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Friday, September 28, 2007

Forget "Make Work" - Try "Take Work"

I know I’ll probably get some nasty feedback over this little brain fart of mine but what the hell. Besides, there are two things I really hate:

Keeping my mouth shut; and
Sitting in front of an idle keyboard.

Here goes.

Has anyone living in, or who has recently visited, the St. John’s area noticed that on almost every street there are countless signs practically begging people to apply for a job?

I drove down Torbay Road a couple of weeks ago and counted no less than 11 such signs in a 1 kilometer stretch. It was inspiring.

Granted most of those jobs are in the service sector but with the high demand for employees these days companies are now offering everything from medical plans to dental plans to flexible shifts, above market wages and a myriad of other perks.

If you look in any copy of the Independent or the Telegram the number of job ads has reached a point where they use up more and more pages every day. Soon the ads may create enough demand to keep the Grand Falls mill open for another hundred years, and the thing is, most often those jobs are high paying professional positions.

This new reality, where there are more jobs than applicants, may exist in the Metro area but once you move into rural parts of the province the picture is much bleaker.

The unemployment rate across the rest of the province is staggering.

With a provincial election underway this dual reality is providing fodder for the parties and has led some to shout from the rooftops that rural Newfoundland and Labrador has been neglected ever since the oil boom hit.

Well folks, I don’t believe that for a minute and neither should you, no matter how often you hear it said.

It isn’t true under the Williams government and it wasn’t true under the previous Liberal government.

In fact I’d be willing to argue that a great deal of focus has been placed on rural areas for a long, long time. Unfortunately most of that attention wasn't on what really mattered, like protecting the fish stocks before they were destroyed rather than building another unnecessary fish plant to help some candidate win an election.

It's not a matter of rural areas not getting any attention but of getting the wrong kind of attention.

Maybe it’s time someone looked at the entire problem from a completely different angle. One where politics is left out of the equation and where pandering to voters is not a concern.

If nobody else is willing to try it I will.

“It is not the job of government to make work”. There I said it and it feels good.

As someone far wiser than me once said, “It’s the job of government to keep the trains running on time”.

Granted that might be a little more difficult ever since our railway was ripped up and sold off some time ago, but the point is that governments shouldn’t be in the business of holding our hands and creating jobs for the sake of creating jobs.

The place of government is to make sure that essential services are delivered in the best way possible, that the public is safe on the streets and to foster an environment conducive to business growth. It’s business that should create employment, not government.

Yes, a responsible government should, and usually does, encourage business growth. They do this by offering tax breaks or other incentives to setup shop in strategic areas. They also try to court investment and market the benefits of the places they govern. That doesn’t mean, no matter what any candidate might say over the next two weeks, that government can, or even should, throw money at any industry that is clearly not salvageable or create work just to get people working.

That’s especially true in Newfoundland and Labrador these days.

I originally came from a small town and moved around the province and around the Country for years before finally settling in the St. John’s area. Essentially I went where the work took me. I didn’t want to leave my home town and I still hope to return there when I retire, but I did what I had to do. I’m still doing it.

I’m just thankful I managed to find a job where I can take a 5 hour drive on a long weekend to visit my home if I choose to do it.

Most people want to stay where they grew up, where they have family and where they are the most comfortable in their skin, but most of us can’t do that. This isn’t something that’s unique to Newfoundland and Labrador, it’s happening across Canada and around the world.

Business and industries generally congregate in large urban centers and attract employees from more rural areas. This isn’t some sort of conspiracy or plot. It’s just the way things are.

No matter how much oil or how much gas is produced and no matter what politicians may promise, most of the business spin off from the oil industry will continue land in the St. John’s area. That’s something the government has very little control over.

Business leaders usually want to locate where they can most easily find suppliers, are close to their customers and have a bigger pool of potential employees to choose from. This is true for direct oil industry employers as it is for secondary industries like IT companies, retail stores, restaurants, hotels, taxi services and the rest.

Why is it then that so many people believe that if there isn’t a job in their small town that they are being neglected and forgotten? Why do they look to government to spend millions to create employment in places where there is none and where business does not, for whatever reason, want to move?

Think about what that expectation would really mean if it were acted upon.

