Manufacturing jobs continue to disappear
February 1st, 2012 - 1:53pm
BY PETER HADEKEL, FREELANCE FEBRUARY 1, 2012 3:12 AM
What's the value of a bluecollar job in today's economy? That's a question worth asking as Quebec continues to hemorrhage jobs in the manufacturing sector.
The most recent setback came with the announcement that a dryer manufacturing plant in east-end Montreal will close in 2014. The shutdown by Mabe Canada affects 700 workers who make dryers for General Electric.
The company said it can no longer compete, given the high Canadian dollar and weak consumer demand in the U.S. for appliances. Jobs will be shifted to Mexico and the U.S. - a tough blow given the recent evidence of slowing employment in this province.
It was a replay of a decision made 14 months ago when appliance maker Electrolux announced it would close a plant in l'Assomption and set up shop in Tennessee, at a cost of 1,000 jobs.
And it's the continuation of a longer-term trend in the Quebec economy, as job losses in manufacturing have been the rule rather than the exception since the Canadian dollar began to rise in 2003. Since that time, the shift toward outsourcing to offshore locations has picked up while at the same time the U.S. market, traditionally the destination of choice for Quebec exports, has declined in importance.
So, a policy response is required. The Quebec Manufacturers and Exporters Association, the lobby group representing the industry, says it's "urgent" for the government to come up with a strategic plan to boost manufacturing.
It's not enough to simply let these jobs go and say we can't compete, says Simon Prévost, the president of the lobby group. Quebec can't rely on a service economy alone.
Some might disagree with him. We're constantly reminded that the future of the economy lies in high-tech, knowledge-based industries like information technology, mobile communications and life sciences.
Montreal has become a thriving place for the videogame industry, for example, and a hub for a lot of smaller companies working on Web development or mobile technology.
Conventional economic theory might suggest that you can't stand in the way of this kind of creative destruction and that you have to let capital flow from dying businesses to growing ones. If we're moving toward a post-manufacturing economy, so be it.
But here's the problem: the rewards from this shift are going disproportionately to those with the most education. You need a university degree or solid training in a technical program to ride that wave.
"People with blue-collar jobs traditionally have a high school education," notes McGill management professor Karl Moore. "And we still have a high dropout rate from high school. What jobs do these people get?"
Take the workers at Mabe. Union officials say the average age of the workforce at the east-end plant is 46 and the average seniority is 16 years. What's out there for them?
The focus on knowledge is fine, Moore says, but "a good auto mechanic may be more valuable than a good university professor" and governments can't ignore the fact that there may not be enough jobs to go around for the less educated, especially as technology and productivity displace low-wage workers.
Even within the manufacturing industry, there are more jobs that require at least some math and computer literacy.
That suggests there must be a good mix of education and training programs that cater to all segments of the labour force, he says.
Of course, training and skills won't matter much if companies continue to relocate or avoid Quebec. And on that score, there are some things the government can do.
One would be to cut the high payroll taxes that force companies to pay tax whether they make money or lose it, killing the incentive to hire new workers.
Another might be to ease some of the regulatory costs and labour laws that make the province a less competitive place to invest.
Quebec still has an important manufacturing base that's worth preserving - not through aid programs and handouts but with sensible policies that can create an affordable, skilled workforce.