It sounds incredible that, for example, in this day and age of innumerable awe-inspiring scientific breakthroughs, no one has been able to figure out how to put adequate food on the table and a proper roof over the heads of every person living in this, said to be the richest and best country in the world.
Come to think of it, isn't it the role of the establishment to provide the best possible standard of living for its entire citizenry? Should they not be utilizing the local natural and human resources, combined with the latest technology on hand, and the most effective management methods required to attain this goal? If that's not the minimum one would expect in forming a community of communities, a.k.a. nationhood, than what is it? So what‘s holding us back? -- one might ask.
Regardless of their ideological standing, all levels of governments are always more than ready to please the private sector by cutting red tape, cutting social services and taxes, providing massive fiscal incentives and concessions, and hoping that in tum, the economy will get better. However, nothing seems to be working.
And now, in order to get answers to the aforementioned questions, let's scrutinize each of the formerly identified problem areas. Areas that affect every constituent of this country, such as the economic, education, energy, health care, housing, pollution, poverty, transit, the unemployment and underemployment crises.
The Economic Crisis
First, let's take a quick glance at the Canadian economy, and see what are the basic causes of its failure to perform to its full potential.
In this context, it must be stated that to no fault of its own, and for reasons rooted in its past, Canada as a country has never really had a chance to develop its own, independent, all inclusive, and well balanced economy. Due to the ensuing lack of proper managerial culture and experience to organize and operate an autonomous economy, it's no wonder that former and present leaders have been so enthusiastic to hand over the country's economic management to the internationals. In this way they could in effect disown any responsibility for the ultimate outcome.
But let's stop for a moment or two, and see what has been happening under the aegis of the so-called "technology transfer" program. Was it a strictly honest to goodness, humanitarian act to enable the underdeveloped parts of the world to catch up with the industrialized world — a kind of 'let them share our wealth undertaking‘ -- or were there some nefarious aspects to the deal?
Well, actually the latter puzzle was settled by Premier Wen Jiabao, in the course of a U.S. TV interview last year, when he was asked the question: "When will the Chinese government be ready to raise the artificially kept low value of the Renminbi, in order to level the playing field between the two countries?" In response, the Premier suggested that, "importers shouldn't be too greedy, after all his country's manufacturers sell cellphones at $4 each, that U.S. Consumers buy for $299.99."
Since there are many in high places who swear that this country's road to salvation is in further expanding trade, hence the next question is: How can Canadian companies compete with low wage paying countries? The honest answer is that they cannot. Simply because this country's employees hardly could pay a fraction of their bills when earning an average wage of $2 an hour. After all, even a year-in, year-out full time employment, paying a minimum hourly wage of $10.25 in Ontario, is not enough to cover the cost of living for a single person, let alone a family of four.
But, there are always some super-CEOs who believe that they are able to draw blood from granite. The latest example of this talent was demonstrated in a newspaper column by an executive who -- in his attempt to beat the 10:1 production cost advantage of foreign competitors -- suggested to automate the engineering process. Thereby, plausibly cutting 30% of the manufacturing cost. Admittedly, he is willing to do this, even at the cost of eliminating jobs. Although it's not clear how he is going to deal with the remaining sevenfold cost imbalance.
On the issue of cost of employment, this country's econo-political policy advisers would tremendously benefit from studying the findings of the late Henry Ford, the founder of Ford Motor Company, along with the cogent views of William Weisz, the former CEO and Chairman of Motorola Inc.
History books indicate that many decades ago, Henry Ford made an unprecedented discovery by recognizing and appreciating the fact that every employee has two basic, parallel roles to play in any economic system; being both a worker and a consumer.
As a practical thinker and employer, in 1914 Ford announced his famous profit sharing plan, and within one week raised the minimum wage in his factories from $1 per day to $5. In this way he enticed, and more importantly empowered his employees to purchase the products of their own making. Since the price of a car was at about $650, practically every employee within a year was able "own" a new vehicle and live better than ever before.
Building on Ford's theories, Weisz in 1986, at a management conference in Chicago, rebuked his fellow executives for focusing on cutting wages. "You fellows ignore the fact that, on the average, burden comes to 45%, materials about 44%, and direct labour cost generally amounts to only 11% of the manufacturing expenses. Therefore, it does not make sense to reduce wages, but strategically raising wages of low income earners does, with incalculable positive socio-econo-political results", concluded the highly regarded, then Motorola Chairman
Incidentally, in Ontario and Quebec, currently the average labour cost is just about 10% of the total manufacturing expenses; the automotive industry has a ca. 5% to 10% labour cost component. The fast-food industries‘ labour cost is said to be one of the highest of all, at about 20%.
More recently in the U.S., according to a documentary produced and televised by CBS, more and more corporate executives go undercover and seek out the views of their employees regarding the state of the economy. Upon returning to their offices, they formulate new corporate policies to counteract the effects of the current social-economic crises. On the whole, the employees say that these bosses not only listen, but are making important changes.
Meanwhile in Europe, more companies appear to adopt Henry Ford‘s profit sharing plans. And according to DW-TV Berlin reports, in 2011 already a number of firms have paid bonuses between 2,000 to 8,000 euros each, to their low level employees. Not mentioning the fact that in a handful of European countries, the minimum yearly paid vacation is four weeks by law, and employees receive 13 month salaries each year.
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