In today’s reality, it would mean that government revenues, including the tax dollars desperately needed for infrastructure, schools, hospitals and so on, would be eaten away trying to find ways to make employment in one part of the province while just a few hundred kilometers away, in another part of the province, companies are screaming out for new employees. Does that make sense?

When it comes to new industries like aquaculture, wind farms, smelters and the like there are valid reasons those need to be built outside of the city centers, and there is no doubt that this sort of development is, and will continue, to happen as viable opportunities arise. It’s doubtful however that those developments will grow fast enough to make a serious dent in the unemployment rate in rural Newfoundland and Labrador any time soon. That is also a reality.

Spending millions to try to create work in some areas while there is a severe shortage of workers in another is a recipe for economic disaster.

So why are there still those who believe that simply because there is a dual economy in the province, rural Newfoundland and Labrador is getting nothing from the oil boom?

As I noted, I’m originally from far outside the overpass but I now live near St. John’s. Do you know something? I get the same benefit from the oil industry and increased government revenues as most people in the province do, urban or rural.

I don’t get a cheque in my mail box every week. I don’t glide to work on gold paved streets and I don’t spend my days sipping champagne. I work for a living and more often than not I work damn hard only to drive home over a road full of potholes.

On the other hand, I do occasionally notice some improvement in highways across the island (it’s here that the folks in Labrador may have a far better argument than most about being forgotten or neglected).

I sometimes see new dialysis equipment, cancer clinics or seniors care facilities being built.

I see attention being paid to refurbishing schools or improvements being made to other government services.

I see more or different medications being covered by the government funded drug plan than in the past. (Though not nearly enough)

I see provincial debt slowly being addressed and I see the amount of income tax I pay every week reduced thanks to lower provincial taxes.

It’s these things that are made possible by an increase in provincial revenues and it is these things that are used to spread the wealth from the oil and gas sector around the province.

Don’t get me wrong. I’m not praising the current government for these things. It’s simply a fact that there is more money coming into provincial coffers today than there has been in the past and as a result more can be done.

More will continue to be done as time goes by, no matter which party wins the election on October 9. Though the specific spending priorities may change, the way the wealth is distributed will not.

If there are deficiencies in how services are dispersed across the province now or in the future then yes, by all means fight for more attention and better treatment, but don't for a minute believe that no benefits are finding their way to rural Newfoundland and Labrador simply because you can't find a job where you live.

If, instead of improving services, the next government opts to spread the wealth around by actually listening to those who believe they are being neglected and artificially prop up or extend the life of any industry that isn’t viable then we will all pay the price eventually.

It's simple folks.

Government should not spend its time and millions of dollars of our money trying to artificially create employment in one part of the province while there is a severe shortage of workers in another.

It’s all about keeping the trains running on time.

Editor's Note: (Though I had been considering a commentary on this topic for some time, I would like to take a moment to thank an anonymous poster over at Sue's Blog, which I visted the other day, for giving me the final inspiration I needed to get it finished.

Thanks as well to Sue for being so courteous when I asked how she felt about me running this piece so soon after the comment appeared on her site. You're one of a kind.)


Anonymous said...

Excellent commentary....it won't be popular commentary, but it is true and right. Best piece that I have ever seen on your site.

Patriot said...

Thanks Anon, but I'm not sure if I should take your comment as a compliment on this commentary or as an insult to the previous 400 or so on the blog. (Just kidding).

I hope to discover that most people who respond have opened their eyes enough to see that what I'm saying is reasonable. I hope that's the case but I suspect there may be more of a negative response than a positive one.

That doesn't bother me from a personal perspective but it would signal that we have a long way to go politically, socially and economically. That would be the most disheartening.

I guess we'll see.

Ussr said...

"Government should not spend its time and millions of dollars of our money trying to artificially create employment in one part of the province while there is a severe shortage of workers in another.

It’s all about keeping the trains running on time."

BRAVO ,Patriot,BRAVO !!!

Glenn said...

Agree with ANON. Well reasoned post Patriot.

There are a lot of help wanted signs out on the SW coast as well. Lot of the rural roads need serious paving commitments going forward and the TCH is a death trap when it rains, causing hydro-planing. Health care and education are the other meat and potatoe issues. Home care support worker benefits and pay rates also becoming an issue. Debt-repayment fund is a must. Prosperity fund option is a rediculous endeavour. I wonder who the brainchild of that assinine vote buying scheme could be?

