Canadian Deindustrialization

I thought I had been reading Jim’s posts carefully enough, but I was still kind of stunned when I did a quick stat check to respond  to a comment on my earlier post on globalization and unions.

In 2000, manufacturing output (in constant 2002 dollar terms) amounted to $188.9 Billion.

In 2010, manufacturing output amounted to $158.3 Billion – 16% less than in 2000 in constant dollar terms.

Manufacturing output fell from 18.4% to 12.8% of GDP over that period.

(2011 annual average figures not yet in – there may have been a very small uptick.)

Manufacturing employment fell by by 505,000 or by 22.5% (from 2,249,000 to 1,744,000) between 2000 and 2010. (Labour Force Survey.)

As a share of employment, manufacturing fell from 15.6% to 10.4% (and slipped very slightly again to 10.35% in 2011.

The decline in manufacturing employment has been greater than the decline in production, indicating that stronger than average labour productivity growth  has been a factor behind job losses.

But the fact of Canadian deindustrialization is glaringly apparent.

9 comments

  • So these figures show Federal policies are devastating Ontario families by taking away their livelihood?

    Or is there much of a manufacturing base ouside Ont?

  • Ultimately, increasing productivity needs to be dealt with by each individual doing less work.
    I mean, if there are 25 million hours of work/week needing to be done and a million people to do it, then you have two basic choices:
    –A 40 hour week for 5/8ths of them (or higher for even less) with the remainder unemployed and destitute
    –A 25 hour week and full employment, with extra leisure for all
    You’d think this would be an easy choice, but if the desire is to keep the workers running scared of unemployment so they don’t insist on good pay and conditions, then you want all those unemployed people.

    In the end it’s also clear that having jobs for people making things requires not buying them all from elsewhere. There are no doubt lots of mechanisms for arranging this, but current mainstream political/economic ideology forecloses basically all of them as inconvenient to the wealthiest. We are in the incoherent position that creating jobs is forbidden because this would cut into the profits of the wealthiest, which is not allowed because hypothetically they . . . create jobs. Any minute now, the right swears.

  • Manderly: How much does this matter? Ideally there should be manufacturing jobs around the country, and the policies depressing the manufacturing sector seem national in scope, so they will both kill such jobs across the country and strangle across the country any attempts to create new ones (including, say, in Alberta, which is not constitutionally barred from having manufacturing industries).
    In any case, I’m a British Columbian and I don’t quite see that if it were only Ontarians losing jobs, that would somehow make it OK.

  • Purple…the high unemployment is definitely deliberate…

    To create downward wage pressure and to increase labour productivity…

    This economic crisis is fake….Greece is being used as propaganda ….the way New Zealand was in the 90s…

  • Purple…just wanting to clarify…not saying it is OK…think it should be a wake call to Ontarians to bug McGuinty for action…

    My read is that Saskatchewan and Alberta seem to be sort of ok jobs wise…but the rest of the country is in the sewer…

    Unless even they are now soft on jobs?

  • Doc a partial answer to your original question can be found here:

    http://rppe.org/?p=2634

    Andrew,

    “But the fact of Canadian deindustrialization is glaringly apparent.”

    Yes and therefore is the need for everyone to move to Alberta. So said my favourite gliberal economist this morning on the English CBC. When pressed on retraining he grumbled something about the market taking care of it.
    http://www.cbc.ca/video/news/audioplayer.html?clipid=2210373565

    The good news is that they ended the segment with look at Norway.

  • There are many cross currents within those numbers and I do wonder, if we are seeing a bit of bias caused by an asymmetric reduction in the unemployment and revenues due to assets with lower capital to labour ratio being shuttered than others. It seems logical to make that inference given the lazer beam focus of busniess interests pointing the higher wage cost of doing business in Canada. (I hate to push that as I am not wholly convinced, hold constant the quality of product, labour standards and outputs levels constant and I will give you an answer)

    Also, recall as we move into a more cost conscious environment, there is undoubtedly a push to hive off value adding within the firm to processes outside the firm. This distorts the employment to revenue ratio as the same value adding revenue is reported for less NAICS defined employment manufacturing. Many economist want to discount this, but it is a significant factor, as we know in the qualitative business model, this is a highly strategic move in attempts to cost cutting. And the key is many times these employees work for a company outside the manufacturing NAICS.

