My little Toronto Star moment

I have to admit that reading the Toronto Star is a little guilty pleasure. I mean at least you know exactly where they are coming from. Except that whole Chantal Hebert thing.

Anyway, I had just finished reading an article about the perils of outsourcing to India. The article eloquently talks about the loss of CGI jobs (programmers) to India and the gain of hair stylists in our biggest city. As I almost always do when I read this type of Lou-Dobbsification, I was about to put it out of my mind. But I flipped on the radio and heard that GM was closing its distribution centre in Moncton and Home Depot was opening up its next big box store in Fredericton.

And I went into a bit of a brain freeze. You see in the aggregate, I think that outsourcing/offshoring, etc. is a normal progression of economic matters in a globalized world. Labour and capital move around freely and the rich countries get richer. Remember NAFTA? The unions said that manufacturing would move to Mexico and the US economy would be crushed. Well, low end manufacturing did move to Mexico and the US boomed. Don’t get me wrong, there were serious community-level paid, but in the aggregate, the US benefitted from NAFTA in ways no one ever dreamed of.

So my point is this. At the theoretical level, I am a big believer in the free flow of labour and capital. When an area or industry overheats, there is a pullback and other areas/industries benefit. Overall, the rising tide lifts all boats and some such rot.

But at the practical level, with the good folks in the Miramichi talk about replacing $25/hour pulp/paper mill jobs with tourism jobs (Miramichi in their strategy talked about the decline of the forestry sector and the rise of tourism) or GM for Home Depot, I get a little edgy.

You see, in my mind, Atlantic Canada sort of got passed over. In my Pollyanna world, Atlantic Canada would have become the outsource location for North America serving up good jobs in the back office and IT at 20%-25% lower costs than Toronto, et. al. But India sort of came in sideways (thanks for that reality check, Mr. Poitras) and beat us to the punch.

So, now we are trying ‘nearshoring’ or ‘homesourcing’ or some such incarnation to try and regain some momentum and bravo to ACOA, NSBI and the others that are trying it.

I have to believe there’s a niche in the global economy for woebegotten places like New Brunswick.

Because we all need to be clear about one thing. New Brunswick’s economy may be sputtering along now on Home Depot, government and health care jobs but when the people go – so will the Home Depots, government and health care jobs which exist soley to service local populations.

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0 Responses to My little Toronto Star moment

  1. Anonymous says:

    UM, HOW exactly did the US benefit? Working hours up, industrial accidents up, real wages down, disposable income down, prison populations skyrocketing with non-violent offenders, city centres disintigrating.

    I think you mean ‘RICH americans benefitted’ in ways that most people predicted. And the above repercussions were during the boom Clinton years, you can push them to the extreme after that and add the fact that their economy now exists for the sole purpose of repaying China!

    But yes, american corporations, like most corporations, are VASTLY wealthy and the rich hardly know what to do with all their money. That was also predicted, although not as a consequence of NAFTA, but of fiscal policies in general.

  2. David Campbell says:

    Come on. Spew forth to someone who’s naive. There are 30% less people below the poverty line in Alabama than in New Brunswick. City centres are being invested in like never before. New York’s urban core has never been more livable. Average hours worked are down (they are up in Canada). Wages are up more than Canada. Benefits paid are up more than Canada. 1994-2003. If you don’t believe me, read for yourself.

    http://www.dol.gov/asp/media/reports/chartbook/chartbook.pdf

  3. Anonymous says:

    ‘spew forth’? A little heavy handed dontcha think? First, nobody compared the US with Canada, nobody said Canada was doing so much better, only that people in the US didn’t benefit from NAFTA-overall I mean, obviously. Rich people got MUCH richer. Take a look at those numbers you’re always talking about, with petroleum products being the only increase that boosts NB’s GNP. Thats ALL Irving money. Those guys are literally so rich they don’t know what to do with all their money.

    Of course many people will look and say ‘well, welfare rolls are down’ in many states and cities. That’s like New York and people saying how nice and clean and how you don’t see those disgusting homeless so much anymore. Of course that’s because they were all locked up or run out of town. Now they live in shantytowns in South Carolina, go take a look sometime.

    THe US has the highest percentage of its population incarcerated in the world. Notice how the vast majority are black, hispanic, or native. In other words, american taxpayers are paying to ‘house’ the poor in specially constucted ‘low income housing’, which ironically is more expensive than regular low income housing.

    But the comment was about the states and free trade, meaning you have to compare the numbers to before free trade in the US. Nobody mentioned Canada. Absolutely they are far better than Canada, we are now their gas station, and you know what gas station attendants earn!

    Of course the RICH in Canada are also doing quite well, which just goes to show just how little nationalism means to these people. The Irvings have far more in common with the Forbes than they do with your average New Brunswicker. Just like a homeless guy in New York has more in common with a homeless guy in Fredericton than with a Forbes-except maybe at election time.

    PS Free trade was 1987,so you have to go back further than 1994-and not just look at averages. As said here before, if you take averages, then one guy making billions certainly brings up the average for a lot of people whose income has been cut in half. In fact the Saint John Board of Trade features that statistic on their website, that in fact Saint John is doing WONDERFUL and that ‘family income is up’ (for 2003). However, when you consider how many Irvings have moved into town and the fact that Martins tax cuts freed up a LOT of wealth for the wealthy, that certainly doesn’t mean people are making more.