Leaving London to find work

[manny_santos]

So it has come to this...

Several relatives of mine in the London area are leaving to get jobs in another part of Ontario where there are more jobs...

In Northern Ontario!

London's economy is now so bad that people are going to a traditionally high unemployment area to find work. My one cousin can't find work here but he's found work in a Northern Ontario city.

Wow...just wow.

[Stevo26]

So it has come to this...

Several relatives of mine in the London area are leaving to get jobs in another part of Ontario where there are more jobs...

In Northern Ontario!

London's economy is now so bad that people are going to a traditionally high unemployment area to find work. My one cousin can't find work here but he's found work in a Northern Ontario city.

Wow...just wow.

This is nothing new, really. When I was in my mid-20s, I left Toronto because I couldn't afford to live there anymore, and returned to London. It was tough finding work, and when work was available, it was poorly paid. And that was in 1989! I'm fortunate to be employed in the public sector in a decently-paid job, so the issue of unemployment/underemployment is not an issue.

London has always had a problem with fluctuating unemployment rates. The times when jobs are plentiful and well-paid are short-lived, too.

Part of the problem is that London's economy isn't sufficiently diversified. We have a small manufacturing sector, but it's not sophisticated and not well-paid, if you exclude companies like 3M and GM Diesel. By the way both of these companies are in a period of stasis right now - that is, they're not growing and the jobs they do need to hire for tend to be fairly specialized.
That means average Londoners can't really hope to find work at either company.

The city has a lot of small to medium-sized companies, but these tend to spring up and then drop like flies the minute the economy catches even a sniffle and this is an additional reason why the local unemployment rate fluctuates.

When TD Canada Trust and London Life pulled out of the city, their departure blew a huge hole in the local economy, and correspondingly, employment prospects. The economy of the future is going to involve knowledge work, not manufacturing. We ought to be focusing on bringing medium to large biotech firms and other high-technology concerns to London - they would be a natural fit with UWO, which produces many grads in engineering and the sciences.

If the best LEDC can do is attract low-wage, 'no future' manufacturing and service industry concerns like call centres, then London is going to decline in importance and competitiveness over the next ten to fifteen years. It's a given that the loss of competitiveness will motivate young people and skilled professionals to go elsewhere for work rather than wait around.

[manny_santos]

If the best LEDC can do is attract low-wage, 'no future' manufacturing and service industry concerns like call centres, then London is going to decline in importance and competitiveness over the next ten to fifteen years. It's a given that the loss of competitiveness will motivate young people and skilled professionals to go elsewhere for work rather than wait around.

I agree with you completely. I saw LEDC president Peter White speak at an LEDC function back in January, and he was emphasizing the high number of companies in London which students could apply for. But they didn't seem to have much of a solid strategy to attract more companies to London. One of the few strategies mentioned was lobbying the provincial government to widen Highway 7. I think that will benefit Stratford and K-W more than London, and even then that is probably decades off.

Nonetheless, I am aiming to get into the London offices one of the "Big 4" accounting firms next year, all of which have offices here. If not here, then I'll try Toronto.

My guess is that the post-secondary education and health care sectors will only increase in importance in London in the coming years, as they employ a greater percentage of the employed workforce.

[ldoto]

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[worldwide]

the knowledge based economy is a sham. its based on cheap energy and increasing globalization. to base our future entirely on this would be foolish at best.

[ForestryW]

Agreed. Europe did it, but North America isn't ready.

[Stevo26]

the knowledge based economy is a sham. its based on cheap energy and increasing globalization. to base our future entirely on this would be foolish at best.

You've got a point, although I wonder what you would recommend as an alternative. For the last fifteen, twenty years or so North America has been busy hollowing out its manufacturing sector and shipping it, in pieces, overseas.

Even with the collapse of GM and Chrysler I see no moves afoot to restore manufacturing to what it once was in North America.

What's even more ironic is that the manufacturing that is moving into North America now is foreign-owned, and at one time these entities, in their most basic format, would have been owned by domestic firms.

As to the issue of cheap energy, it doesn't matter if we use it to run a knowledge-based economy or one supported by manufacturing, because oil is beginning to run out.

Oil prices are as cheap as they are now mostly because of depressed stock markets, but they won't stay that way forever. However, oil companies seem to have realized that when they ran up gas prices like they did last summer, they nearly cooked the global economy, so they seem less willing to pull the same stunt now.

[manny_santos]

Oil prices are as cheap as they are now mostly because of depressed stock markets, but they won't stay that way forever. However, oil companies seem to have realized that when they ran up gas prices like they did last summer, they nearly cooked the global economy, so they seem less willing to pull the same stunt now.

