigation of the practices of every company involved.  Worker exploitation is wrong.  Dead wrong.  The sociopaths who are exploiting workers should be charged and held accountable for their misdeeds.

... and the TFW program should be shut down posthaste.  

Corporate Logic

The Globe and Mail had an article yesterday that appalled me to no end.  Titled "In The Search For Savings, The Workplace Gets An Overhaul", it describes Manulife's move into so-called "open concept" workspaces.

Lurking in the midst of a bunch of vacuous platitudes about "collaboration" and "mobile workforces" is a line that underscores the real thinking behind these workspaces:

The objectives are to improve collaboration and cut costs. 

“Real estate is an expense and it needs to be managed,” says Brad Searchfield, global head of corporate real estate at Manulife. “All things being equal, we will use less real estate. Then as we grow, it creates opportunities for us to manage that growth very cost effectively.”

That's right - it's all about cost.  Or, perhaps I should say that it's about costs that some accountant somewhere can measure.  This mentality has other, less tangible costs that are being ignored.  

'Improving Collaboration' is a load of nonsense.  It increases noise in the workplace, it increases "drive-by interruptions".  If your job doesn't require actual concentration to get anything done, then you're probably okay.  If, however, you are one of those unfortunates that has to concentrate to solve problems, you're in trouble.  Are you a manager?  Have to deal with a lot of people all the time?  Congratulations, you just became a major source of noise that everybody else has to cope with because chances are you can't get a private room to have those constant meetings in.

I don't object to highly collaborative workspaces for groups that actually need it.  Imposing it across the board is a guaranteed problem.  I'm a software developer by profession - I do my best thinking when I can get a bit a of quiet time; there are other circumstances where people need both quiet space and collaborative spaces.  

While the idea of "working from home" is an appealing notion, it has its own problems.  Not everybody has the kind of role where working remotely is effective.  Home has its own distractions, and in some cases, there are people whose interpersonal relations in the workplace will suffer quite badly when they are working remotely - they will simply lose the day to day contact with their peers that happens naturally in a workplace.

“Calgary’s just a lot more generous with space,” says Mr. McNair. “In downtown Calgary, the norm for energy firms would be close to 300 square feet per person. Some of the firms are at 400.”But the trend is spreading. 

“Most organizations can reduce their real estate by 30 per cent if they go to a [desk] reservation system or a slightly different workplace model, with very little change, because 30 per cent of those people are either on holiday, travelling on business, ill or out visiting clients,” says Lisa Fulford-Roy, a senior vice-president at design firm HOK, which is working with Manulife.

300 sq. ft. per person?  This is exactly the kind of statistical nonsense that makes organizations start thinking of their people as wooden pegs to be stored as compactly as possible.  I don't know about you, but I've never had a 300 sq. ft. office.  These statistics include meeting rooms, hallways, washrooms and reception areas.  The individual worker in the space every day is crammed into a lot less than 300 square feet.  

Individual offices in the 1990s tended to be about 100 sq. ft., cubicles about 48 sq. ft., and "open concept" desks are smaller still.  These are the real areas that people experience as their workplace.  The common areas such as hallways, meeting rooms and washrooms don't count.  The smaller you make the workspace, the greater the levels of individual stress on the individual workers.  I guarantee that companies will start experiencing greater levels of staff turnover, absenteeism, stress related illness and so on.  

The "work from home" model has other consequences - it effectively downloads the cost of office space and facilities from the employer to the employee.  Even if you have the space available to set up an office in your home, that space costs you money.  It is the employee that foots the costs of the space, heating and lighting and furniture in these contexts.  The company might provide the computer and internet connectivity, but even that is not guaranteed.

Lastly, the geniuses who are promoting these workspaces have forgotten one fundamental rule about people:  we're all different, and workspaces need to accommodate a wide range of working styles.  Try to force a style on people that is contrary to their basic natures, and there will be a price.

On Russell Brand's Interview

I heard Brand's interview late last week, and I've been stewing on it ever since.  

On a lot of topics, I have to say that I agree with Brand's frustration.  The existing power structures are not healthy - in fact I would argue that they have been subverted by a series of forces and factors over a very long time.  

Yes, there are enormous problems with environmental destruction, income inequality and political power distribution in general.  I agree with Russell Brand on these principals - these issues deserve our attention, and to be addressed on the political stage.

To some extent the early signs of the population recognizing what has evolved, and how broken it has become.  The "Occupy" movement is one example of a broad-based recognition of the links between money and power.  In Canada, the Idle No More movement has rightly brought a unique focus on the treatment of First Nations in Canada.  