If company X can't succeed in a free market economic system, no amount of gov. intervention will save it. Only delay the inevitable at a cost to the taxpayer. Governments shouldn't be in the business of picking winners and losers. Period.

I guess someone forgot to mention this to Lorne Calvert. Quelle surprise, he's calling an election this week.


I guess the only thing Danny and Lorne have in common is their disdain for PMSH.


Anonymous said...

Interesting entry. Given that you are supporting a market driven economy, does that mean you would frown on the Federal Government pouring tax dollars into NL (e.g. not removing natural resources reveues from equalization calculations)? There are thousands of jobs in Alberta, perhaps e.i. benfits could be cut to those who do not wish to move their to take advantage of the prosperity? The fishery (including the seal hunt) should lose any government funded support (seasonal e.i. benefits, icebreaking services etc.) and be self sustaining. Northern tax allowances should be discontinued, along with freight subsidies, ACOA discontinued and tax incentives for investing in NL stopped. Hell, we can even eliminate the unnecessary industrial benefit requirements from our resource negotiations, allow the developers to use whatever labour they wish (regardless of where they are located) and recoup the difference in higher royalties.
Stripping out all these unecessary uses of our tax dollars would go a long way to providing tax relief to those of us carrying that load.
Government should not spend its time and millions of dollars of our money trying to artificially create employment in one part of the country while there is a severe shortage of workers in another.

It�s all about keeping the trains running on time.


Patriot said...

Hi Anon,

I can see where you are coming from and to some degree, believe it or not, I agree.

I agree to cutting all of those things if and when all other provinces stop taking equalization, when the fed stops financially propping up the Auto industry in Ontario and the textile industry in Quebec.

When they stop giving EI to seasonal workers in other provinces then do it here as well. No EI for Loggers in northern Ontario for example would be a start.

No subsidies for farmers, the beef industry and the milk industry would naturally require changes to how the fishery is treated (of course that should also mean they give up control of the fisheries as well).

Of course there should also be a halt put to federal trade arrangements with other nations that trade away fishing rights.

The list goes on but if they plan to do all that then you might have a point.

Anonymous said...

I do believe you, I've felt that way for years but have always accepted the majority rule of liberal social spending.
If this framework were adopted, the unfortunate result would be the decimation of rural NL. It's probably headed that way regardless so why not rip the band aid off and reverse the financial bleed now. All seasonal workers (regardless of location) should be subjected to increasing e.i. rates as any repeat insurance claimant would be. As one who hasn't claimed e.i. in 20 years, I feel that I should have a drastically reduced premium. It is not in my best interest to have my tax contribution wasted propping up industries / workers that are not viable year round.
This is not a new idea, btw, taxpayers all over Canada have been screaming for program reform for years. Unfortunately, political representation is disproportionalte to poulation distribution and the "have nots" successfully defent their welfare rights by virtue of holding power over the most seats. It's time for a reform.
Will the idea catch on, or is it too much of a political risk?

Patriot said...

Interesting points again but that's not really what I was getting at. What I was saying, to the person who misguidedly felt that whatever province he is from, was supporting NL, was that he should be careful what he wishes for.

As for EI, I don't have a problem with reducing premiums for those who rarely draw on it, in fact truth be known all premiums could be dropped across the board. The fund has (or more accurately had before it was put in federal general revenues and spent elsewhere) far more money than it would ever need.

Seasonal workers are necessary, otherwise we would never have wood products, fish, etc. Should they be penalized for that (no matter which province they are in) That's another question, but we all pay into EI and the fund, if the money wasn't stolen by the fed for other uses, would have enough funding to cut all of our premiums.

Anonymous said...

