Raising the Minimum Wage: a Definite Win-Win

In spite of all its various attempts to revive the economy, the Establishment must soon realize that it is in a catch-22 situation, insofar as:

• On the one hand, the Canadian marketplace is severely handicapped by the extremely limited purchasing power meted out to the ever-increasing number of near and below poverty line wage recipients, and doled out to the unemployed and underemployed masses.
• On the other hand, governments cannot balance their own budgets, due to this country's rapidly shrinking tax base while simultaneously increasing need for all types of welfare services. One might also add that Finance Ministers – presumably looking for solutions to deal with the problem – appear to favor cutting vital services as opposed to finding ways to increase their respective revenues.

Since the socio-econo-fiscal and political establishment has demonstrated that it is no longer willing to listen to the sound judgment and proposals of the few and far between, out-of-the-box thinkers and problem solvers – clearly the only remaining potential source of scientifically proven solutions – now it's up to the public to decide what the future will hold. Will it be the acceptance of the status quo, represented by belt-tightening and increased sacrifices; or will it be an honest effort made through a series of non-dogmatic programs to rescue this province and country from the current impasse or implosion?

In view of the previously described depressive state of the economy, the government of Ontario, after a few years of hiatus, recently decided to increase the minimum wage from $10.25 per hour to $11 per hour, to the chagrin of opponents who consider this change as a blatant interference with the 'delicate' mechanism of the "free market" system.

Somehow, the proponents – in the course of demanding the reinstatement of the "minimum wage" legislation – were unaware of an important precedent. Namely, that a century ago, Henry Ford made an important discovery: the economy is not a "zero-sum game". He decided to raise his workers' minimum wage from a dollar a day to five dollars a day. The automaker's valiant act enabled his workers to accumulate enough cash to pay for a $650 "Model T" motorcar within a few months. And, they could even afford to own a home in just a matter of a few years.

Incidentally, Ford's decision was mostly based on his realization that every employee has two parallel social-economic functions. Each employee was not only a worker but also a consumer. Apparently, he understood that income and consumption go hand-in-hand, i.e. low-wage earners are always shut out of the marketplace.

Evidently, leading North American economists and their disciples seem to have been either unaware of this "basic law" of economics, or have decided to ignore it – for clearly political reasons.

Ardent defenders of the status quo argue that there is no textbook formula for establishing a minimum wage. Others suggest that there are no written, set principles for executive remuneration either. Amazingly, many corporations have been quite inventive through the years in finding ways to 'negotiate' astronomical salaries, bonuses and severance payments, even for their failing 'top' executives.

Be that as it may, by developing a few computer models, field experts should be able to recognize that raising the minimum wage from the current rate ($10.25 per hour in Ontario)  to 20%, 30%, or even more to achieve a reasonable living wage would produce highly beneficial results all around. Additionally, this could potentially restart the stagnant economy, as demonstrated by the example below:

THE Y3Z COMPANY

Consolidated Statement of Income

Product and Services Sold		$1,000,000	$1,011,210	$1,015,925
	Rate of Wage Increase	Current Rate	20%	30%
	Minimum Wage	$10.25/hr.	$12.30/hr.	$13.32/hr.
Cost of Operation
	Products Purchased	$600,000	$600,000	$600,000
	Rent	100,000	100,000	100,000
	Utilities	15,000	15,000	15,000
	Services	30,000	30,000	30,000
	Vehicle	35,000	35,000	35,000
Cost of Employment
	Wages
	Employee 1	$40,000	$40,800	$42,000
	Employee 2	30,000	30,600	31,500
	Employee 3	20,000	24,000	26,000
	Payroll Costs	13,500	14,310	14,925
	Miscellaneous Costs	$16,500	$16,500	$16,500
Total Costs		$900,000	$906,210	$910,925
Income		$100,000	$105,000	$105,000
Required rate to compensate for raising the minimum wage, either by increasing the volume of sales, or by raising prices		N/A	1.12%	1.59%
Rate of income benefits to employees, derived from raising the minimum wage		N/A	(Empl. 1) 2% (Empl. 2) 2% (Empl. 3) 20%	(Empl. 1) 5% (Empl. 2) 5% (Empl. 3) 30%
Rate of income benefit to owner derived from raising the minimum wage		N/A	5%	5%

Conclusion

The act of raising the current minimum wage does not pose any harm to anyone nor to anything. However, it clearly represents a timely opportunity to correct an age-old and unjust wage scale – rooted in the era and mentality of slavery.

And, if a new minimum wage were formulated properly, perhaps along the line shown above, it would become a win-win proposition in socio-econo-political terms to all. And yes, even business owners could profit from it.

PS: Naysayers are welcome to prove the aforementioned proposal wrong.

Public Notice: The Economy Is Not a "Zero-Sum" Game

In the wake of the endless transformation of the Ontario and Canadian Economy – a process which has been playing itself out over the past several decades – it might be necessary to review and offer improvement to the "modus operandi" of its "partners-in-management", namely:

• The Corporations, which are still operating in a nomadic mode. They continue being heavy-handed on downsizing, shutting down entire plants, warehouses and stores, fleeing the country, leaving behind devastation, cutting hours and wages, nixing social benefits for temporary employees, and unduly outsourcing jobs to low-wage-paying countries. Not surprisingly, these maneuvers have enabled many corporations, during the past 12 months, to hold onto and further increase their collective stockpile of "dead money" from $526 billion to nearly $0.6 trillion.
• The Federal Government, which remains seemingly detached. The government is willing to wait out the aftermath of this never-ending – what it amounts to – socio-econo-fiscal "transformation" process, no matter what. As if this hands-off style of governance does not cause enough damage, governments are still sticking to their "stay the course", "balanced budget commitments", "austerity", "left to fend", "spending lapse", "deferred maintenance", "do more with less", and "do-away-with regulations" policy dicta. All of this because, "now is the time for fiscal discipline" along with additional corporate "tax-reductions". As a result, just in 2012 alone, the feds reportedly amassed $13 billion in "discretionary" and "EI benefits" savings. Were we to add these savings to the mysterious flight of $3.1 billion, it's all but enough to balance the budget.
• The Bank of Canada, as a credit and currency regulator, is still sticking to its 1% prime interest rate policy – and toying with the idea of further reducing it – to encourage further borrowing, hoping to stimulate economic development. However, the downside of such a "top-down" strategy penalizes the 25% of taxpayers (i.e. RRSP/RIF and other annuity beneficiaries) who are losing billions of dollars worth of their purchasing power each year. This line of action has put the brake on much-needed "bottom-up" economic activities that could have been initiated if this "low prime interest" policy had not been implemented in the first place.
• The Ontario Government, recently retreated for its 10th Ontario Economic Summit (OES) – meeting on November 6, 2013 at Niagara-on-the-Lake for three days – to seek consensus as to how to "lead and shape" its economic agenda for the future. Julia Salzman – in her Public Policy Publication – a few weeks ago summed up the event as follows: "This year's summit played host to an impressive lineup of speakers including the Minister of Economic Development Dr. Eric Hoskins, the President and CEO of the Ontario Chamber Of Commerce Allan O' Dette, the President and CEO of MaRS Innovation Raphael Hofstein, and Premier Kathleen Wynne. These leaders, along with other industry visionaries, initiated insightful discussions (at the latest) OES theme of Convening for Success."