Where Russell Brand lost me (and it happens quite early in the interview) was in his justification for not voting:

It's not that I'm not voting out of apathy, I'm not voting out of absolute indifference, and weariness, and exhaustion from the lies, treachery, deceit of the political class that has been going on for generations now and has now reached a fever pitch, where we have a disenfranchised, disillusioned, despondent underclass that [is] not being represented by that political system, so voting for it is tacit complicity with that system.

First of all, I have a fundamental problem with Brand's approach here.  He is essentially saying "I won't vote unless somebody changes things to something I like".  That is pushing the responsibility for the change outward and away from him.  It is one thing to say "things have to change", and have some ideas as to what shape you want things to take, quite another to take the stance that Brand has taken.

Second, I call out Brand's "standoff" stance for making the ever critical mistake of choosing not to use all of the tools available to him.  No democracy I am familiar with tries to factor for the opinions of those who do not vote.  Given the nature of Brand's grievances, a failure to vote is all the worse for his position - it all but guarantees that the "keys to power" are handed straight to those that would do the most damage in his eyes.

We have seen this happen quite clearly over the decades in Alberta since Peter Lougheed stepped aside.  Alberta has one of the worst voter turnout rates in the country - largely because the internal power structures have been so effective at dismissing inconvenient opposing opinions, and generally putting in place politicians who are (just) smart enough to step away from implementing the most destructive policies (Klein tried repeatedly to put in place the pieces to privatize Health Care in this province, but never fully implemented it because of the public resistance to it).

In many respects, this is the "boil the frog" approach to issues.  Take a long range approach and very carefully undermine things in ways that are not immediately obvious.  When the right crisis occurs, the public will accept the desired change as "necessary".

While I can agree with Brand that there seems to be a degree of "futility" in trying to vote against the power structure, it is utterly essential to vote.  You may end up voting for someone/something that is still distasteful to you (I've done it more than a few times), but symbolically it remains important because it is one of the mechanisms available to challenge the power structure that you object to.  It is not "being complicit in the system" as Brand accuses it of being, but rather using one of an arsenal of weapons to confront them on their own ground.

If voting is inadequate, then another option is to stand for office yourself.  Be the change that you want to see.  Stand for what you believe is right.  Certainly in Canada and the UK, there is no legislative impediment to doing so, and no legal consequences.  Again, this is using one of the tools of the system, against itself.  It can be a long, hard struggle to be heard.  In Canada, I have to give the Green Party and its leader Elizabeth May a lot of credit for the hard work that has been put in trying to become recognized and legitimate in the minds of Canadian voters - but they have come a long ways from their start in the early 1980s.

When we look to the United States, I will say that there is an exceptional problem evolving in the form of overt voter suppression laws.  In a number of states, Voter Id laws, in conjunction with a series of amendments to laws related to the acquisition of appropriate identification documents have created an environment where a significant number of otherwise legal voters are unable to vote because they cannot acquire the appropriate documentation.  This is a very serious problem, and one which may require drastic action to correct.

Brand seems to think that revolution is near, if not imminent.  I am not so sure of that.  Protests such as Occupy have done more to make the general public more aware of what is happening behind closed doors.  I do not think that they have gotten anywhere near mobilizing the collective mass of population to take up arms in revolt.  As much as I have railed against the rise of Corporate Feudalism on this blog, I for one am not about to demand armed revolt either.  Protests on the streets have little impact on those whose power base is found in the boardrooms of our nations.

In Calgary, we got a lovely little taste of that when a video recording of a Real Estate Developer's conference session was leaked to the media.  Make no mistake about it, the people behind that organization, and the Manning Centre, don't give one whit about groups on the street.  It doesn't even enter their consciousness.  What got their attention was when in 2010, their candidate for Mayor - Ric McIvor - got roundly trounced by Naheed Nenshi.  They then spent the next couple of years trying to put together a counter-strategy to undermine a Mayor that apparently isn't sufficiently compliant to their wishes - to the extent of spending over $1 Million to "train" candidates through the Manning Centre.

While Brand might want "revolution", that is very short-sighted of him.  First of all, revolution will create more shadows in which undesirable power structures can evolve and seize power - and those powers can often be as bad or worse than what is to be overthrown.  We should not ignore that reality.  The best disinfectant for corruption is light, not more shadows.  Additionally, Brand's call for revolution overlooks the fact that a new power structure has emerged in the world that renders the nation-state impotent.  The multi-national corporation is able to supersede or subvert nation level laws.  This has been the case for decades, but it has only come to light as a significant political power since the late 1980s, as Neoliberal policies enabled economic "globalization" and corporations started moving work to countries where labour was cheap.