Part of the problem is that minimum wage in Ontario and other provinces is too high. Every time the minimum wage goes up, it hurts Ontario's economy. People like myself who make minimum wage make only a small amount of extra money, but get hours cut back so we're making as much money as before or even less. I am definitely making less money now than I was at this time a year ago, when minimum wage was $8.75.

In the meantime the cost of doing business has gotten so high here that businesses like Stirling Truck are pulling out of the London area and are moving to Mexico, where the cost of labour is much less. And no, the lower minimum wage does not mean the people there who are employed are living any less comfortably than us. The cost of living there, compared to here, is much, much less. Here we are getting ripped off for a bottle of Coca-Cola, as an example - here it now is $2.25 from vending machines but down there it is 10 pesos, or 86 cents Canadian. Another example, the Internet cafes there charge 69 cents Canadian per hour, while Head 2 Head Games in London (one of the few Internet cafes in this city) charges over $5/hour. Not surprisingly, last time I was in there the place was deserted.

Our economy would be in much better shape if for-profit companies could accept lower profit margins to stimulate spending, and if the government freezes the minimum wage for the next few years to keep Ontario competitive on the global market. The minimum wage level does not make much difference for a minimum wage earner such as myself, but it makes a huge difference for companies.

At the same time executives need to take big pay cuts. They are also destroying the economy.

[worldwide]

You've got a point, although I wonder what you would recommend as an alternative. For the last fifteen, twenty years or so North America has been busy hollowing out its manufacturing sector and shipping it, in pieces, overseas.

it would be nice to see more of an emphasis on smaller scale local manufacturing and agriculture. we will need this in times of high energy costs. this may not on its own sustain the "high standard of living" that we enjoy now, but hey the best things in life are free. i would love to see an end to rampant consumerism, but hey i'm weird, i don't expect everyone to agree with me.


Even with the collapse of GM and Chrysler I see no moves afoot to restore manufacturing to what it once was in North America.

well of course you don't see us moving in that direction, big oil and the corporations are running the show, and they have a huge investment in the status quo. they will sustain the unsustainable until it implodes.


As to the issue of cheap energy, it doesn't matter if we use it to run a knowledge-based economy or one supported by manufacturing, because oil is beginning to run out.

there will be a point where we will need all of our energy to provide our basic needs NOT including personal transportation, sorry guys. at this point a knowledge economy will become irrelevant along with the rest of our system. this point in time is probably closer than anyone thinks.


Oil prices are as cheap as they are now mostly because of depressed stock markets, but they won't stay that way forever. However, oil companies seem to have realized that when they ran up gas prices like they did last summer, they nearly cooked the global economy, so they seem less willing to pull the same stunt now.

if the price of oil goes high enough it could probably make the dollar trivial, and take the economy along with it. the economy got a heavy shakedown in 2008 when the amount of money expended on oil reached 25% of the global GDP. any higher than this and we begin to run out of money with which to buy the oil. as the global economy shrinks, this 25% ceiling becomes a smaller number. at some point the countries that still have oil in the ground will want to keep it and use it for themselves as oil its self will be more valuable than any money, or any other resource for that matter.

oil = money and money = oil. without increased oil consumption there are no prospects for growth in the global economy. a growth economy with no prospects for future growth quickly dies as it is not possible to service current debt without the assumption that there will be more money in the future.



i'm probably leaving a bunch of points out, and forgive me if i'm not as clear as i should be on all points, its 3am here and i have to go to sleep.

[Stevo26]

Part of the problem is that minimum wage in Ontario and other provinces is too high. Every time the minimum wage goes up, it hurts Ontario's economy. People like myself who make minimum wage make only a small amount of extra money, but get hours cut back so we're making as much money as before or even less. I am definitely making less money now than I was at this time a year ago, when minimum wage was $8.75.


The reason why minimum wage hikes hurt the economy is that employers who rely on minimum wage workers cut hours back in an attempt to make the same amount of profit as before. The cost of that practice is borne by workers (in terms of lowered living standards) and by customers (longer waits because there might now be only one cashier to serve ten customers where before there were two).