Potential Remedies to Resolve the Ongoing Crises

The OES, along with the many previous federal and provincial top-level conferences, have not yet been able to resolve this province's or country's socio-econo-fiscal crises. Therefore, it is worthwhile to list the myths and facts, along with their supporting evidence, in order too figure out what remedies could be applied to the "modus operandi" of each of the aforementioned "parties-in-management" of the economy, to obtain the desired results.

• The Corporations
• Myth: To remain competitive, corporations must reduce costs and move to wherever the road to the "highest return on investment" takes them, otherwise their shareholders will abandon them.
• Facts: Corporations and their stockholders, even according to "maximalist" standards, are doing very well. Since the year 2008 alone, corporations have accumulated $0.6 trillion of "dead money". So far they have yet to find a way to spend it.
• Evidence: Throughout the past three decades, corporations have imported practically all consumer products at between 1/10th to 1/75th of the price that Canadian sources could produce locally. (Therefore, it may be said that corporations have created a success story on the "supply side" economics and now need to work on how to resolve the issue of "diminishing demand", caused by the fact that about 50% of taxpaying consumers receive less than $30,000 gross yearly income.)
• Remedy: Establish a "Save the Economy" relief fund. This should be managed by a combined private and public consortium. The fund could be quietly built up by canvassing holders of the $0 .6 trillion of "dead money", with the aim of amassing $60 billion within the next 24 months (one might call it a "voluntary corporate tax" for the purpose of eliminating poverty and resurrecting the deathly economy). The objective of this "relief program" would be to issue monthly cheques of $2,000 payable to each of the about 1.25 million unemployed individuals in Canada, until they become full-time employees, or for a maximum of two years.
• Results: The entire economy would be gradually resurrected by the infusion of this allowance within just a few months, and subsequently the corporate bottom line would also experience a gain due to the "multiplier effect". Let alone that such a gesture would rebuild the public's confidence in the private enterprise system.
• The Federal Government
• Myths: During recessionary times, austerity measures are necessary to halt public sector deficit-based expenditures and to curb private, credit-based spending that could further jeopardize the country's econo-fiscal stability.
• Facts: By curbing public and private spending, consumption is reduced. Reduced consumption leads to cutbacks in production. Cutbacks in production, in turn, create a domino effect that causes further layoffs across the entire economy. Historical evidence suggests that there is no end to this downward spiral, as long as austerity remains in place. Only increased productive spending and consumption can lead us out of this econo-fiscal debacle.
• Evidence: Comparable examples – verified by independent experts – indicate that countries that were subjected to a lesser degree of austerity, or to no austerity measures at all, fared far better than those who were. Furthermore, even the most enthusiastic abettors of austerity are now backtracking on it. Instead, they either introduce a "proper minimum wage", or raise the existing ones, aimed at increasing the buying power of the low-wage earning masses. Proactive leaders of the latter countries also recognize that the advantages of exporting to other countries no longer exists, therefore they focus on producing for their respective domestic markets.
• Remedies: Targeted spending, and massive productive job-creation programs aimed at rebuilding the crumbling infrastructure. This would expand and modernize the public transit systems to ease traffic congestion. These activities – due to the resulting increased earnings and consumption – have the built-in capacity to resuscitate the ailing economy.
• Results: Balanced public-sector budgets and reduced expenditure due to: the lower demand on EI and welfare benefits; the increased tax base and tax revenue; and the diminished need to rely on private, risky, credit-based spending.
• The Bank of Canada
• Myth: Prime interest rate must be kept low to allow corporations and other businesses to access affordable credit.
• Facts: Corporations are saturated with unproductive cash. Private businesses do not need, or want, more loans, they are most likely in deep debt already due to slow consumer traffic. What is collectively needed is millions of customers who were long on cash. At the same time, the folks who have been diligently saving for their retirement years, are seeing their RRSP/RIF etc., being diminished or evaporated by many years of low prime interest rate policies.
• Evidence: A large segment of seniors are overwhelmed with bearing the costs, and being coerced to take responsibility for the debts of their insolvent offspring. A whole generation of young people – who after graduation are faced with tens of thousands of dollars of unpaid student loans and unable to find steady employment – are now adding an extra layer to the underprivileged class of this country.
• Remedy: A return to a standard currency and regulatory policy-making role, and the formulation and implementation of a mechanism to control real estate speculation, a traditionally causative factor in endangering this country's econo-fiscal stability for many decades.
• Results: Econo-fiscal stability.
• The Ontario Government
• Myths: Employers cannot afford to pay higher wages. Employers would be forced out of business and many jobs would be lost if the minimum, or living wage, let alone livable wages, were to be paid to employees (a frequently repeated, but never proven and unsupportable, self-defeating argument that needs to be publicly refuted).
• Facts: there is not enough purchasing power left in half of the employees' wages, who earn less than $30,000 gross annually, which is the reason for the cyclic economic stagnation, the rampant poverty, the unemployment, along with the high rate of youth underemployment. These are caused by corporations that withhold hundreds of billions of dollars from their employees' payrolls.
• Evidence: Henry Ford shattered the previously described myth a century ago, by demonstrating that the economy is not a "zero-sum" game. He decided – to the chagrin of his business advisors – to raise the minimum wage at all of his plants from one dollar a day to five dollars a day. The automaker's calculated decision enabled his employees to buy a Model T for $650 in under a year, and to even own their own home in just a few years. One might also add that Ford had actually proven that employees have two functions: they are not just workers, but also consumers, and low-wage earning employees are meager consumers. So, through his action, Ford ultimately revitalized the marketplace, and as a result, he contributed to a more just society.
• Remedy: Increase all annual wages of employees earning below $35,000 a year by 5% to 30% in a reversed order of the "income scale". (Refer to our blog article on this topic for full details).
• Results: Improvements due to a "multiplier" effect on consumption, and an expansionary feedback of 3.5% on the economy, along with gains in business and government revenues.

Is Labour an Underclass in a 'Classless' Society?

While not much is known as to what exactly went on at the 10th OES, and for that matter at the previous gatherings, the sessions were attended by typical Corporate and Government leaders to the exclusion of Labour representatives. This is unfortunate since Labour is the largest socio-econo-fiscal and political factor in the country. Hence, the 10th OES could not have been a true consensus, could it? This has become a very systemic problem. Perhaps a reminder of the fact that, in certain circles, the spirit of slavery is just waiting for its chance to return.

Message from the 10th OES

According to an independent analyst, there was a common thread running through the message given by the speakers, visionaries, and leaders at the OES. This message was, "Invent, innovate and export, or you will all be left behind" by the global economy.

Is Ontario and Canada Really Fit to Become an Exporter?