Do things need to be changed in the Western democracies?  Absolutely.  I think that the changes that are needed require people to see the would-be puppet masters for what they are, and then to take steps to undermine them.  At the level of the Nation-State, that can mean more rigorous accountability and legal structures which weaken the ability of the multi-national corporations to subvert the powers of national governments.  At a higher level, the world needs to develop a coherent legal / governmental structure that protects the citizens of all nations from the predations of multi-national power.  I do not believe that the world is ready for that yet though.  There are enormous cultural and logistical barriers yet to be overcome.  Structures like the EU to a certain extent reflect what I believe the long term direction will be, but they are far from a complete implementation which will successfully overcome the psychopathy of corporate interests.

The Problem Of Corporate Personhood

Over the last several years, we have seen a steady escalation of businesses asserting rights and privileges which are normally reserved for individuals.  A number of years ago, that extended into the realm of freedom of speech, and other areas where corporations are gradually asserting the same rights and freedoms as individual citizens as well.  

The most recent example of this popped up in the form of a company called "Hobby Lobby" making a big fuss about providing contraceptive access through its health care benefits.  What is interesting here is that Hobby Lobby is a sizeable company, and yet it is making this objection based on the company president's personal beliefs. 

I can appreciate that the owners of the company have specific beliefs that they hold very deeply.  However, when they are making decisions of this nature, they are effectively imposing their beliefs and morality on their employees who may or may not share the same set of beliefs.  While the sole proprietor of a company may make such decisions without affecting the rights and freedoms of others, this is not the case with Hobby Lobby.  Instead, what we have is the owners of the company claiming that their companies have the same rights as they do with respect to religious beliefs:

Hobby Lobby Stores Inc., Mardel Inc. and their owners, the Green family, argue for-profit businesses — not just religious groups — should be allowed to seek an exception if the law violates their religious beliefs. The owners approve of most forms of artificial birth control, but not those that prevent implantation of a fertilized egg — such as an IUD or the morning-after pill.

There's a problem here.  How can a business claim to have "religious beliefs"?  Last I checked, the people who run a business can worship as they see fit, but I cannot see for a minute how an abstract entity such as a business can be held to have such beliefs.  A company ultimately exists to transact business - no more, and no less than that.

While the ownership of a company may well set policies within the company which are in line with their personal beliefs, it is more than a bit of a reach to assert that the company itself has those personal beliefs.  It is an even greater reach to assert that a company has the right to assert that it is protected in holding such beliefs.

Today, another dimension of the Hobby Lobby story came to light:

Having heard this, and always wanting to be certain of what I write about, I just called the Marlboro hobby lobby and asked whether it would be stocking any Chanukah merchandise. I was told it would not. When I asked why, the answer - verbatim - was: 

"Because Mr. Green is the owner of the company, he's a Christian, and those are his values"
FYI, I would guess that, in a five mile radius around that Marlboro store, a solid one-third of all residents are Jewish. But, then again, what is the difference? Since the reason Hobby Lobby won't sell Chanukah goods is unrelated to how many Jews are in the area, it wouldn't matter if the percentage were higher or lower. 

The reason is that Mr. green's Christian "values" preclude him selling anything related to a Jewish holiday - not just Chanukah, but Passover too, based on the call I just made to corporate headquarters.

I have a great many Christian friends and acquaintances. And I can honestly say that I don't know even one who would ever see excluding Jews as having anything to do with Christian "values". But, evidently, Hobby Lobby owner David Green does.

While there could be a legitimate business reason for not stocking material related to a particular holiday, it seems interesting that the reason given here is Mr. Green's alleged "Christian values".  I think  that this tells us more about the motivations behind Hobby Lobby's demands in court.

At the end of the day, a Corporation is still a business.  Commercial transactions carried out in a business are quite apart from the religious convictions of the people who work in the context of a business.  For example, as an atheist, I might personally find it ridiculous to sell religious texts in a bookstore.  However, I have no right to refuse to sell those books as a member of the store's staff.

Similarly, though, the business has no right to insist that I purchase one of those texts for myself.  To do so would be a clear case of the business infringing upon my personal freedoms.  This applies whether we are talking about transactions in the context of the daily conduct of business with customers, or the business of hiring employees who work in the company's facilities.

Businesses exist within the broader context of society, but they are not active parts of society.  Rather, they are products of society themselves.  To grant them the same rights and privileges as individual citizens creates a serious problem.  Just as various "free trade" agreements have granted businesses the arbitrary right to sue a nation's government for acting in a manner which goes contrary to the company's perceived self-interest prevents a government from acting in the defence of its citizens, granting a business civil rights equivalent to those enjoyed by an individual citizen distorts the fabric of civil society.

When we allow businesses to become "full members of society", we create a situation which gives them a disproportionate say in the execution of government.  Likely to the detriment of individual citizens.

