I was interested to read this morning the complaints from Solly’s Bagels that they were having difficulty with the bureaucratic red tape involved in bringing foreign workers to BC. If it was up to me they wouldn’t ever have the option.
The Temporary Foreign Worker (TFW) program is a perfect example of the kind of unnecessary government intervention that distorts free markets and underpins the capitalist economy. With the negligible exception of a few highly skilled specialists, TFW exists ONLY to lower the costs of production for corporations below what the rational free market says they should be, and for no other reason.
It is both ridiculous and immoral to bring in foreign workers to perform low-wage low-skill work (flipping burgers, serving coffee or bagels, etc) that can be handled by any Canadian with a brain. Some of these employers claim that the unemployment rate is so low they cannot find local workers. Nonsense. Pay enough and workers will be there; maybe they will leave other employers to join them, but isn’t competition (for labour as well as anything else) a heavily promoted benefit of capitalism?
The Temporary Foreign Worker program exists for the sole purpose of lowering costs to corporations in order to increase profits for the few.
The hypocrisy comes because many of these same employers are far-right evangelists insistent in their demands for removing government regulation of industry — unless, of course, those regulations benefit their wallets.
I propose that the government announce a final end date for all TFW approvals, say two years, and oblige industry to work out whatever readjustments are required. Current temporary foreign workers should be given an easy path to formal immigration if that is what they want; the rest should be sent home.
[Note: I write this as we live in a world of nation states. My personal preference would be to see completely free movement of people in a world without borders and, of course, without corporations. Until that glorious day … ]
I first posted this wonderful 6-minute animation detailing the dehumanization of menial employment back in March. I think it deserves another look:
Thanks to Open Culture for the link.
This is the third in a series of discussions about changes that need to be made to modern capitalism to protect the mass of humanity in advance of a full and revolutionary change to mutual aid and co-operativism. In the first, I proposed new taxation rules for corporations and in the second, I suggested changes in structure for banks; here I discuss corporate governance in more general terms. I note once again that these are just notes, eager for debate and adjustment.
The key to the improvements required for corporate governance is a constitutional amendment (or similar, depending on each national situation) stating specifically that corporations do not have the same rights as human beings; they have only the specific and particular rights granted to them by legislative or executive action.
More specific changes would include a ban on quarterly reporting and forecasting; possibly the half-yearly reports, too. This will enable a new cadre of senior executives to concentrate on managing their companies for the long-term rather than for short-term stock market speculation. The CEO of the world’s largest investment management firm, Larry Fink of BlackRock agrees that CEOs should “focus on creating long-term value instead of emphasizing quarterly targets.” This is such a fundamental and important priority that I would impose severe penalties (including mandatory jail time) on CEOs for any breach.
Loans from the taxpayer would be permissible (see the current Bombardier requests) but indulgence of this kind in state socialism would trigger a specific set of rules of governance. Until the loan has been completely repaid:
- no dividends or similar may be paid to shareholders;
- no share buy-backs or similar schemes are permitted;
- no increase in executive emoluments (of any and all kinds);
- no executive bonuses of any form.
Lay-offs totalling 5% or more of company personnel in any two-year period trigger the same rules as loans for a period of two years; this sanction shall not be concurrent with the loans’ rules. The two-year sanction for any breach of maximum lay-offs will be imposed at the end of any loan repayment.
Corporations may pay unlimited salaries and bonuses to executives, subject to sanctions not being in place. However, the portion of any emolument exceeding thirty (30) times the average non-executive wage or salary shall not be a deductible expense for purposes of determining the corporation’s taxes (in a corporation income tax situation), or shall be added to aggregate revenues (in the license scheme proposed earlier). This will assist the system to return to the Eisenhower days (for example) when profits from increased productivity were shared more equitably among all workers. Currently, CEO pay and benefits are on average more than 300+ times that of the average employee.
Bankruptcy rules for corporations must be changed to ensure that non-executive wages, salaries, and pensions are first in line for payment. Labour should not be a risk proposition. If you work, you must be paid. I believe trade suppliers should be paid next. Banks, other lenders, and investors have to bear the risks that their rewards suggest.
Finally, no corporation should be allowed to make political donations (in cash, in kind, through third-parties, etc. without limitation) without the express consent in advance of sixty percent (60%) of all shareholders both as to amount to be contributed, and to whom donated. This rule will only stay in place until we rid ourselves of politial donations altogether.
If we put these rules in place, then we will mitigate some of the worst excesses of modern capitalism. If they stay in place long enough, these changes will tend to lean us in the direction of mutual aid and co-operativism, which should be the ultimate aim.
As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders. I was reminded of this today when I looked at the Royal Bank’s financial statements showing that they made $221m in pure profit EVERY WEEK last year. That is $221m of YOUR money given every week to someone else.
There has to be a better way, and there is.
I would oblige all banks to become credit unions and I would strictly limit their functionality.
Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none. Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.
I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages. Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.
No one would be limited in their desire to engage in stock market or other investments. But these would be handled entirely by companies separate from banks. No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.
Competition between credit unions, if such were needed, would become a function of service and accessibility. I believe this would get us more branches on the streets and a more personalized service between member and bank. It would bring banking back to the people, to a smaller more human scale that we can understand and control — after all, it is our money they are using.
