BUSINESS

Wrestling with the jobless crisis

Hal Quinn March 4 1985
BUSINESS

Wrestling with the jobless crisis

Hal Quinn March 4 1985

Wrestling with the jobless crisis

BUSINESS

Hal Quinn

The conclusion is all but unanimous: job creation has become the most pressing need of the Western industrialized nations. At the end of 1984 fully 31.2 million able-bodied citizens of those countries, including 1.4 million Canadians, could not find work. And even those who held jobs shared the concern and frustration of

the unemployed. The Maclean's/Decima opinion poll, published in January, revealed that 53 per cent of those surveyed regarded unemployment as the nation’s most critical issue. A similar poll in France, where over 2.5 million people are jobless, found last October that 79 per cent considered unemployment to be their country’s most serious problem. And in Britain, where 3.3 million people are out of work, a February poll showed that unemployment had helped drive popular support for Prime Minister Margaret Thatcher’s government to its lowest point—37 per cent—since its zenith of 48 per cent during the Falklands War.

Clearly, the global job shortage constitutes a crisis of profound significance for organized labor. Still, most union spokesmen and academics agree that labor is virtually impotent to do anything about it and that any solution must come from labor’s traditional adversaries—government and industry.

Said Prof. Harry Glasbeek, a labor law specialist at York University in Toronto: “The only way to create employment is for government or an investor to spend money.”

In Canada, the government of Prime Minister Brian Mulroney has made it clear that it is up to private companies as well as governments to create jobs. At the Feb. 14-15 first ministers’ conference, Mulroney’s employment minister,

Flora MacDonald, unveiled a $695-million job creation and training plan. Coupled with a $205-million summer job scheme, Challenge ’85, and programs already in place, Ottawa’s jobs budget for the 1985-86 fiscal year totals $2.2 billion. The federal strategy calls for increased reliance on private sector job creation, more consultation with the provinces to tailor programs to regional needs and analyses of what jobs will be required in the future.

Vulnerable: Indeed, Ottawa and the provinces are gambling billions of dollars that, to some degree, they can predict future skill demands. MacDonald said that her department’s Canadian Occupational Projection System —which gathers data on skills shortages and trends from business and labor groups—together with proposed local advisory councils for Canada Employment Centres will help make predictions more accurate. Included in the $695million package of proposals: $80 mil-

lion to retrain workers vulnerable to technological change, $125 million for training youth and women, $350 million to create jobs for the chronically unemployed, $40 million for workers in declining communities and $100 million to stimulate private sector job creation. The premiers were supportive of Ottawa’s proposals. But Canadian labor leaders—aware that most new jobs are likely to emerge in service and hightechnology industries, where the unions have had difficulty organizing workers—were more restrained in their reaction. And the federal opposition parties were critical. New Democratic Party employment critic Lome Nystrom denounced the package as inadequate, and Liberal employment critic Warren Allmand said, “There are many parts of the country where there is not a strong business sector and, if you leave it up to the business sector to create those jobs, they just will not be created.” Solutions: At the same z time, businessmen o doubted the governg ment’s ability to identify ■s future job needs. John § Bulloch, president of the Canadian Federation of Independent Business (CFIB), for one, said, “Nobody can say what skills will be needed in five years.” And Michael McCracken, president of Informetrica Ltd., an Ottawa-based economic forecasting agency, said, “Training programs may only produce a more highly trained unemployment force.” Still, MacDonald defended the government’s strategy. She told Maclean's, “Instead of being a one-shot effort, it is now going to be a lifetime process.”

But others offer a host of different solutions. Said Bulloch: “What creates jobs is a healthy small-business community. One hundred per cent of the net growth in employment from 1978 to 1982 came from firms that did not exist in 1978. You can never plan jobs, only create an atmosphere in which enterprise flourishes.”