Corcoran Misses The Point On Income Disparity

On CBC's "The House" this weekend, I heard an interview with the Financial Post's Terrance Corcoran, in which he was basically poo-pooing the very real issue of the growing disparity between Canada's top earners and the rest of Canadians.  He made a comparison between a pensioner pulling in $20,000 a year and an executive making $190,000 and said "who cares?" - a statement which trivialized the entire discussion and leftA little digging this morning, and I find that he has more or less made the same points in one of his FP editorials.

If Canadians actually seriously look at the income data instead of following instant Occupy interpretation in much of the media they might end up feeling pretty good about income distribution in Canada.  The Canadians within the top 1% cover a wide cross-section of professions and occupations.  Almost 70% of the 1% have univeristy educations, as does 50% of the top 10% of income earners.

The lesson:  Getting the right higher education pays.

How generous of Mr. Corcoran to patronize us with the old saw about higher education.  Education is important, but it is far from the entirety of the story. I do note that he turns the knife with an extra twist by adding that it has to be "the right" higher education.  Presumably, like most of the far right in this country, Corcoran is among those who believe that the only degrees which matter are the so-called "useful" degrees:  Business, Engineering, and so on.  "Lesser degrees" like English, Philosophy and so on don't count.

That's not the Occupy idea, which is that inequality is a function of a corrupt 1% populated by system manipulating, fat-cat bankers, investment executives and Wall Street/Bay Street corporate gougers who are skimming massive bonuses out of semi-corrupt boards of directors ... 

Having sat close enough to the executive suite in my own career, watching a company grow from a modest size to being part of a frighteningly huge organization, I have seen first-hand the way that decisions get made.  A smaller organization's leadership is closer to the day to day business problems and is capable of responding to them appropriately - balancing both financial and human factors appropriately.  At a certain size, things become entirely abstract in the boardroom, and the business' leadership is dealing not with people and clients but all the executive sees are numbers.  People become numbers, salaries are numbers, and profits are numbers ... so are the bonuses.

When business starts looking at its people as "expenses", rather than as assets, things go seriously awry.  We are seeing this in the service industry today - companies like Wal-Mart, Loblaws, Sobey's are all cutting staff and wages to the point where getting service in their stores is next to impossible.  (The Sobey's near me has had seriously empty shelves in the produce area on Saturdays quite frequently, and their shelves are often half empty in the rest of the store)  There are explicit policies in companies like Wal-Mart which are designed to cap a worker's hours to limit the company's "wage expenses".

These are very real problems.  Worse, they are symptomatic of a malaise that reaches much further than the service industry jobs (which are often the entry level jobs for so many beginning their working careers).  In higher paying, professional companies, there are similar games going on which are designed at their core to tie the worker to the company and its fortunes.  I've written quite a lot on this subject on this blog under the label of Corporate Feudalism.  Make no mistake about it, the whole "outsourcing" game of sending jobs overseas where wages are cheaper and laws are more lax about how employees can be treated is another dimension of the same evil - and it's an approach to business that is similar, only it ends up affecting higher paid, professionals such as IT specialists.

What Mr. Corcoran, sitting comfortably in his high chair at the Financial Post is misconstruing about the "Occupy" movement and its offshoots (or unions come to that) is that they are really about the growing exploitation of the lower income earners by the top income earners.  It is about the sociopathy of large corporations and their boards which are so abstracted from the people that their decisions affect that they make increasingly abusive decisions.

Income disparity is a symptom of a problem, not the problem itself.

Think I'm Joking About Corporate Feudalism?

Perhaps you think that I'm being somewhat Pollyanna about the issue of corporate feudalism and its rise in both Canada and the US.

I'm not kidding.  This is possibly the most serious issue facing Canadian workers in the last 100 years.

Just as the Temporary Foreign Worker program has served to undermine Canadian workers by supplanting them with people willing to work for much less money, the Unpaid Internship undermines students, educational institutions and workers even further.

University student Samantha Bokma said she was surprised when her job with Tory MPP Rod Jackson ended suddenly in August — she had expected to stay on part-time as his constituency assistant as she had during the last school year 

It was a good front-line job for a political science major: answering phones and doing intake interviews with constituents looking for help. The 22-year-old said she helped write some of Jackson’s monthly newspaper articles. 

“But then they told me they weren’t going to renew my contract because they didn’t have enough in the budget,” said the fourth-year student at Laurentian University’s Barrie campus. She resigned the next day to start looking for new part-time work. 

So she was alarmed a week later to see an ad for what looked like her replacement — without pay. 

“The duties described in the posting are pretty much what I did for pay — answering phones, greeting constituents, preparing correspondence,” said Bokma, 22, who filed a complaint Tuesday with Ontario’s labor ministry, arguing it is illegal for an employer to replace a paid worker with an unpaid intern.