To provide a credible answer to this question, it is necessary to consider the following facts:

• 30 years ago we used to be a well-to-do, exporting country. All the provinces used to have their own multifaceted, nearly self-sufficient economies. However, after 30 years of intensive "technological transfer", a.k.a. dis-industrialization process, currently with a few exceptions – such as agricultural, forestry products, and minerals – this country totally, or some would say dangerously, relies on imports. And now, export is offered as the only option for our survival?
• No matter what, Canada as a whole has lost its entire industrial culture. It would take way more than a decade to rebuild it from the bottom up, at a prohibitive cost.
• Furthermore, how could the workforce of this country compete with their counter-parts that work for less than two dollars an hour and have no Social Security and no corporate tax system in place?
• Since about 60% of the workforce in Ontario and Canada regularly live on borrowed money, the question is: Are lenders – along with everyone else up the food chain– willing to devalue these debts? Otherwise, the entire country becomes bankrupt.

So, What Does the Future Hold?

No one seems to know, or at least no one is willing to talk about it. If the previously described scenarios were not disturbing enough, consider what a few futurists are suggesting as the reality for the vast majority of the public: By the year 2025 – just a mere decade from now – all jobs will disappear. Does this mean that everyone in Canada will be on the dole? And, where will the funding come from? From oil or LNG? (Clearly a series of all-inclusive, public consultations are imperative!)

Are There Some More Realistic Options?

Of course there are, but each of these options are antithetical to the prevailing, unmitigated free-market-based ideology, namely:

1. First, the economy could be restarted anytime simply by initiating a huge, well-planned public works program. We could rebuild the crumbling infrastructure of this country and modernize our age-old transit system, having it funded by the $20 billion EI budget. In fact, the Bank of Canada could even directly finance such a program, analogous to the financing of World War I and World War II.
2. The second option is a program that has the innate capacity to provide "full employment without any loss of income to everyone willing to work". (A validated, self-financing program, that is already in the hands of the government, but apparently due to ideological reasons, they are hesitant to act on it. In this context, one might ask the following legitimate questions: Do government officials have the right to refuse proven proposals that have the innate capacity to resolve the problem of unemployment? Isn't this a borderline case for malpractice?).
3. The third option is a much needed and highly cost effective "Affordable Housing Construction Plan". This plan could be financed by reverting funds From a $7 billion per year government program – that provides temporary shelter for between 30,000 and 200,000 homeless people across the land – and construct permanent homes.

Labour: Servants or Decision-Making Partners?

Several experienced researchers "in the know" – having spent decades on closely studying the various  socio -econo-political systems around the world – have found that in Denmark, France, Germany, Norway, Sweden, and Switzerland, public participation in the decision-making process to various degrees is constitutionally guaranteed by referendum and/or by other means.

Among these aforementioned countries, Germany's "Basic Law", enacted in 1949, is probably the most comprehensive and unprecedentedly democratic model. It not only protects Labour Rights, via the "Works Constitution" and the "Codetermination Law", but also renders Labour and Corporate participants as equal partners in the decision-making process.

Yet, on this side of the pond,  while we are in the midst of endless socio-econo-fiscal crises, only two entities are present at the table, namely Corporate Business (employers) and Government, with the latter acting more like a timid "aide-de-camp", rather than a decision maker vis-à-vis its "partner-in-management".

For all intents and purposes, even now in the 21st century, Labour is being considered by many to be like those servants who had served at gentry estates during the Dickensian era,

Why Do We Require a Codetermination Law?

Simply because only the enactment of a Codetermination Law has the innate capacity to:

• legally close the door on the era of slavery once and for all, and prevent the possibility of a facsimile system being reinstated, albeit gradually step-by-step.
• Render Labour/Employees – the largest socio-econo-fiscal and political factor – an equal partner with Business/Employers as decision-makers and thus empower the two to cooperatively pull our province and country out of its ever-deepening, economic quagmire. (After all, some might say that these days, the contrast between employees and employers can be measured by more of the latter group's financial standing than by anything else.)
• Convert Democracy into a meaningful, socio-econo-fiscal and political system; potentially under a Coalition System of Governance, wherein the views of every faction are proportionally represented, equitably considered and implemented, and the exploitation of Labour/employees is outlawed.

Summary

• Austerity has proven to be the wrong remedy for resolving the socio-econo-fiscal crises of our province and country; analogous to administrating a weight reduction diet for dangerously underweight individuals, and a weight inducing diet for overweight ones.
• Independent analysis of the "modus operandi" practiced by the current "partners-in-management" of the economy, indicates that they are clearly guided by faulty dogmatic assumptions, Serving a narrow, special interest as to what the purpose of the Ontario and Canadian economy is.
• Studying and adopting Henry Ford's proven theories Could prove to be beneficial to all, namely that:
• The economy is not a "zero-sum" game; and that
• Employees have two functions. They are not only workers, but also consumers. Therefore not paying a livable wages to all employees is a self-destructive socio-econo-fiscal and political strategy.
• It is time to convert democracy into an all-inclusive, meaningful, socio-econo-fiscal and political system by:
• Tabling and enacting a "Codetermination Law", thereby granting Labour/Employees a coequal status to participate in the process of managing the Economy; and
• Introducing a Coalition System of Governance that the Public Affairs of this province/country is managed for the benefits of the entire society equitably.

Must Reads for Every Socio-Econo-Fiscal and Political Officeholder

• "The Economic Problem", "Understanding Microeconomics", and "Understanding Macroeconomics", by Dr. Robert L Heilbroner, Professor
• For more information regarding the "Works Constitution" and "Codetermination Law",  refer to the European Foundation for the Improvement of Living and Working Conditions website or obtain a copy of "Facts about Germany", available from the Consulate of the Federal Republic of Germany in Toronto, Ontario.

Food for Thought

• "Europe's 'austerians' need a lesson in macro economics", by Christopher Ragan, Associate Professor of Economics at McGill University – The Globe and Mail, July 17, 2013.
• "What Canada Really Needs Are More Inquisitive Minds", by Todd Hirsch, Chief Economist and Author – The Globe and Mail, September 12, 2013.
• "The next time some business lobby bleats about a government policy that is anti-business, ask the speaker why business itself hasn't delivered despite very favourable government policies." by Jeffrey Simpson, Columnist – The Globe and Mail, January 10, 2014
• "How safe is your job?" by Chris Sorensen – Maclean's Magazine, January 13, 2014.
• "Our ways of democratic governance, invented long ago and resistant to change, do not seem up to the modern world's challenges. We need version 2.0", by Gordon Gibson, Columnist – The Globe and Mail, January 2, 2014.
• "Canada finished the Second World War with public debt equal to over 150 percent GDP … We should accept the growing international consensus that more public debt is helping the recovery, not hurting it. To paraphrase FDR, we have nothing to fear from debt – except an ideological fear of debt itself", by Jim Stanford, Economist with Unifor – The Globe and Mail, October 16, 2013.
• "In 2024, all homes will be 'dream' homes", by Rob Carrick, Columnist – The Globe and Mail, January 9, 2014.
• "A job should keep you out of poverty, not keep you in poverty", by Lambert Villaroel, Chef – Source: "Working for nothing: Canada joins global wage debate", by Tavia Grant, The Globe and Mail, January 27, 2014.
• "I have to decide if I'm going to pay for rent, hydro or buy food. It's not enough to take me out of poverty." by Amelia White, Earning minimum wage. – Source: "Ontario hike widens wage gap", by Adrian Morrow, The Globe and Mail, January 31, 2014.
• "It's time for Canadians to shift gears from managing homelessness to ending it." by Tim Richter, President of the Canadian Alliance to End Homelessness. – The Canadian Press, June 19, 2013.

