Why we're seeing the ugly new face of capitalism

CAW workers picket outside at the Electro-Motive plant in London, Ont., on Feb. 3, 2012, the same day that U.S.-based heavy equipment maker Caterpillar Inc. announced it was closing the plant and moving its production to Indiana.

The Globe and Mail:

Capitalism has entered an ugly new era that may work well for the shareholders of the world, but not for the rest of us.

Stubbornly high unemployment, talk of austerity and huge household debt levels have people worried, on both sides of the border, and some employers are using that fear to their advantage. Newly aggressive demands that workers give up income join the decades-old demands that governments give up revenue. The implicit deal is that lower taxes create more investment and competitive cost structures create more demand. Both supposedly create more (good-paying) jobs. Lower taxes, check. Lower payroll costs, check. More good-paying jobs here at home: Insert sound of crickets chirping.

Employers have told workers to suck it up before. After the free-trade deals of the 1980s and 1990s, companies moved Canadian jobs to lower-wage climates. In the 1930s, bosses fought unions to prevent costs from increasing. But you have to go all the way back to the 1880s and 1890s to see profitable firms -- running railroads and coal mines -- demand workers keep working for less so they could make more.

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