The argument has been made more than a few times that graduates from various educational institutions don't have the "skills" that businesses need.  Therefore, businesses have turned to "Internships" as a way for students to build directly relevant skills up before they graduate.  In my experience, the notion of an Internship (back in the day, we used to call them summer students) is a bad joke in terms of providing practical knowledge and skills.  Frankly, except in the rarest of cases, interns find themselves doing all of the tasks that the rest of the department can't stand doing.  In IT, managing the backups does nothing to develop critical skills.

More recently, we have seen the paid internship turn into the Unpaid Internship.  Same nonsense as before, except the student doesn't get compensated for their efforts.  The claim that companies make is that they have to spend all this money on training the intern, so why should the intern be paid?

It's simple, actually.  The business is training the intern for whatever specific tools they will be using to carry out their duties.  No employee should be held responsible for the training on specific tools.  This is ridiculous.  Ultimately, the unpaid internship model reflects the growing mentality in business that people are an expense rather than an asset.

The expectation that someone who has just graduated from a program has "immediately applicable" skills is farcical.  A university graduate is someone who knows how to learn.  Even in highly focused programs such as Engineering, new graduates have limited skills - they have knowledge and a framework within which to develop further skills.

When a business hires an employee, the employee is making a commitment to that employee to apply their skills and knowledge to that company's business objectives.  Pretty basic, and fairly obvious.  The company is responsible for providing appropriate training for any specific skills that they are demanding.

Ultimately, this is creating an environment where the "haves" in society will be wealthy enough to put themselves forward, and the "have-nots" will find their lot in life pushed further and further down.

[Update 14/9/13]
As if they couldn't sink any lower, a high end hotel is trying make a busboy job an unpaid internship:

http://o.canada.com/2013/09/13/fairmont-unpaid-busperson-vancouver/http://o.canada.com/2013/09/13/fairmont-unpaid-busperson-vancouver/

Seriously?  Bussing tables is a bottom floor job in restaurants.  The person who takes this job as an intern is going to learn what about the business?
[/Update]

Class Warfare - Harper Style

Harper's government has never been a friend of Canada's middle classes.  Recent changes to EI have served to be another plank in Harper's war on Canada's middle class.  Lurking in the midst of the Conservative party's twisted view of things is the assumption that people who are taking advantage of EI are engaging in fraud.

Investigators with the Integrity Services Branch were provided with a 23-page manual, dated October 2012, outlining investigative techniques intended to be used in a pilot project starting in November and winding up at the end of March. 

The document makes it clear the Service Canada employees are to leave no stone unturned in their inquiries, even in the absence of evidence that selected EI recipients had done anything wrong. The document suggests investigators check addresses, bank accounts, medical documents and even the physical appearance of claimants. 

The pilot project involves controversial home visits in which agents knock on the door of an EI claimant's home and ask for an interview on the spot, or deliver a letter to schedule a mandatory face-to-face meeting.

The supposition that underlies this is that EI claimants are inherently engaging in fraud to justify their claims.  While I am sure that there is a certain degree of fraud involved in a system like EI - not all people are going to be scrupulously honest in their dealings with the government, the nature of the government's program here is such that it creates an investigative program that presupposes that EI recipients are engaging in fraud.

Today, it became public knowledge that the person who leaked those documents has been suspended:

Therrien leaked documents to the media anonymously in the spring showing investigators were ordered to find $485,000 in savings each year by denying claims. 

The federal government denied that any quotas were in place, but the opposition hammered the Conservatives on the issue. 

"Telling investigators that they each had to find half a million in fraud presumes that there is widespread fraud, that they're all a bunch of cheaters and criminals," said NDP Leader Thomas Mulcair in the House of Commons in February.

But, look at this through a different lens for a moment.  Harper is running around making a social safety net program that assumes Canadians who use it are thieves.  Meanwhile, his government is doing precious little to catch up with wealthy Canadians who have tried to hide their money offshore in so-called tax havens.

This can only be seen as one thing - a class war being launched against Canadians by this government. Harper has been consistent in taking positions where the average Canadian comes out disadvantaged, and the wealthy end up with more.

Whether we are talking about the ever expanding ... and unmonitored ... Temporary Foreign Worker program, Mandatory Minimum Sentences, the seemingly non-existent pursuit of tax-evaders who have buried millions of tax dollars in offshore havens or, for that matter, the surprisingly rapid processing of Conrad Black's application to reside in Canada.