List of Socio-Econo-Fiscal Articles

Recent Articles

• Misconstrued Problems Beget Misconstrued Solutions
• Election: A Democratic Right or an Exercise in Futility?
• Raising the Minimum Wage: a Definite Win-Win
• Public Notice: The Economy Is Not a "Zero-Sum" Game

Series - Solving Canada's Economic Crises

• Part 1 - Can We Revive The Canadian Economy?
• Part 2 -  Some Indicators on Canada's Socio-Economic Health
• Part 3 - Some Views on the Economy from Prominent Thinkers
• Part 4 - General Observations on Canada's Economic Performance
• Part 5 - A Brief Cause and Effect Analysis
• Part 6 - A Comprehensive Proposal for Economic Revival
• Part 7 - Rescuing the Canadian Economy
• Part 8 - Full Employment without Any Loss of Income is not a Pipe Dream
• Part 9 - The Key to a Thriving Economy: Eliminate Poverty
• Part 10 - Political Party-based vs. Social-based Government Systems
• Part 11 - A Review of Popular Current Economic Proposals
• Part 12 - Hope for Upcoming Graduates - The Cooperative Business Model
• Part 13 - Only Management, Labour and the Public Working Together Can Solve Our Country's Socio-Econo-Fiscal Crises
• Part 14 - Mr. Scrooge Can't Fix the Economy
• Part 15 - A Manifesto for Economic Recovery in Canada
• Part 16 - WANTED: An All Inclusive Economic Model
• Part 17 - A Case for a Democratic Socio-Econo-Political System
• Part 18 – The Austerity Program -- A Warning or a Social Experiment?

Part 18 – The Austerity Program -- A Warning or a Social Experiment?

One might wonder that when the entire country is impeded by multitudes of long neglected, debilitating, socio-econo-enviro-fiscal and infrastructure problems, should an austerity program pass as a policy of preference?

Especially since the establishment has been made repeatedly aware of a few, scientifically proven, realistic and socio-economically much more desirable choices.

In this context, and in the views of many in the know, it seems necessary to publicly seek and receive answers to the following random but rather important questions:

1. What is the real purpose of this misconstrued and discredited, if not ideologically motivated, austerity program?
• Is it to warn low-income earning elements of society, who cannot survive without a credit card, that its overuse has consequences and leads to tragic bankruptcy? By the way, what's the use of warning the victim?
• Is it to pressure the unemployed and the welfare recipients that, due to the ever shrinking tax base, they should no longer expect to rely on a taxpayer subsidized social safety net, but instead should become self-reliant?
• Is it a social experiment aimed at conditioning the public, and at the same time testing the limits of tolerance toward the rapid erosion of their standard of living, affecting about 50% of the workforce who earn less than $35,000 gross per year?
2. What is the point in granting over $10 billion of unwanted yearly endowments to corporate members of the $526 billion "dead money" club? Particularly, since New Agey, corporate proxies have already made it known to the public that the role of corporations is no longer job creation. Their primary role is to generate profits for their shareholders.
3. What is the point in spending $19.9 billion on E.I. benefits when there are more beneficial ways to invest in idling human resources for this allotment?
4. What had motivated the establishment to seek out and ratify FTAs (Free Trade Agreements), with 50 countries so far, and to join the World Trade Organization? Was it a political or economic decision? Let alone the question of which sector has been benefiting from these accords? Because, it's certainly not the skilled unemployed nor the underemployed college graduates!
5. Could anyone explain what the real advantages of globalization are? Despite the fact that:
• Importers acquire and pass on tens of millions of tons of low-cost merchandise yearly through the innumerable agents of commerce to consumers of this country without adding much, if any, measurable value in the process. Yet they gain unprecedentedly high profit margins during the course of every transaction.
• There is a lack of strict control that legitimizes the free flow of capital and monetary gains from one jurisdiction to another, with much of it reportedly ending up in various tax havens.
6. What is the point in the wholesale sell out of Canada's nonrenewable natural resources, especially oil, gas and water? Is anyone expecting some magical, technological breakthroughs to show up on the horizon that will replace these assets? Some serious thinking is required for the benefit of future generations!
7. When is the establishment going to realize that:
• True labor peace can only be achieved if all three sectors, namely government, business and employees, harmoniously work together in a partnership as co-equals? As demonstrated in quite a few advanced democratic countries around the world.
• As corporate accumulative earnings have reached $0.526 trillion, shouldn't employees' wages and benefits reflect such generous earnings? It certainly should!
8. When are members of all governments going to recognize that:
• In the course of parliamentary debates, adversarial demeanor is not conducive to resolving this country's debilitating problems equitably?
• In the presence of a majority government, the opposition parties' representatives may as well pack up and go home since they are rendered totally ineffective?
9. Why is it that, while some mature corporations can afford and are willing to pay $40/hour in wages and good benefits to skilled workers, others of similar caliber demand a 50% wage cut, (e.g. reducing wages from $26.75 to $13.35 per hour), just to remain in Canada?
10. Why aren't political party and civic leaders – in the course of election campaigns – required by law to formulate and publish their own comprehensive, itemized, timelined and costed programs for dealing with the country's critical problems? In the absence of such requirements, clearly the entire election campaign is meaningless.
11. Why do governments prefer to provide subsidized "rental housing" – albeit in very limited supply – as opposed to housing that is based on "rent to own homeownership"? Especially, since the latter choice would reduce the rate of poverty as well.
12. Why federal and provincial governments are so eager to provide grants to well established corporations, but refuse to underwrite forgivable loans for affordable, much needed residential/retirement housing construction pilot projects?
13. Why is the establishment – having demonstrated its inability to resolve the country's major problems – not resorting to some form of crowd sourcing? After all, does it really matter which sector succeeds in restoring the country's econo-fiscal soundness, as long as the results were to the satisfaction of all stakeholders? Apparently it does matter. Because, in the experience of independent experts, in the halls of the establishment, their counterparts would simply dismiss such a proposal by ruling that, "if it were feasible, someone would have already implemented it."
14. Why is the Bank of Canada holding down the primary lending rate? As a result, the purchasing power of all forms of savings is significantly reduced; thereby shortchanging retirees, and even the marketplace.
15. Why do corporations keep employees out of the decision-making process? Don't employees deserve to have a say – as in many countries they do – and beneficially participate in managing the companies?
16. Why do the leaders of the cooperative enterprise system sit on the fence and not expand their system to create new subdivisions, capitalized through the credit union concept, using the crowd financing principle? Thereby, proactively participating in a much needed job creation process.
17. Why are TV programs – under the aegis of promoting the innovative process – presenting a panel of bidding investors in a Roman circus-like setting, and verbally beating up, embarrassing, ridiculing, and occasionally even bringing their guest inventors to tears? Some might wonder if mockery is really the best method for encouraging innovation. Certainly, it doesn't help this country's efforts to reduce its invention deficit, which is not exactly a laughing matter. It seems that this promotional TV program needs a professional makeover, by featuring more serious contents and participants, under a more fitting title, such as, "Let's Make a Deal".

