This is just a short article I wrote for the upcoming CLAC journal in the lead up to the May 1st anti-capitalist demonstrations. Hopefully it is as big as we all hope it will be…
The crisis comes home to roost
Those who have been a part of the unemployed have always been collateral damage in the war against the poor and working poor. The elite and their economists have set the standards of a ‘healthy’ economy, in which a 10% unemployment rate is necessary to ensure that working people never demand more, be it better wages or working conditions, for fear of losing their jobs. And yet, they never discuss the impacts of this structural policy on those who believe that their unemployment is a result of their own abilities rather than a systemic part of the functioning of the economy. Forced on poverty wages, and on social assistance, where people are forced to live on $527 a month. Not enough to pay the rent to the feed their children. This economic policy has created a structural and growing underclass, in Canada. The unemployment rate has always been around 7%, placing approximately 3.2 million people in poverty, including 634,000 children.
Since the 2008 crisis, something has drastically changed for workers and the unemployed. Namely, as the Canadian economy continues to grow, so too does the unemployment rate, the number of corporate bankruptcies, and plant closures. The basic equation that makes capitalism function and profits increase, the more people work, the more people buy things, the more things are made, and thus the more you profit, no longer holds true. In an era of global capitalism and finance capital, fictitious profits made from derivatives can inflate the growth of any economy. Since the real economy is no longer the major means of economic growth, GDP growth occurs during periods of increased unemployment, and increased debt.
Economist Jim Stanford argues that “the triumphalism of the federal government throughout the global crisis (which is still very much with us, as the IMF powerfully warned the other day) has become increasingly far-fetched, but the Harper government shows no shame in continuing to milk it for all it’s worth.”And in Canada, we are beginning to see austerity at all levels. From the public sector, to attacks on unions, to increased fees for education and healthcare, and amongst bosses. Since 2008 it has become a common understanding: if you do not accept our terms, of wage cuts, pension cuts, than people will lose their jobs. The major problem with this rhetoric is that the austerity is not caused by competition, or the crisis slowing consumption, or from stagnating profits. Instead, it is the result of companies shutting down and opening plants in the global south to expand their own operations. Further, the argument given to laid-off workers that companies need to ‘remain competitive’, is simply false. In fact, most companies that are closing their plants and laying off workers are making record profits by moving their manufacturing to the global south and further exploiting the new workers.
The effects of this can be seen in the decimation of the textile and garment industry in Montreal, which was the 3rd largest in North America, and was destroyed before the financial crisis of 2008. The Immigrant Workers centre in Montreal an organization that works with low-wage, non unionized workers fighting for justice against their basic labor rights began working with laid off textile and garment workers. In 2007, a laid-off Filipino textile worker named Sherman approached the Immigrant Workers Centre for support and advice. He felt he was owed something for being laid off from his job as a knitter at a factory named L’Amour- after 13 years of work. L’Amour was the largest sock producer in Canada and boasted that they produced almost 50% of sport socks sold in Canada, distributed to CCM, Wal-Mart, and Canadian Tire. Within a one year period, more than 500 (mainly) immigrant workers were laid off. They were victims, not of a drop in sales or production, but rather of greed and severe outsourcing. The manufacturing had gone to Bangladesh, China, and India. Further, there had also been a series of abuses in the workplace, reminiscent of the early twentieth century, when workers at a factory in New York City were burned to death because the employer had locked them in. As a result, the workers came together to voice their outrage, not only at feeling abandoned, but also at a deep sense of disempowerment, a feeling that after years of work, they had become too expensive to keep. This example was not a unique case, and we began to see that many of the L’Amour workers’ family members had been working in other factories which had also closed down during the same period.
This was not a unique case, but rather an example of the collapse of an industry in Montreal. In fact, over a fourteen year span, from 1994-2008 more than 90,000 workers had been laid off. Although these years saw a more concentrated numbers of layoffs, the trend truly began to take shape in the mid-1990s, following the signing of NAFTA. This problem was compounded by the Federal International Trade Tribunal’s 2004 decision to loosen regulations, following intense lobbying from garment companies. Far from making a protectionist argument, it is important to recognize that capitalist mind-frame of always seeking the cheapest and most vulnerable labor, at any cost.