On the other side of the coin, it appears some people have started to pick up on what is happening, and are starting to organize in response.  I don't think that unions are the complete answer here - too much has changed since the need for unions emerged in the industrial revolution.  But they are a legal construct, and one that will end up serving a key role in the process that is coming where people will once again assert control over their government, taking it back from the concentration of power and wealth in the oligarchy.

Not Just Chilling ...

I've talked before about the rise of corporate feudalism.  As it emerged in the Middle Ages, Feudalism was not entirely a bad thing - it created an environment where there was a structure to protect each other from the predations of others.

Sadly, what is emerging in the world of Corporate Feudalism is less about mutual protection and sharing of resources than it is about control.  Control of wealth, control of information and because it takes people to use information, control of people.

So, when a company like Chevron moves to gain access to the e-mail accounts of activists who have been protesting the company's activities in Central America, it comes as no surprise.  Should you be scared?  Absolutely.  Consider that Chevron is a corporate entity, not an agency of the law itself.  Where (in theory) a law enforcement agency is bound to treat the information gathered in the course of an investigation with a degree of caution, Chevron is not bound by any such constraints.  Should they choose to, they can not only access this data, but release it in whatever form suits their purposes; or mine it for information patterns that can be used against individuals and entire groups.

If that isn't terrifying enough, consider that the information used can easily be used to infer where an individual is at any given moment in time.

No, this isn't just chilling - it is terrifying.  The implications are far reaching, as it places information about private individuals in the hands of those whose interest in that information is at best questionable. If you accept the notion that the rule of law stays the hand of an overreaching state (something that is becoming ever more questionable), then we must ask what stays the hand of a transnational corporation when it has access to this kind of information?

The timing of this is particularly troubling for Canadians who have recently learned that their government has been compiling lists of "enemies", and using that information in ways that are as yet unclear.  If, at the level of our ministers they are gathering "enemy lists" (how delightfully paranoid of them), one can imagine what is going on at other levels of the power structure.  The Harper Conservatives' CIMS database is known to have played a key role in the Robocalls Voter Suppression Fraud.  What is to stop them, or any other entity which accrues an enormous database of information on  people from using that information as a weapon against people?  

We have to recognize further that these kinds of rulings affect far more than citizens of the United States.  It affects citizens of countries who utilize the services of these American organizations.  It gives a corporation which is willing to impose its own notion of "the rule of law" (would this be "rule of corporate policy"?) on people who are not in any way affiliated with the corporation.  Perhaps equally evil is the prospect that if anyone who protests a corporations actions is even remotely affiliated with that corporation, they could find themselves fired for activities utterly unrelated to their work.  Consider working for a company that Chevron owns.  It may not be branded as a Chevron company, it may be operating as a wholly owned subsidiary.  An employee of that company could find themselves terminated for "acting against the interests of the company", not because they had taken actions against their direct employer, but rather because they chose to protest the actions of the company that owns their employer - a fact that they may not even have been aware of.  Consider, for a moment, in Canada, the Petro Canada brand is owned and operated by SunCor now.  That isn't apparent from the public branding of the stations, and I would suspect that a lot of employees who work at those stations are unaware of that relationship.

Freedom of speech is a legitimate right.  The question that we now have to start asking is whether we are willing to grant corporations the right to engage in surveillance - either in the present or retroactively.  In the absence of meaningful ways to stay the corporate hand's reach in today's world, I believe that we need to think very carefully before handing over information of any sort to these entities.  More importantly, there is a very real dialogue that must occur as to the extent of the rights and privileges accorded to these entities and how the structures to ensure that they do not overreach should be enacted.

Rising Corporate Feudalism - Policy Versus Law

The story of Carla Cheney has been making the rounds for the last week or so.  The short synopsis is that she was fired from WalMart in Ontario for calling the police about an animal left locked in a closed vehicle.  

Superficially, this is not a particularly big story - she apparently violated company policy regarding how she interacts with customers and got fired for it.  Companies are free to create policy that regulates the actions of their employees - this is neither new nor surprising.  What is interesting is the intersection between the company policy and civil law.

Here we have a situation where public education programs are very clear - if you see an animal in distress, call the police or animal services.  Period.  In Ontario summers, leaving an animal locked in a car is leaving the animal in distress - heat and humidity in a closed car is an evil combination.  No pet should ever be subjected to those conditions.  Even leaving windows partially open is highly debatable.

WalMart's policy guidelines stipulate that the employee should bring the issue to the attention of a manager and let the manager deal with it.  Superficially, this doesn't sound unreasonable.  Until you realize that a busy manager is going to prioritize an issue like that based on all the other topics they are dealing with at the same time.  Further, we don't know if the rest of corporate policy enables the manager to act in accordance with local law, or if the manager is explicitly or implicitly discouraged from engaging law enforcement in such situations.