    However, overall there have been a massive decline in manufacturing employment. The thing I find ironic, is how long we here on the PEF and elsewhere in progressive circles have been pointing out a simple fact that eluded many for the past 6 years- manufacturing MATTERS!!!.

    I recall a CAW campaign I helped out with in 2006, called Manufacturing MATTERS when all the wise ones stated manufacturing was in its twilight era. MEH!

    And to PLG, the whole reducing working time is a legitimate goal, however, I am a firm believer that we have a demand problem, and reducing supply is too easy an outcome. Especially in a world with such social, economic and environmental injustice.

    I say we focus on the demand aspects and innovate the hell out of the production, wealth transfer and environmental space, before we start looking at reducing labour.

    I still cannot get behind Rifkins, End of Work arguments, if anything, given the state of the world, I think that is the antithesis- we have more work than ever, the question is how much of it can be produced privately for profit and how much is related to wealth inequality.

    Many of our current unmet needs and wants in the queue are potentially outside the ability of market forces capacity to com-modify and hence within a market economy are not produced and ignored. This is a huge area for progressive innovation. Kind of an anti-austerity theory!

    I was blown away watching the At issue panel the other night and trying to quantify innovation. Focusing on new kinds of french fries and the like. How a bout innovation that helps the environment, not one mention of it. Pretty pathetic.

    One panelist mentioned the problem is our narrow conception of defining innovation- wow talk about an under statement. With that kind of political leadership, it is no wonder we are falling behind.

  • Well, I take your point, Mr. Tulloch. Certainly there is much that needs doing which is going undone due to the structure of our economy and the way it places value on things. I’m definitely no defender of the notion that markets are always right.

  • @PLG I think the reason I get a bit sensitive about the End of Work thesis, is it has risen up recently in a number of circles. There is a recent book that kind of re-animates Rifkin’s end of work hypothesis, called Race Against the Machine.

    Two massive issues that somehow we need to somehow leverage into the solution space.

    Demand is the problem, just look at the poverty in your hood, your city, you region, your nation, the globe.

    1) Somehow it must enter into the solution space of the right wingers and the liberals, that enabling demand in these massive areas of poverty, is indeed a solution to the economic troubles of our time. Nope instead we have Kevin O’leary telling us that we need new kinds of innovative thoughts around curly french fries. MEH!

    2) We need innovation to embrace the production process to deliver this new found demand in means that solves the productive efficiencies, in a manner that is socially and environmentally sustainable.

    And it starts with information and manufacturing.

    I go back to me thesis

    manual labour production-> mechanized production-> automation based production-> information based production-> Smart automation — (and where we are now) Massively informated Smart Automation.

    And if have machine centric technology in your head at this moment- bang- you are dead wrong.

    It is human centric, with machines supporting the worker in a smart, networked, informated production process guided by a design process that is wrapped in green in terms of inputs, value adding and outputs from the production process.

    Call me a dreamer, but a engineering black box take the worker as mere highly deskilled appendage is no match for a brain with an efficiently designed interface to a machine as support. The age of the internet with dtrsibuted computing power and the informating capacity we have with datamation will usher in a whole new production process, where the worker’s knowledge and training become so much more than a mere cost to be minimized.

    However I have one hitch with my thesis, this goes against everything Taylorism strips the worker of- mainly knowledge and control which ultimately leads to shop floor power. Hence will black boxes continue their less than superior productivity outcomes on so many levels contra the human machine centered production based on other motives, i.e. protection over control.

    It is all in our design paradigm of the production process. It is what will continue to empower global corporations to deskill, and black box every production process.

    Potentially I am giving too much causation to the micro, but I am a firm believer in the root of this solution being micro focused.

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