This week the Ottawa Citzen published my op ed on the impact of technological growth on manufacturing: Where the jobs went. Jim Stanford of the CAW responded with: The real job killers, also published in the Citizen. A couple of points I would like to respond to:
We used to pay for those deficits through a huge surplus with the U.S., but no longer: a diminished surplus with America now offsets just a fifth of our massive deficit with the rest of the world. A petrofuelled 60-per-cent surge in the loonie only accelerated Canada's loss of market share.
No argument here.
What, then, is the policy response to keep the dollar lower?
In short, Moffatt's faith that technological growth makes everyone better off is unjustified by recent history.
I never suggested such a thing. If you lose your job to a robot, then I would suspect more often than not you are being made worse off. Society is wealthier, sure, but not necessarily every individual member of it. (In economics language, we have a potential Pareto improvement).
What, then, is the policy response to keep robots from "stealing" our jobs?
Note that we can tell the same story about international trade as we can about technological growth, as illustrated by Building F-35s in Southey, SK. Trade is a technology that allows us to transmute wheat into fighter jets or cars into oranges.
But Caterpillar's demand to cut Canadian wages in half has nothing to do with technology. It reflects power: a global company's ability to isolate and threaten workers, one factory at a time.
The Caterpillar story is pretty consistent with one of capital replacing labour. If the supply of a particular skill of labour is greater than the demand, demanders have a fair bit of negotiating power to drive the price down.
That being said, I would not defend Caterpillar's business strategy, as I mentioned on a recent TV panel with Tim Carrie, CAW Local 27 President.