Some labor leaders questioned the potential of small business to create enough jobs. Said Dick Martin, executive vice-president of the Canadian Labour Congress (CLC): “It is not a true

picture to say small business has created jobs. Many of them are simply contractors to large businesses—a shift of employment from large to small business.” Agreeing with many labor leaders in the United States, Martin said that the best approach to long-term job creation is a government commitment to expanding or repairing the national economic infrastructure. Added Martin: “Public works projects are needed and, because they are labor and materials intensive, they would create growth.” Remedies: One novel approach to job creation has been undertaken by the Quebec Federation of Labour (QFL), although results have been slow to develop. In February, 1984, the 400,000-member QFL formed a Solidarity Fund to invest in smalland medium-sized en-

terprises in an attempt to create or save as many as 45,000 jobs. At the time, QFL president Louis Laberge said, “This is a more revolutionary step for labor than starting a workers’ party.” The fund started with $10-million seed money from the provincial government, but only $4 million has been collected from members. The fund’s investments have been modest—$100,000 in Poterie Laurentienne, a St-Jerome firm with 240 employees, and $500,000 toward a $5.8million expansion of La Scierie des Outardes, a sawmill in Baie Comeau.

While the Canadian unemployment rate stands at 11.2 per cent, it is far from unique in the Western world. The Netherlands’ jobless rate is 17 per cent; the United Kingdom’s 13.9 per cent. In other nations the situation is only marginally better. The end-of-1984 figures for other major industrial countries: Germany,

10.6 per cent; France, 10.3 per cent; Italy, 10.0 per cent; Australia, 8.5 per cent; the United States, 7.4 per cent. Governments in the developed world have attempted a variety of remedies, with only limited and temporary success.

For their part, the Japanese have accomplished their economic miracle—and managed to hold unemployment at 2.7 per cent —with a combination of lifetime employment, seniority-based wages and attractive fringe benefits. In the United States unemployment has dropped by 2.8 per cent in the past 24 months in the wake of lower interest rates, tax cuts and incentives. But fully two-thirds of newly created jobs are in the service sector—the computer, banking, insurance and fast-food industries—where

unions are thinly represented.

But there is an apparent change in the public attitude toward unions. Gary Burtless, a senior fellow in economic studies at the Brookings Institution in Washington, told Maclean’s: “There is this scare situation and workers are becoming frightened to join unions. And most union members are more interested in protecting existing jobs than creating new ones.” The unions have called for even lower interest rates, the creation of a government bank for new investment and substantial spending on public facilities to create jobs.

Depressed: The attempted remedies in France have accomplished even less. Last March the Socialist government of François Mitterrand launched a modernization plan for five nationalized industries, at a projected cost of 200,000 jobs. The government combined job cut-

ting with job creation, including retraining programs, early retirement options and fiscal aid to 14 depressed areas. Another novel French plan to create jobs has foundered on union opposition. Last May, Yvon Gattaz, president of the Conseil National du Patronat Français, a French employers’ group, proposed a complicated five-part plan to persuade unions to relax stringent contract provisions, including job security and hours of work provisions. In return for union flexibility, Gattaz pledged to create 470,000 new jobs. But in December, with several major unions on the verge of signing an accord with Gattaz, a grassroots campaign led by leftist labor leaders objecting to what they called the abdication of workers’ rights, succeeded in scuttling the plan. More than 2.5 million French workers were unemployed at the end of 1984, and the total may reach three million by the end of this year.

Wary: In Britain, Prime Minister Thatcher has proclaimed her goal to “make a capitalist of every man and woman” but she has introduced few specific programs. And the protracted 11month coal miners’ strike, in the midst of record unemployment, has undercut the credibility of any job creation pro„ posais which British 2 unions might have to ofa fer. Both unions and in! dustry are wary of job5 sharing plans —often g cited in Canada as a potential solution and regarded favorably by 53 per cent of Canadians, according to The Maclean’s/Decima Poll. The 10.1-million-member Trades Union Congress has recommended the continuation of training and retraining programs, a shorter work week, early retirement, reduced overtime and longer holidays. Noted John Prescott, the opposition Labour Party spokesman for employment: “The British union movement has become a giant with no bloody strength.” That is also true of unions in other Western nations. They can only watch as their governments and industries struggle to create jobs for the unemployed millions.

Mark Budgen

William Lowther

in Washington,

Robert Block

Sandy Fife

Alison Hare

Bruce Wallace

Brigid Janssen

sen in Paris,

Philip Winslow

Peter Lewis

Jack Burton

Tokyo.