By Dave McKee
The Trudeau government has come under a lot of heat over the past few months, for its “botched” immigration plan. It claims that the Liberals opened the door too wide, and the resulting population surge is causing “economic damage.”
In January, a panel of chief economists from the big banks said it clearly: “Too many temporary foreign workers and international students are driving up prices, taking up housing and causing productivity to collapse.” It’s a handy little narrative from a right-wing perspective – easily conveyed, skewers the Liberals (and NDP) for a policy gaffe, nicely tied up with a xenophobic bow that scapegoats migrants.
Except, the government’s decision to dramatically increase immigration wasn’t a gaffe at all – it’s perfect capitalist logic.
Trudeau and Co. announced the new policy at the beginning of 2022, just as Canada’s unemployment level was trending below pre-pandemic levels and workers were ramping up wage demands. It was the same time that the Bank of Canada began jacking up interest rates, with the oft-stated argument that “labour markets have to soften” if inflation is to be tamed.
Just as Bank of Canada governor Tiff Macklem used high interest rates to forcefully increase unemployment, Ottawa used increased immigration to further increase the number of job seekers. It was a brutally effective tag-team attack, the effect of which was to significantly increase the “reserve army of labour” – the vast numbers of unemployed and underemployed workers that capital uses to drive wages down.
A recent report from the Canadian Union of Public Employees (CUPE) helps clarify this.
CUPE notes that economists are reporting that total workers’ wages increased through 2023, but then asks the question, “Total compensation is up, so why aren’t wages?” The union points out that total compensation includes combines earnings for all working people in the country. Using this measurement, data indicates that total compensation rose by 6.5 percent last year.
But the vast majority of workers didn’t see their earnings increase by that amount – not even close.
While total compensation rose by 6.5 percent in 2023, CUPE points out that the number of workers in Canada increased by almost half a million, and the number of hours worked rose only a small amount. Using these figures, the union calculates that the average worker’s wage increased by only about 3.6 percent in 2023, below the CPI increase of 3.9 percent.
The conclusion? Growth in total compensation was driven more by an increased number of workers rather than increased earnings.
Put another way, by driving up the number of workers in the economy, the government drove workers’ real wage growth way down (that “softened labour market” Tiff Macklem so desired).
It’s a tactic that capitalist governments have used for decades – Upton Sinclair poignantly wrote about it in his classic 1906 muckraking novel The Jungle. The challenge to the labour movement is how to confront and oppose the bosses’ weaponization of immigration, without falling prey to reactionary narratives that blame immigrants for low wages, high prices or unemployment/underemployment.
The way forward is to keep workers’ eyes focused on how capital benefits from this type of immigration – by driving wages down, it drives profits up. The amount of work isn’t necessarily declining – it may very well be increasing overall as a result of increased profits – it’s just that the bosses have an effective tool to shift wealth from workers to themselves.
So, labour needs to take that tool away – by educating workers about how capitalism uses immigration, through determined union drives to organize larger numbers of workers and penetrate more industrial sectors, and by connecting the fight at the point of production (for wages, benefits and pensions) with the fight at the point of consumption (for lower prices and rents).
And always, labour needs to point its accusing finger at capital, which is the true source of economic damage to working people.
[Photo: Migrant Workers Alliance for Change]
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