Clarification

I wanted to clarify the comment I made responding to Danny D’Amours about Ganong. Certain people in economic development circles are crapping on New Brunswick’s manufacturers that are paying lower wages (say in the $8/hr to $12/hour range). They complain that these jobs are not good enough to retain workers in the province and they do not offer wages high enough to provide meaningful contribution to the province’s tax coffers for use on public services.

I don’t want to be one of these people. I respect Ganong and other companies and what they have accomplished over the years. But I do think that over time (not mentioning any specific company), lower wage manufacturing environments – even in rural New Brunswick – will be increasingly squeezed. Squeezed by the high dollar. Squeezed by China and other offshore locations. Squeezed by the fact that an increasing number of blue collar oriented young people are moving away for $20-$50/hour jobs elsewhere in Canada.

Eventually, we will need manufacturers that pay more (less than urban Toronto but more than today) and base their business model on high productivity, niche products, stuff that it is logistically hard to get produced offshore.

And as for government policy, I return to my earlier post. I think governments should be encouraging the growth of manufacturing here that shows an ROI to the public purse (i.e. a demostrated increase in the taxes paid – personal and corporate).

For me, there would be very few cases where I would be supporting government incentives or training grants, etc. for jobs that are on the low end of the wage scale. I understand the political rationale and I am not trying to be callous here – but we do have to get wages up in New Brunswick.

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0 Responses to Clarification

  1. mikel says:

    I don’t think there is any reason to pick on Ganong. What do you think is the cost of living in St. Stephen? It’s right on the border, plus is one of the most beautiful areas of the country.

    And what exactly are they doing? Dipping caramel in chocolate. I imagine their pay is commesurate with what the people are doing and competitive-otherwise they wouldn’t find people.

    But Ganong only needs X number of employees. And unlike other companies they aren’t stretching into virtually every economic field of the province. And I don’t remember any labour strikes at Ganong.

    If the province had a Ganong for every rural riding we probably would have less to talk about. Sabian and Moosehead are also companies that I’ve heard few bad things about. IF there were some kind of way to create those kinds of businesses in rural areas, the economy would be much better off. Instead, places like Pumphouse are getting squeezed by government support of large multinationals.

    Companies like Ganong and Sabian are good corporate models. As Ganong has said, the success of their chocolates depends on the water supply, which means they will ensure nothing happens to it.

    Mid sized companies, particularly from the area, and dependant on the resources, are usually not bad, depending HOW they are dependant. Irvings have a pulp mill, so they need pulp, so they work to ensure they can get as many trees as possible.

    It’s a question of size. Now that Irving is selling nationally, their thirst for pulp is unlimited, which is obviously a problem when you live in a small province with only so much forest. When Ganong starts telling St.Stepheners to stop using water because they need it, thats when you have a problem (or if the water situation is something other than what I’ve heard).

    But for salaries, just for fun I went to MLS to look at homes. First one- a fixer upper selling for 20,000. That’s TWENTY thousand dollars. That’s a home price for almost what we put as a down payment!

    $35,000 got you a horking huge house. Thats a mortgage of, geez, its so small I don’t even know how to calculate it. That’s what…$500 bucks a month for a mortgage?

    That’s dirt cheap living. For that amount, like I’ve said, if you have half a brain, you can add fifteen grand to that to completely solarize and wind power your home so that you have NO utility payments. That’s fifty grand. That’s about $250 a month if you want to go 25 years!

    Thats EXACTLY why if there were workers and resources, companies would LOVE to be in rural areas and why it takes a lot of political work to force people to cities.

    St.Stephen is not far from Bangor or St. John, so groceries wouldn’t be that hard to stock up on. Geez, I wish they had some research companies, I’d be looking to move there! 20,000!!! I still can’t believe it!

  2. Danny D'Amours says:

    I don’t think that anybody is picking on Ganong. It is simply a a reflection of what happens when the low end of the labour force shrinks either by moving out west or by moving up to higher paying jobs. If there are a lot of unemployed people, paying minimum wage is fine (except that the workers don’t pay much in terms of income tax, but that is another story). As the workers become scarce there is more competition for them and wages rise which I think we all agree is generally a good thing.

    To David question about what is Ganong to do. They have a few options in my opinion: improve productivity so that they can produce more with less workers, increase salaries and take a hit in profits or try to pass the additional costs onto consumers or find a cheaper method of production.
    I’m not sure how much additional productivity Ganong can squeeze out of its factory. If I remember correctly some of its products are handmade so there is not much automation possible.
    Passing additional costs onto consumers is tough when there is fierce competition in the markets.
    Finding cheaper methods of production might be possible. How about setting up a satellite factory in the Acadian peninsula and hire some fisherman in the off season. Feasible? Mind you they could do like everybody else and outsource everything to China. 🙂

    In any case, I hope they succeed and do very well. As Mikel pointed out we need more companies like them.

  3. William says:

    No. Please do not let them outsource to China. I know you said that tongue-in-cheek, however please know that there are people who do read labels (hard to imagine hey?) out there, and seeing that a product is made in Canada is very important to them (me anyhow). I am a student and have little funds but even so I believe in buying local and national made products first even if it hits the pocket.

    And yes you can find them if you are willing to look.

    Always kind of bugged me that while I had this opinion that people should buy Canadian, and I worked for wages in manufacturing plants in eastern Ontario for 8-12$ per hour in unhealthy conditions(Yes!- in Ontario the supposed province of the “haves”) people I knew that worked for the pulp and paper industry for one example and that made wages much better than my own and who would receive little gifts here and there like a nice multi-tool that would cost me a days wages, go out and buy overseas manufactured items at a store like Wal-Mart.

    Hershey closed in Smith Falls. Think I will buy a Mexican hershey bar. No-way! -maybe I am being silly and ignorant to the ways of the global market but tough, there are sillier ways to display your silliness and sending good jobs overseas is one of them. 🙂

    When the pulp and paper mill closes they complain up and down and spit at the idea of having to work at a plant where the salary is 10$ because those are the people they have laughed at for many years while drinking at the backyard bar-BQ. Well did they not see their own demise happening while buying imported goods just to save a little money? Do they not see that someone purchasing paper made in France is putting there job at risk and vice-versa as they buy a pair of pants made in Malaysia as opposed to a Canadian made pair they contribute to companies like Levis packing it in for a cheaper local (other variables the same)? Drives me nuts. Our purchasing voice is so important and people ignore it way too much to the detriment of everybody.

    Anyhow, never having lived in New Brunswick but having visited often enough, I know it is a really great place and I think the quality of life that a job at Ganong and a home in St. Stephen would bring to a young couple is likely enviable by many (circumstances and the illusion of greener grass get in the way most times).

    Sorry if this is not my place to comment. I am out west currently studying (just starting) rural issues and I think a company like Ganong is a good community participant and that they should be encouraged.

    I am open to criticism by the way, as I am new to the study of Rural and Community Development and think that listening to opinions is a great learning tool. I really like your neck of the woods and hope little companies like Ganong survive with support of the people of the Province.

    Water quality. Awesome, if only every company cared so.

    Cheers and thanks, William