According to stats Canada, Atlantic Canada has more seasonal workers than in the rest of Canada combined, and thus are being subsidized by the rest of Canada.
I'm sure that the rest of Canada would be thrilled to transfer the e.i. program from Federal coffers to Provincial ones - it would result a wealth recovery for their respective jurisdictions.
Seasonal employment is important to many industries. The flaw with the current model is that any industry that requires labour on a seasonal basis should pay all costs associated with retaining that workforce. Teachers, for example, are not eligible for e.i. benefits even though their work is seasonal in nature. This has been accomplished by raising their pay to a suitable annual level and distributing that pay over 12 months rather than 9. Similar programs should be instituted for other professions (logging, fishing etc.). The employers would be required to pay more for a stable work force, and those not willing would be required to shut down as a natural consequence. As Glenn said, “governments should not be in the business of picking winners and losers. Period.” Those industries would not be competitive internationally without the artificial supplements that their workers receive in the “off” season. They would have to become more efficient if they wish to become more competitive and survive. As it is, many workers in these “industries” have recognized that and are re-tooling to participate in growing or stable sectors. It is no accident that much of rural NL, frustrated with their standard of living, are migrating to urban centres or west to where the work is. If we allow this scenario to play out, NL’s population would drop to less than ½ of what it is today before stabilizing. 90% of the population would be consolidate to larger urban areas, resulting in lower support costs for social programs (health care, education etc.) and we would pay down our debt very quickly with the savings, bolstered by increasing resource revenues. The fiscal challenge is maintaining rural services while the transition occurs. I believe that Williams recognizes this, and is letting market forces deal with the rural challenge rather than policy and government intervention. It’s ugly to witness, particularly if you’re being displaced, but in the end, those who manage to stay will be much better off both fiscally and from a service perspective. Incidentally, this population shift would have occurred naturally over the last 30+ years had e.i. not included seasonal work in the first place. The fact that this was not allowed to happen and that some provinces are chronically dependent on subsidy is what frustrates taxpayers who are paying into the system rather than taking from it.
Incidentally, I’m posting from St. John’s, where I have lived and worked for the last 20 odd years. I pay more in taxes than most residents of this province make in a year, and take very, very little back in return. The industry that I work in receives no funding from any government, indirect or otherwise. I can empathize with the concerns raised by other provinces related to excluding resource revenues from equalization. That being said, I’m confident that if they were guaranteed that a short term investment on their behalf resulted in a restructuring of the NL economy and eliminated the need for further subsidy, they’d be all over it. Williams needs to drop the charade at home and tell it like it is, otherwise, we’ll never gain their support.
Patriot, kudos for having the fortitude to write your article. You are correct, the idea is not popular and is very political. It’s about time that we all recognize that we can’t have our cake and eat it too, and if NL is ever to prosper, we will have to let some of us will have to change our lives. Our economy has depended on the system for too long, it's time to change the culture that has developed as a result.

Patriot said...

For what it's worth anon I also live near St. John's and will stack my taxes up against yours any day. My job is also not subsidized in any way.

That said, and thank you for your compliment on the article, you clearly are glossing the surface of the issue with your comments.

When you say, "Teachers, for example, are not eligible for e.i. benefits even though their work is seasonal in nature. This has been accomplished by raising their pay to a suitable annual level and distributing that pay over 12 months rather than 9. Similar programs should be instituted for other professions (logging, fishing etc.)."

You fail to take into account that teachers are paid by government and that can more easily be done. On the other hand, the loggers, etc. are not paid by government but by private enterprise. It is seasonal and I'm sure Abitibi or some other mill would balk at raising wages so employees did not have to collect EI which they and the employer already pay into.

You also say people are getting into other industries that are not as seasona. I also believe that when full time work exists someone should take it over seasonal but if you follow the argument you make to its logical conclusion (no more seasonal work) you would see mills shut down across Canada because they are not paying year round. In other words there would never be any paper products, lumber for construction and so on. There is a value to those jobs as well as to yours or mine.

You also say there are more seasonal workers here than in other parts of Canada, that is somehting we would all like to fix but when you actually look at the dollars being used up from EI Ontario and other places are much more expensive overall than NL is.

Anonymous said...

Interesting points Patriot, but they support the position that Government should not subsidize failing industry?
Under a market controlled economy, Industry that depends on government subsidy (logging, mills etc.) would be forced to either pay more to attract a stable workforce or be faced with recruitment and training costs every season. If that cost exceeded their profit, they would either have to relocate to less expensive region, find another government that provides corporate welfare or shut down. Once the level of supply is reduced, the prices for their products would naturally rise. This would make it sufficiently profitable to re-open the shut down capacity and pay the workers sufficient wages to keep them in place year round. If that condition does not come to pass, the industry is best served operating in another area. Demand will either remain constant or consumers will switch to less expensive alternatives, naturally evolving the business. We see that now in the energy sector. In that sector, developments that were previously not feasible are being considered as the price of the commidity rises.
The numbers that I referencede for # of seasonal workers are based on employees, not funding. I have not located the amounts paid by province but if you have them, please post. It would be interesting for all to see how our e.i. dollars are being spent.

