Throne Speech: Jobs Rhetoric, Not Job Creation

Perhaps the government’s new mantra for the budget and the throne speech is telling in its ordering. First priority is low tax, and then if jobs and growth also happen, well that’s a happy coincidence.

It was interesting to hear the throne speech acknowledging that government spending like that in the stimulus program can create jobs and drive growth. That is to say that the Harper government knows how to create jobs and a reliable way to do that is to hire Canadians to build infrastructure.

For a government that repeats “jobs” so much, it is hard to miss the fact that there was no mention of unemployment in the throne speech. For most Canadians, declining unemployment IS the measure of job creation. But presumably it is not for this government. Perhaps the shaky link between low corporate taxes and job creation is good enough…the facts be damned.

The facts are that demand for goods & services drives job creation, not tax cuts. So while corporation are happy to take the money, they are simply saving it and will continue to do so in an uncertain economic environment. Low taxes themselves are not going to create jobs at this point, government spending is.

It bears repeating that despite the Harper government’s recognition that stimulus works, unemployment remains near 8% far above the 6% that it was before the 2008 crisis began. The jobs that have come back are part time, not full time as before the recession. While Harper admits that government spending can and does create jobs, clearly jobs are no longer the priority. The “economic action plan” has now become a “deficit reduction plan” irrespective of job creation. High unemployment was a good reason for government intervention in 2008 under Harper, however the same prescription for today’s high unemployment is somehow not relevant.

In fact, the changing nature of the stimulus plan from job creation to balanced books was further reinforced with the firm commitment to balance the books one year early. The likely means will be through the cutting of 80,000 positions in the public service over the next 4 years, about half of which will have to come through layoffs. The fact that there are no particularly good reasons for balancing the books one year early is beside the point. The throne speech trots out the specter of high debt levels of “other nations”. Presumably, Canadians are to assume that job losses are worth it otherwise we’ll end up like Ireland or Iceland in that extra year. The fact remains that Canada has the lowest debt burden in the G8 by a long shot.

The throne speech reveals that the Harper government knows what Canadians want to see, action to create jobs and economic growth and so repeats that message. It also reveals that the government knows how to make it happen, through government spending. However, the government has no intention of taking any action despite high unemployment. In fact, job destruction through public service cuts will likely be the order of the day.

So while jobs are the rhetoric, taking practical and proven steps to job creation is a distant second to low corporate taxes and reduced public services. Welcome to the next four years.

5 comments

  1. Thanks David. I thoroughly enjoyed this highly informative post.

    One critical element of the job creation rhetoric that seems to be getting lost in translation is the decline in the QUALITY of employment. Too often, the government will tout baseline job creation numbers to drive home the effectiveness of their economic policy agenda. But fact is, the jobs that are being created are overwhelmingly part-time, contract and/or temporary positions that do not offer sufficient job security or benefits to stimulate significant economic activity. If someone gets employed, but only at 20 hours a week for marginal wages, they are in no better financial position to generate economic growth than they are on Employment Insurance. In fact, they are likely worse off.

    Case in point: in my home province of BC, full-time employment as a proportion of total provincial employment has fallen nearly 2% since the start of the recession and all of the job creation taking place in the province since the start of 2011 has been attributable to gains in part-time work. No increase in quality, full-time employment to speak of for the past 5 months. I think this reality has to become part of the broader lexicon of progressive discussions on economic policy. Because it is fine and dandy to create jobs, but if the private sector is only creating menial opportunities that aren’t adequate to support an acceptable quality of life, then our economy on the whole will pay the price.

    I’m left pessimistically wondering whether the private sector has used the recession as an excuse to lower the quality of employment they are “able” to provide. “Don’t blame us, it’s not our fault we can’t pay a living wage or offer full-time positions, the economy is slumping.” It has been nothing but a cynical attempt to re-direct attention away from the profit-gouging tycoons who haven’t suffered at all, but are actually better off now that they have lowered overhead by cutting back on human resources costs. Jobs are being grouped and rolled in to one another (i.e. getting 1 person to do the work for what used to be done by 2 staff, or worse yet, 3), and what were formerly full-time permanent positions are transforming into temporary part-time. This is by no means sustainable, and I think it is a trend that needs more exposure. We need to encourage people to dig deeper beyond the rhetoric so when they hear “the economy created XXX thousand jobs last month,” they will know to take it with a grain of salt. Because not all job creation is good job creation.

    Thanks again.

  2. Where does the estimated 80,000 jobs to be cut in the federal public service come from David?
    This is a great post.

  3. Ryan, thanks for the comment. You’re absolutely right on the quality of the jobs that have returned, the are more likely to be part time. You make an important point that having a part time job may well make you less secure than if you were receiving EI.

    There is no doubt that when the federal government says “low tax environment” they don’t mean for middle class Canadians, they mean for wealthier Canadians and corporations.

  4. I also have to wonder:
    *with 10s of thousands of us un- employed
    *with 100s of thousands of us under-employed
    Why does our government continue to promote and facilitate 1/4 million new immigrants each year?
    *many of whom (anecdotally since the census data is no longer valid) are themselves un- and under-employed
    *and who (in these kinds of high annual numbers) serve mainly to further depress wages by increasing the labour supply pool.
    Why can’t the CRAP (Conservative Reform Alliance Party) government synchronize its immigration and employment/training policies and expenditures?
    Could it be they have a hidden agenda which is intended to benefit others than “average Canadian families”?

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