Wake Up True Capitalism!

By Paul Bertrand

November 25, 2014

A Special Report was released this week by TD Bank’s Senior Economist Craig Alexander stating that Canada is seeing a significant rise in inequality, and it’s getting worse.   Last two decades has not created the middle income earners higher compensation, compared to an increase at the very top earners.  We’re not talking about out of sync numbers, but enough to state that we may be heading towards the same level as down south.

It states the forces of globalization, technological advancement and policy shifts served to boost incomes of the wealthiest and well-educated.

 

The report has American Democrat Robert Reich, ex-Clinton Cabinet Secretary, warning us Canadians are heading towards the U.S. inequality path.  Socialist will have a hay day with this one. The report states that inequality can have a negative impact on economic growth stating that a 1% increase in inequality can decrease GDP growth by up to 1.1%.

It also suggests that government control, through tax system reform, may be the answer, which I find concerning as a solution. 

Is this causing us to question the capitalist economic model?  It gets me reflecting on what I was told as a child from my grade 4 teacher and never forgot.   She told the class of young boys and girls that people living in a communist country line up for their black winter boots and black winter coats, and everyone receives the same.

Much different than what my ancestors had in mind when they arrived in this beautiful, hardy country in 1643.  Individual hard work, innovation, motivation and a vision is what builds prosperity.  Is it not? 

The report states the following, “Unfortunately the core problem in Canada is that productivity growth has been very slow, which in turn constrained the income to be distributed across workers.”

Increasing productivity is a key factor is what I heard Mr. Alexander state in an interview with the CTV this morning. 

The need to boost productivity in an organization should be of top concern for business leaders, not government.  If not alone, the need to compete globally is ensuring that your workplace is effective, since those who figure it out will gain significantly. 
I truly believe that the senior executives and heads of HR that invest in improving management and workforce effectiveness will increase business growth and success. 

Are you aware that research done by Effective Managers™ and the Telfer School of Management at the University of Ottawa last year identified key findings that found a link between the effectiveness of an organization and the workers, correlating to productivity. 

The research found dimensions of accountability being critical to success and also found that a series of other measures have significant correlation to organizational effectiveness, hence increased productivity.

What is also interesting, is that the research and survey developed from Effective Managers™ helps an organization determine on how their workforce have clarity of their accountability, and the felt accountability, which I believe is getting closer to the root cause of not only productivity, but engagement. 

Business leaders now have a tool to determine their current state compared to benchmarks on key organizational effectiveness measures. So Canada, let us not get to the same level of inequality as others.  

Interesting to note that when retired President and CEO of TD Bank Group was questioned a couple of months ago if rich compensation packages for bank CEOs contribute to inequality, he was stated as saying: “I say that I should do the right thing with [the money] and give it to people who need it more than me ….”
Ed Clark as head of TD, demonstrated leadership towards philanthropy with funding to homeless shelters that support lesbian, gays, bisexual, transgender youth and a Toronto program called Homeward Bound to help single women and their children move from shelters to economic self-sufficiency.  Well done Mr. Clark, a true example of the strengths of capitalism.

Contact Canadian People Management to learn more on how you can be leading your industry, your organization, your team, to greater results. 

Paul Bertrand is founder of Canadian People Management Inc. which is based out of Pickering, Ontario. His company specializes in organizational effectiveness development through solutions tailored to strengthen his client’s cultures, leadership and teams. www.cpeoplemi.com