NL-ExPatriate said...

I must say I totally agree with you on this very touchy subject.

But to use your analogy of it's govt's job to keep the trains running on time. Trains in this context meaning basic infrastructure like Roads, Access to cheap unfettered power, social , health services and opportunites.

It would be well and good to keep the trains running on time if the basic infrastructure already existed. Unfortunately due to the claw backs of our resource revenues by the feds to maintain ROUGHLY the same level and standard of Social and health services only it has left our people and province underdeveloped and lacking in opportunities another way of saying outmigration.

We have no roads let alone paved roads along the south shore or coastal Labrador and the final phase of the TLH or the missing 5km of road between Bucans and Howley.

We have 33 communities substandard, rationed and expensive diesel electric generation. Over 200 communities on boil order water for some time now. One of our main sources of transport isn't considered to be a part of the NHS that is the provincial ferries. If they were included in the NHS we would be eligible for 50/50 cost sharing with the feds.

Now I would rank the proposed fibre optic line along the south shore to be a part of keeping the trains running on time and a good investment for our people especially in the opportunity challenged areas along they south shore as I would include the TLH in this trains analogy. I would also include providing coastal labrador with access to the interconnected grid in this trains ananlogy. Especially when you consider that from all of the quotes I've heard it would cost somewhere in the region of 300 million. A steal at that price IMHO especially when you consider most of these communities are subjected to the FILO/LOFI pricing rip-off of the oil companies for heating fuel. Those residents would be much better served with access to the interconnected grid and utilizing GeoThermal.

So yes your right it isn't govt's job to make work but rather to create the environment that is conducive to attracting work.

I would give my right arm to have an opportunity to move back to St John's. No Toll ferry/economic embargo to get to canada's Cuba.

Get to visit my home town and family dead and living more frequently. And best of all get to live with and amongst the best people and culture in all of canada.

NL-ExPatriate said...

I wrote my first comment without having read the other commentary.

Just a few notes on the commentary.

To my knowledge teachers have some sort of agreement with EI that tops their off season wages up.

Kinda like the agreement the auto workers have with the UAW that their wage will be topped up top 65% if they go out on strike.

As for the seasonal workers being a drain on the system. What most everyone forgets is that for the most part it is the seasonal workers that are fueling the system because every dollar they make is new dollars unlike the recycled dollars that come from the primary sources of income yes seasonal makes up a large part of those primary dollars. Where as Ottawa's economy is made up of mostly recycled dollars and if you considered all of those federal jobs, services, and supply jobs for what they rightfully are welfare from the colonies.

As for totally giving up on rural NL no I don't think that should be the plan but rather rurla NL needs it's economies of scale built upon IE agriculture, blue berry farms sheep and goat farms etc, aquaculture yes but as far as teh wild fishery goes the prov govt really has no say in the matter and because we have no equal representation on the federal level the wild fishery is managed controlled and dictated to by ON/QU. Even the 7 representatives we send to Ottawa on our behalf can't represent our interests because we insanely choose to elect them from a federal party in which they will have to toe the party line which is drawn by the majority ON/QU. That same national federal party has to do what's not only in their own best interest of getting re-elected but as well they must do what's in the best interest of the majority of canadians once again ON/QU even if the policy and decisions they make and going along with are harmful to their own constituents and in contravention of the founding principles of this federation in that resources are owned controlled and should be to the primary benefit of the province in which they exist.

Something like micro loans and R&D to help our rural people pull themselves up by the boot straps.

Instead of giving 1000$ babies change it to 1000$ for the third child either adopted or conceived and use the saved 2000$ for a micro loan program. It is only by encouraging families to have a third child that the population decline can be curbed anyway.

canada is systemically flawed and the only way we will ever get a say over our own resources and affairs is if we elect federal representatives who don't have to toe the national party line and do what's in the best interest of the national party getting re-elected and the majority of canadians.

