The near-standstill in wage growth for American workers hasn't just been good for their employers. It's turning out to be a potential bargaining chip for Canadian companies, too -- at least the ones looking to leverage their employees into accepting smaller paychecks.
A Caterpillar manufacturing plant in Ontario wants to halve its workers' wages, according to The Wall Street Journal. In its negotiations with the autoworkers' union, management is citing a similar Caterpillar plant in Illinois where employees earnless than half of what the Canadian workers make. It's the latest example of how low-wage workers the world over are being forced into an international race to the bottom.
Read it at The Huffington Post
Cheap U.S. Labor Used As Leverage To Lower Canadian Workers' Wages
by Alexander Eichler
Last year, the Swedish home-furnishings company Ikea opened its first factory in America, where employees start at salaries that are less than half the minimum wage common in Sweden, according to the Los Angeles Times.
Meanwhile, the low-wage jobs created in the U.S. often don't pay enough to cover basic living expenses like food, transportation and medical care, for which a salary of about $30,000 a year -- almost twice the federal minimum wage -- is needed....
That old paradox of thrift is sure going to hit home with some deflation as firms pile on in the race to the bottom. Ignore fallacies of composition at your own peril.
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1 comments:
Caterpillar might use some of those extra profits to lobby for more infrastructure spending. Rational self-interest all the way.
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