Summary

The public expectation is that by pondering over these questions, the establishment, and all the parties who have been responsible for the plight of this country, may realize that the time is right to blow off the dust and review those earlier submitted proficient proposals, and to implement them for the benefits of all segments of society, equitably.

Recommended Reading

•  The Buerger Alliance Blog Articles 1-17
• "Deepening the recession by dogmatically implementing austerity policies makes no economic sense whatsoever", Martin Shulze, Eauropean Parliament President, – The AP, March 14, 2013
• "Trade, Technology As Middle-Class Job Killers", by C Freeland – The Globe and Mail, February 15, 2013
• "Supercitizens' Threat to Democracy", by C Freeland – The Globe and Mail, March 1, 2013

Food for Thought

• "I would not exclude that we run the risk of seeing a social revolution", Jean Claude Juncker, P.M. of Luxembourg
• On Capitalism: "Capitalizm is in crisis and increasingly social cohesion will be the biggest challenge", Paul Polman, CEO of Unilever NV

Part 17 - A Case for a Democratic Socio-Econo-Political System

In the fifth year of the ever-deepening recession, independent, knowledgeable analysts and problem solvers have been questioning for years the direction that this country's economy is heading.

In the opinion of these professionals, the ongoing economic policies, guided by austerity, need to be urgently reexamined and corrected to reflect the following three recently publicized revelations:

1. Canadian Corporations have on hand a cash reserve to the tune of $526 billion, famously dubbed as "dead money". This amount happens to be the equivalent of one third of the annual GDP of this country.
   
   Reacting to the latter public disclosure, business policy advisers were quick to respond with their own brand of recommendations as to what to do with this newly found and unprecedented largess.
   
   Surprisingly, no one involved bothered to scrutinize the source of this over $0.5 trillion cash surplus. A cash surplus? Had anyone conducted a causal investigation, they would have found the source in the annual "income class" statistics, i.e. in 2008, over 50% of taxpayers in this country had an income of less than $30,000 gross. Translation: about 65% of the workforce of this country have been grossly underpaid and locked out from the marketplace, effectively causing an econo-fiscal-revenue implosion.
2. The role of entrepreneurs is no longer job-creation. Their role is to generate profits.
   
   This is an about-face to the several decades-old understanding between governments and the entrepreneurial class. An understanding whereby governments had a responsibility to create favourable conditions -- such as subsidies, grants, tax shelters, minimal or no regulations, etc. -- for entrepreneurs to run the economy and create jobs in the process. But, now this understanding is over and done with.
3. Collective agreements are no longer negotiated between unions/employee associations and employers to gain higher wages and benefits for workers. Instead, they minimize the degree of wage/benefit rollbacks and the avoidance of the two-tier wage-system.

However, in the midst of endless wage and benefit cuts, has anyone figured out just:

• How much savings the automotive industry can expect to gain from an e.g. 20% wage reduction? Considering the fact that labour costs represent between 5% to 7% of the manufacturing cost in the auto industry, the total savings will be about 1.0% to 1.4%.
• How, and to whom these wage-busting employers are going to be able to sell their products, by drastically reducing the purchasing power of their customer-base? Especially, if these cuts are going to be applied across the entire spectrum of the economy.
• How workers, as potential debtors/mortgagors will be able to pay off their debts to their respective creditors/mortgagees?

Just curious.

So, what happened? How did this country get here and why?

Well, some knowledgeable analysts recently summarized the explanation as follows:

• Corporations have been complaining for a few decades to successive governments that Canada is too small of a market to operate competitively and profitably. Not recognizing that many, much smaller countries in Europe have been successfully serving their own mini-economies;
• Governments were eager to oblige, and eventually negotiated and implemented ten FTAs (Free Trade Agreements) between 1994 and 2011, to widen the economic horizon, without noticeable advantage to the public;
• Corporations -- having recognized the on average 1:26 f.o.b. price advantages between the exporting countries and Canada, -- decided to participate in a series of government sponsored "technological transfer" programs. The result of these programs was -- as referred to by a former leading government official -- a "hollowing out” of the manufacturing sector of this country;
• Governments, -- since 2008, as a direct consequence of the devastating loss of hundreds of thousands of manufacturing jobs -- have been facing simultaneous challenges due to significant tax revenue loss, and a growing demand for E.I. and welfare benefits payments.
• Corporations, -- in spite of the recently disclosed mysterious "dead money" -- are still demanding tax reductions, less government interference, and further wage and benefits cuts, as a condition to remain in this country at all;
• Governments, -- in response to relentless corporate pressure to eliminate public deficits and debts -- are experimenting with the idea of reducing, and/or even eliminating, as many public services and social programs that the public will accept;
• The Bank of Canada, -- to facilitate this country's economic recovery -- keeps the prime interest rate artificially low to enable banks to provide low rate loans to their entrepreneurial clientele, in the hope that the latter will take out loans, expand their operations, and be ready for the next upswing of the business cycle.
• The entrepreneurial clientele is not taking the bait. If they are borrowing, it's because they are having difficulty paying their regular bills. In fact, what they really need is larger customer-base at a time when businesses are still reducing wages and laying off employees.
• Retirees, in the meantime, see their RIFs and savings, along with their buying power, losing billions of dollars in value yearly, due to the ongoing low interest rate policies of the central bank.

Observations

Since the inception of the March 2012 austerity program -- introduced by the feds to encourage public and private fiscal responsibility -- the economy is still quietly shedding tens of thousand of jobs monthly, even within the much touted IT industry, as well as in many segments of the service sector.

Meanwhile, some policy advisers insist that the arrival of an economic turnaround depends on how fast this country is becoming competitive, i.e. how soon workers are willing to work for poverty-line and below poverty-line wages.

By the way, has anyone noticed lately, that:

• China alone -- hardly utilizing 50% of its workforce -- is perfectly capable of satisfying all the current needs of the world's consumers?
• There is a huge demand on the global market, for Canadian products? If there is, then why are the international balance of trade figures of this country written in red ink?
• There is a disconnect between the unemployment rate, which is declining, and the actual number of unemployed, which is on the increase. This is because those who have run out of El benefits are no longer considered as being unemployed; they have opted out of the workforce.
• The devastating unemployment and deficit problems could be resolved in short order by applying the recommendations of The Buerger Alliance, detailed in Part 8 of this blog series?

So, is there a way out of this cataclysmic situation?

