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Business is the most powerful force in our society right now: Armine Yalnizyan

Yalnizyan

Armine Yalnizyan is senior economist at the Canadian Centre for Policy Alternatives

Interviewed by Monica Pohlmann.

Pohlmann: What keeps you up at night?

Yalnizyan: The way we are transforming our views about immigration in Canada. In the coming decades, nation states will be competing to attract people, not just capital. Population aging is occurring in all advanced industrialized nations. Without newcomers, the Canadian labour force would start to shrink in the next year or two. An unsettling trend has emerged in Canada. Public policy now favours a rise in temporary foreign workers over permanent economic immigrants. When companies say they face a skills shortage, all too often the solution is bringing in a foreign worker temporarily for what is often not a temporary shortage. These workers are tied to their employer, and can get deported if they complain about anything.

In such a workplace environment, it’s hard for any worker to ask for anything better. People are constantly looking over their shoulder, wondering, “Will they find a cheaper me?” It’s a recipe for growing friction between “us” and “them.”

The problem arises from a common view that low wages and low taxes are “good for business.” What may be good for an individual business is a dead-end path for society and the economy as a whole. Wages and taxes are never low enough for businesses. Their job is to maximize profits. But the continuous drive to lower wages and taxes erodes the economic heft of a country. The message to workers is “expect less,” even when companies grow and profits rise. The idea that labour is simply a cost, rather than the essential building block of performance, is destructive nonsense.

Middle-class jobs are being cut, replaced by more low-paid and some higher-paid work. Wages aren’t keeping up with costs for most people, and savings rates are falling. A rising proportion of Canadian households don’t have enough funds to last a month should they lose their pay cheques. We pay tribute to a large and resilient middle class as the mark of a flourishing economy around the world, but our own middle class is being squeezed in every way, ironically in the name of economic growth.

Pohlmann: Do you see any positive shifts happening?

Yalnizyan: There’s a growing awareness that tax cuts are not the solution to every problem. In the public sphere, people are beginning to recognize that what we’re facing is less a spending problem than a revenue problem. Bridges are collapsing, and sewers and pipes built 100 years ago need to be repaired. We’re awash in easy money, but oddly have no money for these essentials. But we’re paying a bundle privately to repair our homes and cars from the damage caused by deteriorating infrastructure. Some communities are putting their money where their mouths are, investing in preventive oral care for all school-aged children, to improve health and reduce costs down the road.

Whether it’s roads or teeth or childcare or affordable housing, there’s vibrant discussion about how public spending can save money, and improve the quality of our lives. It harnesses the power of bulk-buying, reducing unit costs for things that are the underpinnings of every-day life, things that create more and better opportunities for everyone.

Newfoundland and Labrador offers a good example. Their rapid economic growth is largely based on oil. They saw Alberta’s boom-and-bust economic model and decided they needed a prosperity plan that ensured everyone saw lasting benefits from oil money. Labour, government, and business have hammered out long-term strategies on a wide range of issues.

We can learn a lot from the beacon on the rock. One lesson: for growth to translate to broad-based prosperity involves endless debate and eternal vigilance over the role of government. That’s why democracy matters.

PohlmannWhat’s your sense of the state of our democracy?

Yalnizyan: We have a troubled relationship with our democratic institutions. We need to get over the idea that government is something and someone else. The government is us. The idea that governments are largely useless, that they’re more likely to make a mess than fix things, is exactly what corporations would like us to think. It gives them more freedom to use the enormous power of the state to their advantage.

We are becoming a corporatocracy, a state that serves the interests of corporations first and foremost. Business groups write legislation. lobby, use campaign finance to shape the public sphere—how big it is, what it does, who it serves. This is the biggest test democracy faces today.

There is the beginning of a pushback, an awakening that began with the Occupy movement. It’s not very effective yet, but I don’t think it’s going away. Hundreds of years ago, people decided to separate the church from the state. Now, we’re looking for ways to separate corporations from the state.

PohlmannWhat energizes you about Canada?

Yalnizyan: Business is the most powerful force in society right now. Given what I just said, this may seem strange, but I think, with strong democratic institutions in place, that power could be harnessed to make a better world. We’re on the edge of an explosion of technological change—from artificial intelligence to biomimicry to miraculous medical breakthroughs to the internet of things. Canada could provide leadership on how innovations get applied. It starts with making sure we have all hands on deck, so we can make the most of the ingenuity that resides in our population and build their capacity to put good ideas into action.

PohlmannWhat important decisions do we have to make?

Yalnizyan: Resource extraction and exportation is such a 19th-century game plan for growth, complete with a 19th century distribution of benefits and calculation of costs. We need another plan. Not a Plan B, because there’s no Planet B. Canada’s Plan A should help us become a 21st century energy superpower by developing the world’s most energy-efficient homes and forms of transit. We live in a cold climate and have to travel long distances. We should be world leaders in maximizing energy efficiency, whatever its source. Instead of Energy East, think Energy Least. Climate change is forcing every society to address this challenge. Nations can’t succeed on a planet that fails.

PohlmannWhat are examples of where Canadians have met their challenges well?

Yalnizyan: Healthcare would be at the top of my list. We did it early, and we did it well. We should never forget that our model of Medicare comes not from plenty but from poverty. My father had eight heart attacks and died before Medicare came to be. My family lost almost everything because of his illness. Early on, our country recognized that things like healthcare and electricity and education were public services that everyone should be able to access to improve the quality of their lives.

 — This article was originally published by the Possible Canadas initiative.

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