EDITORIAL ——

Anti-budget battle builds

The federal budget of May 23 is rapidly becoming
the classic reference on the sleaziness of Toryism.

The government of Brian Mulroney has shown in
all of its actions since election last fall that it is not a
government of the Canadian people, but a govern-
ment of corporate greed.

Finance Minister Wilson, backed by the Prime
Minister and cabinet, introduced a vicious budget
with full knowledge that it took dead aim at the
working class, the poor, the elderly and the jobless.
That was its intent from the beginning, as revealed by
the Globe and Mail’s Linda McQuaig. Wilson’s own
finance department showed him the figures, the Globe
States.

Country-wide opposition to the budget is growing
like wildfire, and although Mulroney may laugh it off
since his trick election promises got him a big major-
ity, a people’s.majority outside parliament is an ever
more urgent need, to compel policy changes.

The prime minister seeks to confuse those protest-
ing by claiming the pension cuts are only a “proposal”
and may not have to be carried out. They won’t be
carried out if the people of Canada mount a protest to
match their outrage, and consign the entire budget to
the incinerator, and the steely Michael Wilson to
another field of work.

But pensions are only one area where the Tories
plan to transfer billions from people to corporations.

The On-to-Ottawa Trek 85 showed that anger and

determination are growing among the unemployed
and among the additional tens of thousands threa-
tened with unemployment by the Tories and the cor-
porate elite they serve. As in. 1935 under Iron Heel
Bennett’s Tory regime, so today under Mulroney, the
demand is for work and wages. While Labor Minister
Flora MacDonald claims to have created a flood of
jobs; the Metro Toronto Social Planning council’s
findings show the real jobless rate across the country
to be 15 per cent, not the lower figure used by the
Tories to buy the thousands who are denied benefits as
if they didn’t exist.

The Tories have more to their discredit. Their with-
holding of transfer payments to regions and munici-
palities spells disaster for low-cost housing, and again
for jobs. They now have former Liberal minister
Donald Macdonald on side, as chairman of the royal
comission on the economy, saying that a million
unemployed should be considered ‘“‘normal” for capi-
talism. The first eight per cent should be written off the
way Wilson wrote off the first three per cent of index-
ing for inflation in pensions and family allowances.

This is the same budget that sacrifices some $5.5
billion of government income to wealthy capital gains
takers over the next five years.

A lot of people are justifiably angry. But anger isn’t
enough. People need to organize to get rid of the
budget and to run Mulroney’s nose in this clutter of
broken promises.

THE GypGEer
GIVES 15-600

| STAND ON
PRINCIPce :

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et

CovT WoRKERS

Profiteer of the week

The National Bank of Canada, Montreal, with some 600
branches across Canada, had an after-tax profit for the six months.
ended April 30, of $75,300,000, only about a third of Royal Bank’s |
profit, but up from the same six months a year earlier whenitwas -
$53,500,000. |

TRIBUNE

SALT II — and the next step

Under pressure from the world’s peace forces, the warhawk Caspar Weinberger, the U.S. defence secre-
U.S. NATO allies and Soviet peace negotiators, the tary.

Reagan administration “decided” June 10 to abide by
the terms of the SALT II (Strategic Arms Limitation
Treaty) agreement with the Soviet Union. Reagan had
been threatening to breach SALT II, which the U.S.
has not ratified although then President Jimmy Carter
signed it in 1979.

While the announcement was accompanied by
much bluster about monitoring Soviet “performance”
in the arms control talks in Geneva, the move (which
saved the U.S. a shattering loss of confidence around
the world) was, nevertheless a stunning defeat for

the other hand, Reagan’s pushing of Star Wars is a
threat to negotiations for arms reductions. The Cana-
dian government could help to push things in a posi-
tive direction by declaring Canada a_ nuclear
weapons-free zone — as Manitoba has done —
instead of tying Canada to the U.S. war program
through Star Wars, the Northern Warning sytem,
NORAD), war production sharing and the other deals
which subordinate this country to U.S. nuclear stra-

tegy.

In that sense, it is a win for the forces of peace. On Editor — SEAN GRIFFIN

Assistant Editor — DAN KEETON

Business & Circulation Manager — PAT O'CONNOR

Graphics — ANGELA KENYON

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Sie Re Rae

Debunking
Grubel’s low
wage myths

Walter Tickson, secretary Nanaimo and
District Labor Council writes: Herbert
Grubel, a professor of economics at the
Simon Fraser University and a mouth-
piece for the Fraser Institute philosophy,
in a speech to the Nanaimo Chamber of
Commerce made statements that are lack-
ing credibility. It is statements like those
made by Grubel that throw a dark shadow
of disrespect on the degree granting insti-
tutions. :

It seems that every time the bosses and
their place men in government want to
perform an unpopular act like cutting
wages and public services or justifying the
arms race they trot out a PhD ora general
on a speaking tour to lend support to the
unjustifiable proposition.

