Wednesday, September 06, 2017

Canada's Precariat Ascendant

Two hallmarks of the neoliberal/neo-feudal society are everyday low taxes and easy credit. Together they help keep the plebs quiet.

They also draw the less advantaged into a class known as the "precariat."  Noam Chomsky used former Federal Reserve chairman, Alan Greenspan's comments to illustrate this scourge:

"In 2005, Citigroup came out with a brochure for investors called “Plutonomy: Buying Luxury, Explaining Global Imbalances.” It urged investors to put money into a “plutonomy index.” The brochure says, “The World is dividing into two blocs -- the Plutonomy and the rest.”

"Plutonomy refers to the rich, those who buy luxury goods and so on, and that’s where the action is. They claimed that their plutonomy index was way outperforming the stock market. As for the rest, we set them adrift. We don’t really care about them. We don’t really need them. They have to be around to provide a powerful state, which will protect us and bail us out when we get into trouble, but other than that they essentially have no function. These days they’re sometimes called the “precariat” -- people who live a precarious existence at the periphery of society. Only it’s not the periphery anymore. It’s becoming a very substantial part of society in the United States and indeed elsewhere. And this is considered a good thing.

"So, for example, Fed Chairman Alan Greenspan, at the time when he was still “Saint Alan” -- hailed by the economics profession as one of the greatest economists of all time (this was before the crash for which he was substantially responsible) -- was testifying to Congress in the Clinton years, and he explained the wonders of the great economy that he was supervising. He said a lot of its success was based substantially on what he called “growing worker insecurity.” If working people are insecure, if they’re part of the precariat, living precarious existences, they’re not going to make demands, they’re not going to try to get better wages, they won’t get improved benefits. We can kick ’em out, if we don’t need ’em. And that’s what’s called a “healthy” economy, technically speaking. And he was highly praised for this, greatly admired."

A new survey by the Canadian Payroll Association suggests nearly half of working Canadians have fallen into our precariat.

The poll found 47 per cent of respondents said it would be difficult to meet their financial obligations if their paycheque were delayed by even one week.

The survey, which polled 4,766 Canadian employees between June 27 and Aug. 5, also found that 35 per cent said they feel overwhelmed by their level of debt.

For the first time in the survey's nine-year history, more respondents found mortgages on principal residences the most difficult debt to pay down, with 32 per cent of respondents selecting this option compared to 23 per cent who cited credit card debt.

Results from the poll indicate the primary reason for increased debt is higher overall spending.

Of the major reasons for increased spending, 32 per cent of respondents pointed to higher living expenses while 25 per cent mentioned unexpected expenses.

Is this Canada's new economy, one that pushes such a huge percentage, nearly half, out to "the periphery of society"?  If this is wealth distribution in our prosperous economy today, what awaits our grandkids in the difficult decades ahead when the accumulated debts of the past decades, our deferred obligations, are tossed into their laps?

It's useful to recall former World Bank chief economist and Nobel laureate, Joe Stiglitz', observation that modern inequality is neither market nor merit-based so much as it is legislated. It is, overall, legislated by the same people we elect to represent us, the people. Stiglitz discusses this at length in his book, "The Price of Inequality."

You don't have to delve very far into Inequality to be convinced that the ladder is being pulled up and the door is being slammed shut on you through a combination of inequality of income, inequality of wealth and inequality of opportunity. Social mobility, upon which is premised the myth of the self-made man, is being fiercely choked off. If you want to climb the social ladder you're far better off moving to "Old Europe."

Another point that Stiglitz convincingly demonstrates is that the type of inequality that plagues North American society isn't market-driven. It's mainly the creature of government policy harnessed into the service of a truly corporatist state. Governments empower the forces of inequality. By "government" I mean your government.

Stiglitz explains how his United States of America has reached levels of inequality shared only by the most dysfunctional nations and societies. Unless and until it's reversed in the U.S., the nation has no future.


Anonymous said...

Anyong....when I was teaching in South Korea, I had a Korean Bank Manger as a student. He worked for Citibank and was worried about the precariate in 2007. Many people still don't know what that word means.

Anonymous said...

The "Economy, stupid" manifesting itself as the twins of plutocracy&precariat is the real issue in U.S. Trump is just a "useful idiot's" diversion.