In the view of a few, exceptional, independent, multifaceted, practical thinkers and problem-solvers, there is a way to save this country from the current cataclysmic situation, by:

• Democratizing the 19th century, hierarchical style, decision-making process, across the socio-econo-political spectra, namely:
• In the political theatre, it would mean that instead of decisions being made by a government that is put into power by 26% or less of the voters, creating a coalition government that is elected by a plurality, or at least 67% of the voting public. In fact, the coalition governments of Austria, Denmark, France, Germany, Sweden and Switzerland were long noted for managing their respective citizens‘ affairs remarkably well, through many of these past decades. Moreover, many of these governments have been known to call on their citizenry to participate directly in some of the important decision-making process, via referendums.
• In the theatre of corporate economy, the process would be even further refined, inasmuch as a few employees, -- having been elected by their peers -- as board of directors would participate in managing the affairs of corporations along with their corporate counterparts. This would ensure that the interests of the employees are equitably taken into consideration in the course of the decision-making process.
• In the public theatre, the powerless unemployed and the poor need to be organized into one entity, -- potentially by the CLC or the CAW, -- in order to be represented, just like members of trades and professions, because people as individuals don't seem to count nowadays.
• Revising the wage scale for over 50% of the workforce, who, due to having been paid poverty line wages, have been shut out of the marketplace, and to all intents and purposes are unable to satisfy even their basic needs without getting deeply into debt. In many cases they are eventually being driven into bankruptcy. Clearly, this segment of society deserves to share 10% of the, not surprisingly, discovered $526 billion cache.

Importers across the board have had direct access to sources that can supply products at a 10 to 75 times cheaper price than local sources could produce the same. It's not surprising that such a favourable ratio could literally be the cause of the largess, especially if that practice has been combined with a "bare-minimum wage" and a "no-benefits" strategy.

So, some might conclude that the latter two factors could have readily caused the current economic dilemma, from which no one seems to be able to find a way out. Incidentally, The Buerger Alliance has developed and published many viable alternatives to these current policies that are clearly prolonging the endless standoff.

Summary

The Buerger Alliance is not surprised by the recent disclosure that Canadian corporations have a $0.5 trillion cash surplus. It’s quite plausibly the result of wealth taken from a growing segment of the population, low-wage earners and the unemployed, the direct casualties of the current austerity policies and unhealthy business practices.

This situation is the result of an economy starving dance between the government and corporations, reinforced by the Bank of Canada. Corporations want access to more markets, governments pave the way with Free-Trade Agreements. Corporations want to leverage out-sourcing, governments partner to accelerate the collapse of local manufacturing. Corporations cut jobs and benefits, governments lose critical tax revenue while paying more in EI and welfare benefits. Corporations press for reduction in costs, governments are forced to cut services and benefits to the public. The end result, a downward spiral that creates undue public suffering and pushes the entire economy further towards the cliff.

But there are solutions. They include direct participation in the decision-making process.

• In Government: Shifting to a model that represents a 67% plus plurality of the voters, even if it takes a Coalition Government format, combined with Referundum.
• In Business: Employee representation in the Board Room.
• In Public: Effective, equal representation giving voice to Low-Wage Earners and the Unemployed, just like members of trades and professions in society.

After all, these are the qualifying distinctions that make a Socio-Econo-Political system democratic.

Read More

• "Ayn Rand Nation, The Hidden Struggle for America's Soul" - Gary Weiss, 2012
• "Plutocrats, The Rise of the New Global Super Rich and the Fall of Everyone Else" - Chrystia Freeland, 2012

Food for thought

• On Job Creation: “Corporations are not employment agencies, and judging them by that metric is a mistake" -- Chrystia Freeland, Editor, Thomson Reuters Digital, The Globe and Mail, October 12, 2012
• On Growth: "The first priority, clearly is to get beyond the crisis, and restore growth, especially to end the scourge of unemployment" -- Christine Lagarde, IMF Chief, The Associated Press, October, 2012
• On Austerity: "Europe must realize austerity doesn't work" -- Reuters Breaking Views, The Globe and Mail, October 12, 2012
• On the Free-Trade Agreement: "If the goal was truly more and better trade, then the free-trade clearly hurt Canada more than it helped" -- Dr. Jim Stanford, economist, The Globe and Mail, October 8, 2012

Part 16 - WANTED: An All Inclusive Economic Model

Introduction

Just over a year ago, in our first blog titled, "Can We Revive the Canadian Economy?", we theorized that, "In the view of the dismal state of this country's affairs... one might infer that in spite of all its best efforts to revive the economy, the establishment must realize that is in a catch-22 situation, in so far as:

• On the one hand, the Canadian marketplace is severely handicapped by the extremely limited purchasing power meted out, to near or below poverty-line wage recipients, and doled out to the unemployed masses.
• On the other hand, governments cannot balance their respective budgets, due to this country's rapidly shrinking tax base, and the simultaneously increasing need for all types of welfare services.  One might also add that, Controllers and Treasurers -- looking for solution to deal with the problems -- appear to favour cutting vital services, as opposed to finding ways and means to increase their respective revenues."

A Year in Review

So what has changed over the past year?

• Literally all sectors of the economy, private and public, have been busy eliminating tens of thousands of jobs and management positions monthly.
• Many industries, previously proudly showcased as the jewels of the country, are either still being off-shored, on the chopping block, disintegrating, or vanishing altogether from the theatre of Canadian economy.
• Concurrently, the shrinking tax base is unable to keep up with the increasing demands placed on the social safety net, and is being dismantled, under the aegis of lack of affordability. 
• All in all, people are suffering tremendously and needlessly. Needlessly, because in spite of the potentially catastrophic situation, the ideologically bent establishment still turns a deaf year to realistic and scientifically proven proposals. Proposals that have the innate capacity to stop the downward economic trend and revive the economy.

But, Why Can't the Economy Recover?

There are a variety of contributors to explore:

• One reason is the fact that the economy has reached its saturation point and there is no incentive for further expansion.
• Another reason is that, throughout the years about 50% of consumers, that have an annual gross income of less than $30,000, have been steadily losing their purchasing power. As a result, the economy no longer requires as many workers to produce and deliver goods and services to the marketplace.
• Yet another reason is the ill advised entrepreneurial effort to reduce labour cost; not realizing that there is a direct correlation between the rate of wages and purchasing power.
• Let alone the fundamental reason, which is that the country's largest demographic group, labour/employees are totally excluded from the socio-econo-fiscal policy and decision-making process.
• On top of all of this, there is a deferential indifference in the public arena toward the economy.

So, What Should Be Done?

Several groups have struggled to address this question:

• Pro-establishment policy advisers, in response to this question, would adamantly insist that the economy is looking just fine and it should be left to its own devices to recover.
  To substantiate their claim, they would typically use an average statistical data, like the one that was published on July 17, 2012 in the "Folio, Net Worth" section of the Globe and Mail. This article indicated that, "the average Canadian household has $363,291 in net worth". The policy advisers hope that such answers will suffice. After all, the quoted amount of wealth should appear impressive to the casual observer.
• Independent analysts, however are not going to be impressed by the latter figure. They want to gain access to the entire spectrum of the "net worth folio". But such data is normally not available for the general public to scrutinize.
  Nevertheless, these no-axe-to-grind professionals know very well, that a percentile based "net worth" data set would reaffirm what their research, based on "income class" statistics has long revealed. Namely, that 50% of the active workforce, due to its limited purchasing power, is literally banned from the marketplace. Therefore, they suggest that it is time to seriously think about establishing an all-inclusive economic model, or face the possibility of an economic implosion.

In Search of a New Economic Model

For those who are resolutely committed to creating a new, all inclusive or socially responsible economic model, the concern is not about how to formulate such a model, but whether or not the subject is at all legitimate for public discussion.