He claims that the reason for the lower ~
unemployment rate in the U.S. is that their
wage rates are lower. He says “if you want
to reduce unemployment you have to get
lower wages.” Then he goes on to say that
“in countries like Malaysia and Philip-
pines it is either 75 cents or a dollar an
hour or no work at all.” In other words he
suggests that Canadians reduce their
wages to the third world countries to be
“competitive.”

If low wages is the answer to prosperity
and full employment, why is it countries

like Brazil, Philippines, Mexico and other

Letters

Ac

third world countries in general are not
prospering? They not only have low
wages, they also suffer massive unem-
ployment. Low wages do not necessarily

~ cause lower prices on the short or long

run. Commodities produced in low wage
areas or high wage areas are sold on the
market at prices the traffic will bear. In
fact, prices of manufactured goods in low
wage countries are often higher than in the
industrialized countries.

To say as Grubel does that the U.S. rate
of unemployment is lower than Canada’s
because of lower wages is false on both
counts. First, the U.S. per capita income is
higher than Canada’s. Second, the lower
level of unemployment in the U.S. is the
result of a more extensive and highly deve-
loped manufacturing industry. Unemploy-
ment is always greater in countries where
manufacturing industry lags behind con-
sumption. Note, Ontario, for example,
with its manufacturing industry, has a
lower rate of unemployment than B.C. or
Newfoundland where there is very little
processing. The U.S. imports cheap raw
materials from Canada and sells us manu-
factured goods.

To eliminate unemployment Canada
must put the major sources of our raw
materials under public control; develop a
processing industry to manufacture con-
sumer goods to at least satisfy the home-
market; protect that market by tariffs or
quotas; and reduce the hours of work in
direct proportion to the jobs lost through

technological change.

Grubel doesn’t see it that way. He says
“if you want to reduce unemployment you
have to lower wages.”

If that were true, Newfoundland, Nova
Scotia and New Brunswick with their low
wages and 17 per cent-plus unemployment
should be below Ontario’s seven per cent.

If we were to accept Mr. Grubel’s sug-
gestion and allowed wages to drop to $2
per hour we’d destroy the home market.
How many shoes, shirts, cafe meals, groc-
eries, TV sets and other things that are sold
by the small and large private entrepre-
neurs would they sell to workers making
two-bucks an hour?.

Wake up Mr. Grubel and face facts. A
$2 wage rate is beneficial to the large cor-
porations extracting our raw materials for
export to their factories abroad, but it
would ruin the service industry. Your shoe

store, grocer and barber depend on the .

wages you earn and spend in their shops.
Capitalist profiteers spend only a small
portion of their huge profits on food and
shoes.

Budget for
corporations

Peter Ramsey, Victoria, writes: Iona
Campagnolo, Liberal party president, is
right in predicting that a middle class “tax

revolt” against the Tory tax attack will
arise but wrong in placing hope that this
will generate support for the Liberals.

The cuts expected in the budget turned
out to be less severe than originally
planned because the Tories feel that mid-
dle class support for “universality” and
social programs is still too high for a fron-
tal attack on the nation’s security.net. The
Tories hope to “tighten the screws” first
before undermining social programs that
benefit the middle class as much as work-
ing and poor people.

The Tories want to make social reforms
cost more and have made no effort to put
a dent in the $36 billion deficit.

Program and wage cuts will not restore
the economy. Tax breaks for corporations
may only speed-up the decline of what is
left of our raw material-based economy.

A “tax revolt”, like the infamous Pro-
position 13 in California, will only serve
the interests of U.S.-based multinationals
operating in Canada. Instead, we should
raise the slogan of “tax corporations, not
the people” and demand that government
create full employment and Canadian
control of our economy.

The Tories are searching for a method
of producing a mass base of support
amongst the middle class and parts of the
working class. Their cynical manoeuver-
ing and the attempt to force people to pay
for corporate give-aways may well result
ina cave-in for their electoral base. We can
push that along by convincing people that
jobs will stimulate the economy and pay-
off the deficit, not taxes and a “free lunch”
for big business.

4 e PACIFIC TRIBUNE, JUNE 19, 1985