LABOR: A Vicious Circle

Canada this year faces bleak economic prospects: inflation is running at an 11.1% annual rate, production growth seems likely to be zero, and unemployment is expected to rise from the current 7.2% to 10%. One major reason for all this is a peculiarly vicious circle: to keep up with inflation, workers have been demanding huge wage settlements that fuel further inflation. Strikes have also disrupted production enough to increase unemployment more than the recession alone would have done.

In 1974 Canada lost a total of 9.3 million man-days of work as a result of strikes. Among the 24 industrialized, non-Communist...

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