So, in order to clear the decks, they intend to put the following question to this country's legal scholars: Is Canada democratically governed, or constitutionally ruled?

Are We Governed, or Ruled?

If Canada is democratically governed, then all segments of society – labour/employees, the unemployed, retirees, the disabled and other significant social groups, just like businesses/employers, professionals – should all equally have the right to form their own associations, to represent their respective members' interest directly, and to participate in the econo-political decision-making process as equal partners.

However, if labour/employees et al. – representing about 70% of society – are denied the right to form their respective association, then society cannot be considered free, and to all intents and purposes the excluded groups are discriminated against. And that, one would think, is patently illegal.

Competitive vs. Cooperative Model

Reviewing the history of business, it's difficult to understand why a century or so ago, presumably prudent leaders sitting at the helm of gigantic corporate empires, had not collectively decided to phase-out the competitive business model and phase-in a cooperative one. A model that is void of the combative "dog eat dog", "winner takes all", destructive conduct that has been responsible for innumerable catastrophic events… and even for international conflicts. As a result, who knows what's next in store?

An All-Inclusive Economic Model

To formulate an all-inclusive economic model, one might be tempted to look for inspiration from around the world, and synthesize such a model from some of the existing ones. In doing so, it might prove worthwhile to look at the examples of Switzerland's referendum system, Sweden's welfare arrangement, along with the socio-econo-fiscal policies of Singapore, Norway, Germany, France, Austria, and Australia. We could review this data to see how these countries have succeeded in creating an across-the-board, comfortable, and healthy standard of living for their respective citizenry.

Codetermination Difference

While remarkably, all the aforementioned countries have achieved their current, cut above, social economic status through rational and Democratic Ways and Means, some states have even to one degree or another, incorporated the principles of codetermination into their constitutions.

In essence, the Codetermination Law, as it has become known, has elevated these countries from a constitutionally ruled status to an all-inclusive and truly democratically governed one.

Mechanics of Reviving the Economy

In order to effectively revive the Canadian economy, the socio-econo-political establishment should:

• Abandon all of its costly efforts of competing on the global market, since by applying "2010 average hourly compensation costs in manufacturing" (aka labour costs) – as per US Bureau of Statistics – the odds are 35.67 to 1.36 against Canada.
• Formulate and implement a Codetermination Law. This law would guarantee the rights of all segments of society – including labour/employees, retirees, the unemployed, the disabled, and significant others – to become active participants in the econo-political decision-making process of this country.
• Phase-out the current economic model, which is based on competition, and phase-in a cooperative one, starting on the home front and then making a case for its international acceptance at the UN. Especially, since it is common knowledge that competition fosters domination, exploitation, destruction ... And all around waste. In contrast, cooperation delivers mutually acceptable and equitable results at a high degree of efficiency, through planning and division of labour.
• Concentrate on economic self-sufficiency, geared to the full use of the natural and human resources of this country, while keeping environmental protection always at the forefront – at least until the age-old "divide and conquer" system is replaced with a "divide and cooperate" policy.
• Diversify the economy to its fullest extent.
• Seek out markets for our surplus raw, semi-finished and finished products. This should be an organized carefully calibrated activity, but only as a sideline to the points above.
• Eliminate poverty and unemployment by:
• Applying the power of volunteerism to make home ownership affordable for the masses. Furthermore, this method could also yield many on-site job training and job creation opportunities.
• Putting EI funds into productive use by creating meaningful public or private contractual job creation programs.
• Increase the pay rate of low-wage earners by 30% to 5% across six lowest income classes to a maximum of $35,000 gross annual income. This measure alone, has the capacity to expand the economy and generate about 500,000 jobs within one year, without a significant change in the inflation rate.
• Introduce our scientifically proven plan for creating "full employment without any loss of income".
• Reject and renegotiate unfair trade agreements that interfere with codetermination principles and self-determination rights.

But, What If This Country Is Constitutionally Ruled?

If the legal scholars find that Canada is constitutionally ruled, then of course laborers/employees, the unemployed, the retirees, the disabled, and other significant social groups have no direct decision-making power to speak of.

That is to say that, about 70% of the public should just submit to whatever the ruling class decides for them; which may or may not include a gradual return to an era of slavery.

Summary

The "a year in review" section above clearly reinforces the initial findings of The Buerger Alliance, namely that the establishment is still in a catch-22 situation. And, the ongoing austerity program does not appear to have helped either.

However, the situation could easily be turned around and remedied by adapting an all-inclusive economic model, and by applying the principles of  the "codetermination and cooperative management model", aided by a host of mechanics to revive the economy, defined in detail through the articles published on our blog at buergeralliance.blogspot.com.

Read More

• Eric Reguly's article "Legends of Sleepy Hollow" – Report on Business, The Globe and Mail, July 2012. 
• Derek DeCloet's article "Clear the Track" – Report on Business, The Globe and Mail, July/August 2012.
• "The Unfair Trade: How our Broken Financial System Destroys the Middle Class", by M.J. Casey.
• "Power Inc." by Dave Rothkopf

Food for Thought

• On Free Trade: "The potential for abuse of the system is enormous" – Anthony Fell, Pres. of Dominion Securities Inc. 1987 – Report on Business, The Globe and Mail, July/August, 2012.
• On the US - Canada Free Trade Agreement: "This deal may be quite beneficial to business, especially to multinational corporations. But greater returns to business might not necessarily be in the best interest of the country." – Frank Stronach, Chairman, Magna International Inc. – RoB, The Globe and Mail, July/August 2012.
• On the Issue of Who Creates Jobs: "Customers create jobs. Middle-class customers with proper purchasing power" – Nick Hanaver, US Venture Capitalist – Fareed Zakaria, GPS, CNN, July 8, 2012.
• On the Subject of Tax Evasion: "Wealthy individuals may have been hiding as much as US$32 trillion offshore", according to Tax Justice Network, a UK-based organization – AFP/ Report on Business, The Globe and Mail, July 24, 2012.
• On the Topic of Recession: "Increase consumer purchasing power and the recession is over", Bill Moyers, Broadcaster - Aid to former US President, Lyndon Johnston.  – Public TV KCTS9, August 5, 2012.

Part 15: A Manifesto for Economic Recovery in Canada

There are a couple of conflicting theories, not counting the radical ones, floating amongst the experts, as to how to restart this country‘s economy -- which has been hard hit by the last three years of recession -- that is on a very slippery slope.

Nevertheless, the official verdict is that Canada is on the right track. Apparently the austerity program is working and it should stay in place until the country purges itself of all its deficit and debt-loads.

Strangely enough, no one appears to be concerned much about the plight of over 1.5 million registered and unregistered unemployed in this country. This significant demographic should be working, receiving a "living wage", paying their bills, and normally would even be paying taxes. But, the policy-enforcers don't seem to be bothered by creating major collateral damage; they just soldier on and keep cutting many indispensable budgetary items. Slashing 5% here, and 10% or more elsewhere, in order to make up for the self-induced revenue shortage, regardless of the consequences.

Meanwhile, out in the real world -- under the auspices of The Buerger Alliance -- a group of experienced, independent, out-of-the-box thinkers and problem-solvers have taken every measure to convey their message to the establishment.  This message is namely this: "There are much more humane, effective and painless ways to solve our country's socio-econo­-fiscal problems."

