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The Race to the TopThe Race to the Top

The Race to the Top

Take, for instance, the Canadian Auto Workers Union. Yesterday, the CAW launched a major paper entitled "Re-thinking Canada's Auto Industry: A Policy Vision to Escape the Race to the Bottom." The report outlines policy recommendations including "buy Canadian" measures, direct government investment in the auto industry, Central Bank tampering with monetary policy to lower the Canadian dollar and encourage exports, and a host of other measures intended to "protect Canada's share of this industry." The first community whose head gets stepped on is workers in developing economies.

Brian Dijkema
3 minute read
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The race to the bottom is a full-contact sport full of cheap hits and thuggery. The thugs, however, are not always easy to spot.

Take, for instance, the Canadian Auto Workers Union. Yesterday, the CAW launched a major paper entitled "Re-thinking Canada's Auto Industry: A Policy Vision to Escape the Race to the Bottom." The report outlines policy recommendations including "buy Canadian" measures, direct government investment in the auto industry, Central Bank tampering with monetary policy to lower the Canadian dollar and encourage exports, and a host of other measures intended to "protect Canada's share of this industry."

Its vision claims to be all "about the community," but in reality, it's all about pitting one community—the Canadian manufacturing sector—against others; two in particular. This setting of worker against worker is not becoming of a trade union, but it does provide a clear picture of how some are responding to a world where assumed positions of privilege and power are being upturned. The CAW's response shows the depth to which the capitalist metaphor of "the race"—where there are a limited amount of winners and losers—is assumed even among the left.

The first community whose head gets stepped on is workers in developing economies. Table 1 of the report cites stats that suggest almost all of the world's developed economies' auto sectors—think Canada, Germany, Italy, US—have declined precipitously while production in poorer countries like Mexico, Brazil, China, and India has increased. Those increases are huge; they range from a 12% increase for Mexico to a 105% increase for China.

If you place these numbers alongside wage statistics from the ILO, which suggest that wages in these same places have grown anywhere from 15% in Latin America to a whopping 109% in Asia, one wonders if the CAW is concerned about its counterpart auto workers, or whether it's more interested in maintaining its privileged position at the head of the pack of global earners.

Further, as I've noted in this blog before, the interventionist policies suggested by the CAW are more likely to jumpstart than solve a race to the bottom in Canada. If we're going to get in a mercantilist slugging match with the likes of the US and China, who is more likely to win? I'll give you a hint from my experience in grade nine: the small guy normally takes it on the chin hardest.

But even if we were to implement the CAW's policies, it would still mean pitting workers in one part of the country—mainly in Ontario and Quebec—against those in the booming West. Our economy, like many other developed economies, has shifted away from manufacturing. It's replaced that with resource extraction, a sector which also keeps many manufacturers in business. This isn't an unequivocal good, of course, but the CAW doesn't offer any compelling reasons why auto workers should flourish at the expense of taxpaying electricians, engineers, or labourers in Alberta.

This isn't to suggest that the CAW is completely wrong in its fears that a shift in global manufacturing will have a negative impact on workers around the world. The lack of independent trade unions and robust regulatory regimes in places like China, for instance, does not bode well for workers anywhere.

But it does suggest that there is a strong measure of self-interest mixed in the purported concern for the poor and vulnerable. If we really care about solving poverty and ensuring that workers everywhere are treated with the dignity owed them, it is incumbent upon us to acknowledge the good that is occurring in China, even if it means admitting that it comes at our expense. Moreover, this reality should cause us to search for a new metaphor for our understanding of economics. Perhaps it's time to adopt a metaphor which recognizes that people everywhere are yoked together.

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