Publications, opinions, and speeches
The cost of a bargain
Published on 30/05/2013
Everybody loves a bargain. To buy something at a big discount to the normal price, to find a store that consistently has unbelievably low prices, or to find that magical mixture of high quality and low price is like a dream come true to most of us.
We like cheap burgers, cheap shirts, discounted jeans, and low-cost all-in vacations.
We normally don’t think about why these things are cheap as we are buying them. But when we do, we realize that they are cheap for a reason.
That $2 burger is made by people getting a $2 wage. That $5 tee-shirt is made by someone making less than that a day, and likely in a shoddy building that is unsafe but has low rents. A popular book in New Zealand a few years ago was Where Underpants Come From, which traced low-cost underwear back to very low-wage, precarious workers in Asia.
We have become used to low prices, and to the notion that we can get most things cheap or free.
But when we are faced with the true cost of things, we don’t like it.
There is a real shortage of low income housing, and of supportive housing for people living with disabilities. And there is insufficient funding to maintain the public housing stock we already have. But nobody wants to pay for it.
In the Toronto region when we are faced with the true costs of building a modern transit system, as we were recently when Metrolinx tabled its funding plan, we balk. Metrolinx needs $2 billion a year for its Big Move to bring the region up to date in transit. But Toronto’s mayor, and the leaders of the two opposition parties in the legislature choose to pretend that the necessary funds will appear magically elsewhere. The mayor doesn’t want to burden the Toronto taxpayer, thinking that the provincial or federal taxpayer should pick up the tab. But they are the same taxpayer.
We have wonderful neighbourhood parks, but we are moving to charging people fees for the use of these parks, and we are starving the parks of money for maintenance and improvement.
In housing, transit and maintenance of public spaces, we have decided not to pay for them in order to keep taxes low, to preserve that fiction that we can have things cheap.
About two-thirds of Canadians live under economic stress, usually paycheque to paycheque. They have low levels of savings because they don’t earn enough to have much left over after the necessities. For them, the story of prosperity relates to someone else. Prosperity in Canada is unevenly distributed.
So you can’t blame people for enjoying a bargain because bargains are a necessity. But bargains are self-perpetuating. A person with a low wage requires a $2 burger or a $5 tee-shirt, but the purchase only ensures someone else is stuck in a low wage job, often in another country.
When Henry Ford started producing automobiles over a century ago, he said that he had to pay his workers a good wage so that they would be able to buy one of his cars. It was a smart and wise observation.
Today, that wisdom is in short supply. Owners (including shareholders) and operators of businesses drive down their costs by reducing wages. Governments and corporations attempt to disable labour unions so wages can be reduced. Worker protections are weakened where they exist at all. Full-time work is reduced to part-time work, eliminating benefits to workers like extended health care and pensions.
In the end, two thirds of the population is reduced to the $2 burger and the $5 tee-shirt. And to opposing the taxes that would build housing and transit, and keep our parks green and free.
That’s no way to build a city or a society. Prosperity that only goes to a third of us is a false prosperity. It affronts our notions of equality, and undermines the inclination of the majority to feel a sense of equitable ownership in their community and country. Canada belongs to everyone who lives here, no matter where they live or how long they’ve lived here. Unless employers and governments are able to come to grips with the economic disenfranchisement of the majority, we are threatened with the instability of disparity.