In the meantime the cost of doing business has gotten so high here that businesses like Stirling Truck are pulling out of the London area and are moving to Mexico, where the cost of labour is much less. And no, the lower minimum wage does not mean the people there who are employed are living any less comfortably than us. The cost of living there, compared to here, is much, much less. Here we are getting ripped off for a bottle of Coca-Cola, as an example - here it now is $2.25 from vending machines but down there it is 10 pesos, or 86 cents Canadian. Another example, the Internet cafes there charge 69 cents Canadian per hour, while Head 2 Head Games in London (one of the few Internet cafes in this city) charges over $5/hour. Not surprisingly, last time I was in there the place was deserted.


The problem with Sterling Trucks is that pulling up stakes and going to Mexico may result in short-term profit gains, but if the people who used to make their trucks can no longer buy as much as they used to, eventually a situation will be created where fewer trucks are sold because of less economic activity in the place where the trucks used to be built. Business leaders can be incredibly short-sighted and mean-spirited.

GM, for instance, could have afforded to continue paying its workers $75.00 per hour (benefits factored in), but it wanted to get out from under the pension and health obligations it willingly agreed to, just so it could make bigger profits. So, what did they do? They trashed the company to make sure that it would go into bankruptcy. Years of bad engineering, inadequate funding of R&D and slipshod marketing research were also major contributory factors to GM's demise.

Never let anyone tell you Big Three workers were making too much money and were therefore uncompetitive. European and Japanese auto plant workers actually make as much, and sometimes more than their North American counterparts. They have to, in order to be able to pay the income taxes that fund their extensive cradle-to-grave social welfare entitlements.

On the other hand, I will concede that prices for a lot of things in Canada are seriously out of whack relative to what people can afford to pay, and are not justified by the actual value of the goods or services sold. As for $2.25 for a bottle of pop, there are options - buy it at a variety store or don't drink it.

If the vending machine operator sees he can't sell at $2.25, he'll cut the price. Remember that when you buy anything from a vending machine, you are really paying for the convenience, not the product. Wholesalers of vending machine goods know this and price their products accordingly, which means their profits are built into the inflated price you pay.

As for Head2Head Games, they too are operating on the convenience factor and charging accordingly. But they're also charging an inflated price to try to get you, the customer, to pay for the dead times when they're not making any money.

Actually, Mexicans do not live as comfortably as we do. Just try getting very sick in a small town deep in the interior of Mexico and see what happens. If you're lucky, they'll medivac you by chopper to Cancun. If you're poor like most Mexicans, you'll suffer. Or die.

Prices in Mexico are cheaper because there are vastly fewer health and safety regulations for companies to contend with. There's no minimum wage law there either.

Plus there are few, if any protections for employees and consumers. Workers' compensation plans are expensive to run and happen to be non-existent in Mexico. Pollution controls are similarly lax. A bottle of Coke that sells for $1.50 here in Canada would go for the same price in Mexico if the extensive consumer, labour and environmental regulations that exist in Canada existed there too.


Our economy would be in much better shape if for-profit companies could accept lower profit margins to stimulate spending, and if the government freezes the minimum wage for the next few years to keep Ontario competitive on the global market. The minimum wage level does not make much difference for a minimum wage earner such as myself, but it makes a huge difference for companies.


Uh, hate to break it to you, but businesses will NEVER accept lower profit margins to stimulate spending. They only time they will ever do so is when their survival is at stake.

Freezing the minimum wage will do nothing to improve things. The vast majority of minimum-wage employers are businesses that either make razor-thin profits (and therefore are marginal players) or simply greedy entities that know they can get people to do the work for so little money.

I leave it up to you to decide which category companies like Wal-Mart fall into.

Indeed, many such businesses are so marginal that if they had to pay a living wage and make a profit they couldn't survive. In other words, their profits are made on the backs of their workers, who deserve a fair share of the fruits of the company's revenue-generating activities.

Sure, you could eliminate minimum wages altogether, but employers would royally abuse such a system. Taxes would skyrocket as governments attempt to ensure people have an income they could live on and so the economy as a whole wouldn't collapse. The corporate sector is already very extensively subsidized, why add insult to injury?
[/quote]


At the same time executives need to take big pay cuts. They are also destroying the economy.

Agreed. However, the problem with the Western economy, as I see it, is that too many people are trying to make maximum profits while denying the other guy any profit at all. To see what I mean, consider the cost of a hybrid car. No doubt the batteries in these cars are expensive, as are the research and development efforts needed to bring the car to market in the first place. Yet hybrid cars are priced not according to the battery and R&D costs plus a fair profit, but to ensure that what you save at the gas pumps goes into the pockets of the manufacturers and not the pockets of consumers.

In other words, the manufacturer gets all the profit out of the transaction, but you get nothing other than the illusion of saving money and doing something good for the environment.