As of February 2012, the official unemployment rate is at 8.4%, a figure that hides the real crisis in terms of the closures of plants and the real unemployment rate. Yet the real unemployment rate is far into the double digits if one looks at the employment rate. You begin to see the real unemployment rate “The part (employment )rate fell to 66.5% of the working age population. In Montreal this has become increasingly evident since 2008, as we have seen a sharp increase in the closures of factory and plants. Some of the worst hit were low wage immigrant workers. One instance in which we were able to turn a case into collective action, was with Cellulab, a company that repairs cell phones for Motorola and Samsung. The employer prided himself on hiring new immigrants, and had even received an award for doing so by the Quebec Ministry of Immigration and Cultural communities. During the Fall of the economic crisis, the workers, who were mostly from North Africa and Latin America, were paid regularly for three months, before the employer stopped paying them over the course of the next two months . The workers finally decided to contact a Union, and the day the Union tried to become accredited, the boss shut the factory down, and locked the workers out. Cellulab eventually declared bankruptcy, despite the fact that the company received money specifically from the Quebec government to hire new immigrants, and received bailout money from the Quebec government as part of the Charest government’s policy to keep companies afloat and pay wages during the economic crisis.
More recently, in the case of Aveo- a company that handles repairs for Air Canada- we see that in order to secure the assets and profits of the employers, the company seeked bankruptcy, leaving the workers in the dark, and forcing them to act! In another case, Ren-Wil, a company that handles décor for major hotels such as the Queen Elizabeth, and paid its mainly immigrant women workers low wages, cut approximately 60 jobs cut overnight with nothing more than a letter. One worker named Julia from the Caribbean, has become increasingly frustrated and angry. She asked: “what kind of government do we have which will leave poor people even poorer and only protect the rich?”
This anger is ever increasing as the rise of the unemployment rate has now officially reached 8.4%- and this only encompases those who are actively seeking work. Further, it takes almost 3 months to receive Unemployment Insurance, as opposed to one month, which highlights the increasing number of applicants. However for those already in precarious work, and have no access to EI benefits, making factory closures for them a permanent crisis. In Montreal-Nord, 40% of people live under the poverty line, and in the Meghrabi or North African Immigrant community unemployment has reached a level of 33%.
These layoffs, closures of manufacturing, and the move towards a service based or financial based economy, has shown the naked savagery of capitalism, according to the Financial Post:
“The latest report showed Canada’s top executives earned, on average, $8.4-million in 2010, including salary, bonuses, stock grants and options. That was up 27% from a year earlier. The average person, on the other hand, is actually earning less than during the 2008-09 recession, The report says those working minimum wage jobs on a full-time basis made an average of $19,798 in 2010.”
This same report notes that a CEO will make $44,366.00 in 3 hours, which would take a worker at minimum wage two years to make. Nonetheless, the excuse continues to be ‘competitiveness’. As is the case with Electrolux, a Swedish based company with a Montreal-area plant, that laid off 1,300 people in 2009. Or Caterpillar’s New Year’s Day announcement that its subsidiary Electro-Motive would be locking out 465 workers, and eventually close the plant entirely in response to the demands of the workers for decent wages and decent work. It could not be any clearer that the crisis is simply a tool to heighten an already permanent crisis for low wage workers and the poor. That this crisis has been the best tool for what could not be clearer to those struggling to survive is nothing but a class war.
In the economic system we live in, there will always be a continued attack on working and poor people, and that there will always be those forced to live in an undignified life unless there is resistance to greed and the system that enforces it. And we are beginning to see that resistance: when Aveo workers in Montreal block the roads to the airport, when laid off workers hold assemblies to demand severance, and dignity in the case of Ren-Wil, or L’amour, or Cellulab.
This is the kind of resistance which is at the the roots of MayDay, when the unemployed, low wage immigrant workers demand a decent living. This MayDay, like those who fought before us, we struggle for justice and for dignity for all those who are laid off, unemployed, and working for poverty wages, to build a movement that can bring an end to a system that is built on our backs and on our misery. This MayDay, lets make our Resistance the crisis of capitalism!