What is interesting here is that the corporation has a policy which essentially appears to overlap with existing civil law.  Were I, as a private citizen, to make the same phone call that Ms. Cheney did, WalMart would be unable to do anything about it.  However, in the context of the situation, WalMart saw fit to terminate her employment for "violating company policy".  This creates a situation where in some very fundamental respects, the corporation has placed its own internal "laws" (policies) above those of the state.  Further, they have also exacted a surprisingly harsh penalty for violating those policies - certainly one that far exceeds the penalties which would be applied to the animal's owner, for example.

This creates precisely the environment which I have been critical of in other posts on this blog - namely one of corporate feudalism.  As long as you abide by the rules of the corporation, you can get away with just about anything you like - at the price of sacrificing personal ethics as well as potentially ignoring local laws.

The same issue had started to emerge in the 1990s in the form of "whistleblower" issues.  People who found themselves observing wrongdoing within the walls of a corporation had no avenue to safely call out those actions without being terminated.  This provoked an attempt to solve the problem in the form of "whistleblower" legislation in a number of jurisdictions, but ultimately has not been adequately resolved.  Employees within a corporation are still held to a code of silence when their corporation acts maliciously.  This is little different to the oath of fealty that a feudal lord would demand of his followers - it acts in many respects as a law above the law which limits the ability of the individual to challenge that which they see as wrong.  Corporate policy, especially in multi-national entities has become a law above the law - used as an instrument to limit individuals' ability to do the right thing for fear of serious economic consequences.

If calling the police because you see an animal in distress is an offence that gets you fired, one can imagine that were Ms. Cheney to be witness to more serious fraud within the company that she could be subject to severe sanction within the company should she take the story outside of the company.

While I can respect the fact that companies, like individuals, have a right to protect themselves from unjust and inappropriate accusations.  However, I do have a huge problem with corporations creating policies which essentially place them above local laws.  When those systems become such that the individuals within a corporation are threatened with consequences should they step outside of them, even when they have witnessed the violation of laws.

When such threats exist, implicitly or explicitly, we have a situation where one agency is acting in a manner that is explicitly hostile to the rule of law as currently understood and is in fact creating a second set of rules which not only binds the individuals involved, but subverts the purpose of civil and criminal law in the first place.  That binding is one more step in the creation of a feudalism which is hostile to the individual and their freedom.

On The Lac Megantic Disaster

I have refrained from commenting on the Lac Megantic disaster in part because I do not want to tread on the very real grieving of those who lost friends and family as a result of what happened there.  On a human level the entire situation is tragic.

However, after reading The Toronto Star's Exposé, I wanted to address it in the context of my previous posts (here, and here)  on the structure of our economy.

When he [Burkhardt] took over the Montreal, Maine & Atlantic Railway in 2003, he cut employee wages by 40 per cent according to a company history in the Bangor Daily News.

There were more layoffs and cuts in expenditures in 2006 and again in 2008.

The company also announced plans “to improve safety and efficiency” by cutting its locomotive crews in half, replacing two workers with a single employee.

That prompted at least one veteran engineer to quit the company in part over his fears for safety.

Jarod Briggs, who had worked on railways since 1998, told the Star he left MMA in 2007 because he thought leaving only one engineer in charge of a train — as happened in Lac-Mégantic — was too risky.

This is hardly the first time that I have seen and/or heard about this kind of blind cost-cutting in corporations.  I've said it before, and I'll repeat it again - Money has no moral or ethical framework.  Those who allow their business activities to be driven solely by money inevitably fall into the trap of forgetting that their businesses affect people, and are far more than just balance sheet numbers.

Burkhardt's whole approach to business seems to be very similar to the corporate vultures of the 1980s - sweep in, make massive changes and sell the company while the cash flow looks positive (and before the costs of the cuts made start to make themselves felt in other ways).

When restructuring a second tier banking organization, you can get away with this, and not really affect anyone except the staff you are firing.  Burkhardt's mistake is to apply that same kind of logic to a business where people die if something goes awry.

But, while Burkhardt might be the villain of the hour simply because his company just killed dozens of people in Lac Megantic, it is far more clear that we should look upon his practices as an example of the kind of corporate malfeasance that goes on every day in boardrooms around the world.  Burkhardt got caught out - although not for the first time.

It seems more and more clear that there is an enormous gap between corporate governance and the interests and needs of the people whose lives are directly or indirectly associated with them.  Lac Megantic is the unfortunate victim of that - and the fact that their scheme for only one engineer to oversee a train required Transport Canada approval merely underscores the problems that have developed as corporations have gained more influence over the governments.

Will Gen Y Separate Business From State?

This is a bit of a philosophical piece, considerably speculative in nature.