We're wondering, what exactly does it take to get auditioned?

Observations

At this juncture, in order to break the current deadlock and produce a realistic economic policy that would benefit all the stakeholders, the establishment must take action. They need to apply the "levers" of  Near-Full-Employment, Living Wage, Increased Tax Revenue, and a Productive Expenditure. Then, and only then, will it become possible to effectively and expeditiously deal with the Debt/Deficit, Economic, Education, Energy, Environment, Healthcare, Housing, Infrastructure, Poverty, Transit and the Unemployment Crises.

As to the questions of who has the capacity to extract this country from the worst recession since the 1920s, the answer is, Employers, Employees, and Government, conceivably working together as equal partners. Incidentally, it's difficult to fathom how a meaningful, expeditious and permanent economic recovery could ever occur without such a prerequisite.

Taking the latter observation one step further, one might even infer that, generally speaking, the establishment appears to view the citizenry and employees as subordinates chattels, rather than equal partners. What's needed is a system where the objective is to work together in unison, toward a better tomorrow for one and all.

Recommendations

In the interest of creating a favourable and collaborative environment for an effective and expeditious economic recovery, and subsequently resolving this country's numerous Socio-Eoono-Fiscal Problems, The Buerger Alliance puts forward the following recommendations:

1. All Employers, private and corporate, must urgently recognize that,
• Employees have an innate, parallel role to play in the economy, inasmuch as they are not only workers but also consumers in the same person; and that
• Low-paid Employees have very limited purchasing power at their disposal and therefore cannot become full participants in the marketplace.
  Furthermore, realistically speaking, a combination of Minimalist Wage and Benefits Policies:
• Do not really serve anyone, not even the investor class, "we all work for"; and
• Should be considered as the primary causes of the current crises, manifested by high Unemployment, Stagnant Economy, Private and Public Debts/Deficits.
• A Reasonably Well-Paid Workforce -- in its collective role as Consumers - on the other hand, is enabled to fully participate in the marketplace to satisfy its personal needs, without resorting to public assistance, or being overtaken by unmanageable personal debt.
  But like it or not, in both of the latter instances, the unsettled debts are absorbed by the public, either at the cash register or through taxes, or very often both.
• All Costs incurred in the process of the Production and Distribution of Goods, and for Providing Services, is paid directly or indirectly by no one else, once again, other than society as consumers;
• An across the board Pay-Rate Increase of 30% to 5% for Low­-Wage earning Employees with incomes of up to $35,000 per annum (i.e. 55.3% of the total taxpayers), would create a 3.4% economic expansion rate, generating over 500,000 new employment opportunities in Canada, described in our article "Mr. Scrooge Can't Fix the Economy"
2. Governments, in lieu of their Regressive Austerity Program, should:
• Partner with Employers and Employees, and participate in the overall planning of the economy, to maximize the utilization and efficiency rates of our human and natural resources. This needs to be done equitably and with the ultimate objective of revitalizing the economy and eliminating poverty and unemployment in the process;
• Revise the Corporate Taxation Policy by linking the tax rate of each corporation to the performance rate of it's respective efforts to revive the economy and in dealing with the unemployment and poverty crises;
• Reallocate 25% - 50% of the $20 billion Employment Insurance Budget toward funding a series of provincial job-creation programs. Do this by offering a $5,000 to $10,000 tax credit, as an incentive to employers for each additional employee they hire, for a minimum of one year period. Full details in "A Comprehensive Proposal for Economic Revival"
• Reduce the Working Hours, aimed at literally eliminating unemployment, without any loss in personal income. Full details in "Full Employment Without Any Loss of Income is not a Pipe Dream"
• Establish a series of Volunteer Corps Programs. These programs have the built-in capacity to effectively assist with specific issues like; the lack of affordable housing; the plight of the innumerable unemployable school dropouts -- who need training -- and the problem of high poverty rates in every province across this country. (See Option 3 in our article on "Rescuing the Canadian Economy")
3. The Bank of Canada should urgently reconsider and modify its Low Prime Interest Rate Policy. Clearly, this policy destroys the value of RSPs and RIFs, which provide financial security for millions, and discourages certain forms of savings. A possible remedy would be to set up two categories of Prime Rates:
1. One category for business/personal loans and mortgages at a low rate; and
2. The other perhaps 3% higher than the first one, for RSP investors and RIF annuitants.

In Conclusion

Throughout the previous six months, our group has posted 14 articles, and revealed many techniques to effectively, expeditiously and painlessly resolve this country's socio-econo­-fiscal problems.  However, judging from the responses, one might wonder if the establishment is aware of or truly concerned about, where its regressive policies are leading.

It‘s no secret that the austerity program is not working. For sure, hollowing out the country's natural resources and selling them as unprocessed raw material is not going to provide sufficient revenue to cover the cost of even sustaining the already dismal and unacceptable status quo, let alone the need for restoring some level of normalcy.

Other efforts, like offering indiscriminate corporate tax-reductions for setting up shop here in return, have proven to produce negative results in Canada, between the years of 1950 and 1995. (See our chart in the "Corporate Tax Rate Reduction vs. Unemployment Rate" section of our article on "Some Indicators on Canada's Socio-Economic Health")

Then there is this often repeated credo, that this country‘s economic success depends on Canadians' ability to compete with low-wage-paying enterprises the world around. Or that the average person on either side receives huge benefits from such exchange. However, if one considers the shoddy quality of the merchandise we receive in return, added to the horrendous waste problem that the whole world is engulfed in, then the entire dogma becomes a nightmare.

But to begin with, is it realistic to engage in a lifelong, non-stop, marathon style competition, as a condition to gain economic success? Especially since, in competition there is only one winner, and the rest are literally losers! How about applying the principle of coexistence, based on cooperation and division of labour? In this latter model, there are no losers, no animosity, no waste, but with realistic planning, the chances are that full employment, with good pay doesn't appear to be out of reach for all countries' citizenry.

In contrast, the current practice in Canada, manifested by trying to rely on a single tier industry and expect that it will endlessly support this country's economy, is extremely risky and harmful. The reality is that there is no substitute for implementing a well planned industrial diversification program. This mitigates the impact on the entire economy, in the event that the output of a single industry should reach the saturation point of its market.

While more and more are ready to chastise the millions of low-income people for getting into debt, not many seem to question the practice of paying wages that are grossly inadequate.  Wages that do not even cover the basic costs of living, in supposedly the best country in the world.

Finally, witnessing the recently increased and accelerated efforts to "cut and slash" wages and social benefits -- even by as much as 50% and eliminating all benefits, in order to make this country internationally more competitive -- one might wonder how far the establishment is willing to go down the path of recreating a Dickensian era, as opposed to utilizing well-tested, productive techniques to rebuild the economy?

Quote of the day

• On the question of how to revive the economy: "We need a growth rate of 5% and we got to get the jobs back-" -- Jack Welch, former CEO and Chairman of General Electric Co., in an interview with Piers Morgan of CNN, on January 9, 2012.

Read More:

• "Pawns to a big CAT" - The Toronto Star, IN4, January 28, 2012