Twenty years after Canada signed the Free Trade Agreement its biggest boosters have grown wealthier but promises of better jobs and rising living standards fell short, says a study released by the Canadian Centre for Policy Alternatives.Shrinking workforces, corporate profits at record highs, falling wages and rising inequality. Canada's experience under NAFTA pretty much mirrors our own. Free trade did create some new jobs over the past 20 years, but about one third of them were in the services sector at lower average wages than those lost. Sound familiar?
The Canada-US Free Trade Agreement was signed on January 2, 1988. The study examines what’s happened since: It takes a sample of 41 Canadian Council of Chief Executives (CCCE) member companies – the leading supporter of free trade – and finds they shrank their workforce by 19.6% while their revenues grew by 127%.
“Its promoters said free trade would create more and better jobs but that promise was clearly hollow,” says the study’s author, CCPA Executive Director Bruce Campbell. “There are fewer jobs today in the traded goods sector than there was before free trade.”
“And contrary to the CCCE promise of better public services and social programs under free trade, governments slashed programs by 26% -- more than six times deeper than the OECD average – largely at the urging of lobby groups like the CCCE.”
Among the study’s key findings, between 1987 and 2006:
The 41 companies’ combined revenue grew from $142 billion to $310 billion while they shrank their combined workforce by over 118,000. The Big Three automakers shrank their Canadian workforce by over 50%--from 87,626 to 43,000. Their revenue grew by 70%, from $38.9 billion to $67.3 billion. Despite the massive Alberta oil boom, the three major oil companies in the sample cut their combined workforce by almost one-third, from 22,500 to 15,428. Their revenues soared from $13.7 billion to $53.4 billion--a 290% rise. Corporate profits are at a 40-year high, but Canadian workers’ wage share of the economy has fallen steadily. Only the richest 5% of income earners saw rapid growth in their inflation-adjusted incomes from 1992-2004.[all emphasis added]
Friday, December 28, 2007
Canada post-NAFTA: An era of economic insecurity
Americans aren't the only ones unhappy with NAFTA. A new study from the Canadian Centre for Policy Alternatives reaches a similar conclusion: Free trade has failed to live up to its promises.