It has occurred to me in the last few weeks that we have a problem in the Western world that needs to be addressed - the notion of separating Business from the State.  

While history seldom repeats itself explicitly, it does repeat in varying degrees.  The process of separating church from state began with the Magna Carta's signing.  While the Magna Carta was about limiting the powers of the English monarchy, it inherently started the process of limiting the ability of the power structure in the ecclesiastic world from driving state policy.  At that point in time, senior clergy had very direct access to the monarch, and therefore, very direct influence on the direction of state.  It is, in fact, that reality which gave the Church such wonderful advantages as being property rich and tax exempt.  

Today, it seems to me that big business has achieved a place in the power structure of our governments that is similarly privileged to the Medieval Church.  As a case in point, we have the gutting of Canada's environmental laws and agencies, done by the Harper Government largely at the request of oil industry in a recent omnibus budget bill.  Further, the costs of government have been steadily downloaded from the largest income groups - the wealthy, large corporations, etc. - to the middle class.  

What has happened here is that over the course of the last half of the 20th Century, business has moved into very much the same place that used to be occupied by the clerics in the Middle Ages.  Instead of Bishops and the like sitting at the monarch's side, we have lobbyists paid by mega corporations to forward their legislative agendas; big money like the Koch brothers are well known to purchase influence through Political Action Committees (PACs), astroturfing organizations and other vehicles.  The net effect is that politicians no longer worry about whether they can gain the support of voters, but rather spend their time courting the support of the big money types that can afford to spend huge dollars buying votes with enormous advertising campaigns.   

The upshot?  Politicians no longer feel beholden to the voters, but rather spend the bulk of their attentions on the interests of the corporate big money interests that have their direct attention.

This is not necessarily new - the wealthy and powerful have always sought a place of privilege at the table of power.  In the past, this included the Christian Church.  Eventually, as the notion of secularism grew and the concept of religion as an individual freedom took hold, society moved collectively to separate government from the influence of specific religious movements.  (I will, for the moment, maintain the fiction that this is true in the US and Canada, although I do personally recognize the growing influence of religious extremism in the US on government)

What has changed is the alignment of interests.  As North America came out of the Great Depression, there was an alignment of objectives between the wealthy and the middle classes, reflected in FDR's "New Deal" economic program, and other parallel endeavours in other parts of the world.  Over the last thirty years or so, that alignment of interests and objectives has diverged significantly.  To the extent that government that is supposed to represent the interests of the people has ceased to do so on multiple levels.

In part, this is the consequence of the Baby Boom generation having gained power and lost sight of what power means; in part it is a reflection of the ever increasing concentration of wealth and power in the hands of a relatively small number of people who are becoming more and more wealthy, and have gained control over the levers of power with their wealth.  The political disengagement of the Gen X, Gen Y and Millenial generations comes as no big surprise - they are individually much smaller than the Boomers, and have been unable to influence the juggernaut that started with the rise of the neoCons in the early 1980s.

However, the combined size of these three generations, combined with the Baby Boom generation starting to retire (and ride off into the sunset) does change the available dynamics.  As these three generations become allies, it is my hope that collectively they will start the process of disconnecting the big money power brokers from the government, returning it to the people and their collective interests.

Air Canada Resurrects Indentured Servitude

Remember the notion of "indentured servitude"?  We haven't seen it used for a very long time.

But, that is the essence of what Air Canada has proposed as part of their training program for their "economy" airline rouge.

As part of an agreement, Rouge flight attendants are being asked to cover a portion of the training costs. They must commit to having $49 a month deducted from their gross wages for up to three years.

If they leave within 36 months of completing the training, they will required to pay back any remaining amount owed.

This smells a lot like an attempt on the part of Air Canada to create something that binds an employee to their job - indenture.

The fact it is being done through a payroll deduction program is even more offensive.  Instead of providing it as a loan which can be paid off at the employee's will, it exists as an obligation that is deducted from the employee's paycheque.  This creates a debtor relationship between the employee and their employer that is not appropriate.

On CBC this morning, I heard a business columnist arguing that this is Air Canada's attempt to make sure that employees have a commitment to their job and the associated training.  This sounds like the same kind of brain-damaged sophistry that justifies "open concept" office spaces by claiming that they promote collaboration.  The reality in both cases is far different - one is an excuse to be cheap, and the other is downloading the cost of employer-specific skills training to the employee while binding them to the job.

Whether this particular policy is strictly legal is not the point.  It is morally and ethically wrong in an era when we have long since left the bindings of servitude and slavery in the past.

I have suspected for quite some time that there is a corporate feudalism emerging, and Air Canada has executed another step in the process.  Unfortunately, Harper is unlikely to step in and do anything about this.