A few days ago I published a list of policy ideas that I believe will help alleviate the housing affordability crisis in Vancouver. I mentioned at the time that I would probably forget something as I wrote, and I did:
10. Capital Gains Tax: I would change the regulations on the capital gains tax exemption for principal residence by adding a time component to ensure that speculative flipping became less profitable. I would suggest that there be no exemption for a resale in the first 12 months of ownership; 25% exemption in year 2; 50% exemption in year 3; and 75% in year 4. The full exemption would apply thereafter. I would also insist that the time limits only begin when the true beneficial owner of the property proves residency in BC. Not only would this provide a disincentive for speculative buying, but would reinforce the idea that a home is primarily a home rather than an investment.
Policy #10 also implies a much broader definition of transparency in property ownership, enough at least to identify the genuine beneficial owner.
Some weeks ago, I published my views on densifying Grandview. I wrote it primarily as a prophylactic against the lies that others were putting in my mouth but, when it was done, it was a relief that I had finally put it out there; whether others agree with it or not is irrelevant, the fact is I am willing to stand up and be counted for what I believe.
Yesterday afternoon, I was engaged in a discussion about housing policy — not for the first time — and I was disappointed that the idea of banning foreign house purchases was still so prevalent as a “solution” to our affordability crisis. I have real trouble with picking on an entire class of people (in this case, “foreigners”) as scapegoats for any problem — surely the 20th century taught us the dehumanising and murderous folly of that! Besides, a “foreign” tax would not stop rich Torontonians or Montrealers from buying all the property and we would be back at square one.
As an antidote to that kind of discussion, I have decided to list nine policy ideas that I believe will significantly improve the housing situation in Vancouver. A few of these ideas are repeats from my densification model. This list is not in priority order, and I bet that some of the things I want to say will be forgotten before I get to them, but this list should encourage a debate of what is practicable in the near future.
1. New Building Development approvals: I believe that the primary reason we are in this mess is because City Council and their development cronies have deliberately continued to build housing units at costs/prices that ignore the median income levels in our city. They have built for greed rather than need. I would make it clear by City By-Law that approvals for new builds must meet an income test — a high percentage, say 75-80%, of all units for sale or rent must be available at rates equivalent to a maximum of 30% of Vancouver’s media family income. Failure to meet that test will guarantee failure of development approval.
2. Elimination of CACs, full payment of CACs: I have argued this point in a lot more detail elsewhere. Not only would this reduce the cost of building but, at least as important, it would return a measure of democracy to decisions on public amenities.
3. Empty unit tax: One of the results of building for greed rather than need is the vast amount of empty housing units to be found in Vancouver, tens of thousands of them. I would impose an empty unit tax that really bites; it should be high enough to encourage the sale or use of most of these units. The revenue from such a tax would be collected in an Affordable Housing fund (see #9 below).
4. Property value: If we really believe that a house/apartment should be a home not an investment (which is what it has been for most of our history) then I would end the free market in property for sale. In the same way that we already limit rents to a certain CoL increase each year, then the value of a home for sale should be similarly limited. The million-dollar windfalls that have fallen into the laps of certain sellers are an historical anomaly and have helped destroy the market for young and lower-income families. Market pressures will allow prices to fall if required, but the law will limit any maximum increase.
5. Property Tax: Regardless of the bellowing we hear every year, property taxes in Vancouver are comparatively low. The standard $1.5 million house in Vancouver pays about $5,000 in taxes. A similarly valued property elsewhere in most of North America pays multiple times that much (see examples in New Jersey [tax $US14,971] , Connecticut [$US21,145], Kansas [US$10,000], Portland OR [US$12,128]). I would add an affordable housing surtax to Vancouver properties all of which would be devoted to an Affordable Housing Fund (see #9 below).
6. Rental units: I would change the law to ensure that rents are tied to the unit not to the tenancy. In other words, there can be no increase in rent simply because a tenant moves out (or is forced out). This works well in other jurisdictions such as Montreal and would deal with the appalling eviction rate we have in Vancouver. There would have to be some incentive to landlords for suites to be upgraded and renovated as needed (need more thought on this) but there should be no permanent displacement and current tenants would gain the right to return at the same rent.
6. Existing suites: There are still a large number of “illegal” suites in the City. I would grandfather all these suites, without additional permit requirements, so long as they are registered. Once registered, they should fall under the Rate of Change legislation, ensuring that the number of rental units is not reduced. I would amend the Rate of Change rules to include any group of three suites on a lot rather than seven as of today.
7. Suites in Older Homes: I am aware of a number of older homes, in perfectly good condition, where the owner would like to add a revenue suite. However, the current rules at City Hall require extraordinary, expensive, and quite unnecessary adjustments, sometimes to the entire house before a suite can be approved. Health and safety are one thing, but many of these rules seem designed to obstruct the construction of suites and, at the same time, to serve as profit centers for the City coffers. I would push for far less stringent regulations for new suites constructed in buildings built before 1940.
8. Increase units per lot: Rezone most areas to allow three units per lot if wanted, and maintain rental-only for laneway houses. This is described further here.
9. Affordable Housing Fund: I recognise that the policies outlined above would primarily assist the average working person or family. Something different is required for very low income/welfare/homeless residents. It is vital that all three levels of government get back into the low-income housing business. At the municipal level I have suggested two revenue streams that could be fed into an Affordable Housing Fund. This should also be the receiving point for funds loosed by senior levels of government. The fund should be used to build housing on city-owned land for welfare & low income residents. In the event that we can clear up the crisis at that level, the fund could then be used to create publicly owned housing or to fund cooperative housing societies.
Well that’s it. I have never professed to be a housing analyst, but these ideas seem like common sense to me, especially as we drag along on this unaffordability crisis. They are just ideas and I welcome debate and discussion to ensure that, as soon as possible, we find the right balance.