Just as an after thought some other trains that need to be either built or kept running on time are
911, highway depots 24 hours, smack ottawa up side of the head for increasing the economic embargo on NL.

BNB said...

Hi Myles. I finally found a post on your site I'm not totally in agreement with. Although I fully agree that government should not be in the make-work business I think there are blatant examples of how government is contrary to effective growth of rural communities.

Let me give you a handful of examples:

1. You mentioned ripping up the rails - we are both all to familiar with that of course. Recall the in ripping up the rails there was a promise of improving the highways. What happened with the funds recieved from killing the railway? Roads in and around St. John's are improved while the Trans-labrador highway remains uncompleted and the Sir Robert Bond Bridge at the hub of the railway remains in its original state dispite the promise of ungrade and dispite being damaged from the 1984 flood. Here is one of many examples of funds diverted from Rural Newfoundland and Labrador to grow urban Newfoundland and Labrador.

This is ending up being a long comment so I'll throw in another couple of quick thoughts where rural growth has been suppressed by government, or has been used to fed urban NL growth.

Hydro centre is in St. John's, the facilities are elsewhere.

Metis Windpower.

Labrador mines.

Churchill Falls.

Entrepreneurs have expressed to the NLDL and the CLCC how government red tape is hampering their progress despite not asking for direct government assistance.

I rarely have an issue with your posts so I felt this one needed a comment.

Patriot said...
This comment has been removed by the author.
Patriot said...

Thanks for the informed comment BNB. I don't believe we are as far apart on this as you might think however.

The thrust of my commentary was not that the province should'nt do more to fund infrastucture and services in rural NL, in fact the opposite is true. As I mentioned, facilitating business growth and ensuring quality services is the responsibility of all governments.

Where I have a problem is when governments artificially try to prop up industries by pouring money into enterprises as a means of buying votes or temporarily providing employment when there is no long term solution (or where there is a solution and the money is wasted on the actions I mentioned instead of addressing the root cause.)

You make some very good points about things like the TLH, Churchill Falls, etc. In fact I've also been a strong proponent of those things.


NL-ExPatriate said...

Would an infeed not be considered to be a part of keeping the trains running on time?

I think the Stephenville Mill would still be operating if it had access to cheap clean energy. What with the loonie soaring I suspect Corner Brook and Grand Falls will soon be in financial woes unless access to cheap clean energy can be secured.

At present we can make use of 650 MW's to replace Holyrood, The Long harbour smelter should take another 1000 MW's, The proposed LNG terminal will require some, the planned refinery will need some also.

The existing lines through quebec only have an excess of 1000 MW transmission so in my mind the Lower Churchill 2800 MW's is already spoken for and unless we can provide the means to utilize the Upper Churchill in our own province to benefit our own people it will continue to flow to Quebec come 2041.

Having said all of that I still think the possibility of hooking all of Labrador up to the interconnected needs to be investigated and costed further. 5% equity would go along way towards this objective.

There is no doubt we will need access to more energy in the very near future.

BNB said...

I know you are a strong advocate Patriot, I certainly would take nothing away from you for that.

Although I do agree with your post and comment about wasted funding for the sake of vote buying I think the other facit of the whole rural vs urban debate is that rural communities feed urban and larger regional centres. There is certainly the case where political patronage and chummy business contacts are funding lost-cause ventures, but there are also viable rural opportunities which get roadblocked by government.

There is a flip-side to this coin that also needs a look.

(who deleted the comment before mine - did I tick someone off :))

Patriot said...

Good points all.

The deleted comment was just my first draft of the one I posted. Just forgot to include something originally.

Anonymous said...

Good dialogue from all posters. NL ex-pat - factual correction, teachers receive no pay from e.i. etc., their pay is simply distributed over 12 months and is 100% funded by the provincial government.
The issue with seasonal workers is not the value that they bring, it is the practice of their incomes being supplemented by their fellow citizens. Either pay them sufficient wages to support them throughout the year (as is done to the teachers) or require them take on another job in the "off" season. No able bodied man should be encouraged to work for a portion of the year and be idle for the remainder. It is unfair to his fellow citizens and allows corporations to use tax money to pad their bottom lines while retaining their workforce in a manner that is couterproductive to natural economic development.