One of the most troubling aspects about the failure of our economy is our society’s great income divide. In his new column for the Star, Magna founder Frank Stronach shares ideas on how to fix it.
By Frank Stronach Contributing Columnist Tue., Jan. 18, 2022
When something is not right — it might be in your personal life or at work — you should know that you’ve got a problem. If you don’t know you’ve got a problem, then you’ve really got a problem. And problems are like cancer: if left unattended, they will grow.
I like to think I’m a pretty good problem solver. That ability to identify and solve problems has certainly helped me over the course of my business career. When I started out in business and opened my own one-man tool-and-die shop, I would hustle and go out knocking on doors looking for work. I would usually approach the foreman or manager of a business and ask them if they had any problems that needed fixing. Using this approach, I was able to drum up sales by promising my customers that I could solve their problems. I backed up my promise with an ironclad guarantee: if my customers were not satisfied, they wouldn’t have to pay me.
I started picking up more and more business along the way. I hired more employees and the small business I started in a rented garage at the corner of Dufferin and Dupont Streets ended up growing into Magna International Inc., one of the world’s largest automotive parts suppliers, with 160,000 employees in nearly 30 countries and annual sales of $40 billion.
That credo of solving problems for our customers became part of our corporate DNA, and we earned a hard-won reputation among the world’s biggest carmakers as the can-do auto parts supplier that could help them with any problem.
When I look around today and reflect on what are the biggest problems confronting us, there is one issue that in my mind rises above all the others — the economy.
The economy no longer works for the benefit of most people. And if the economy doesn’t function, nothing else will. Without a strong economy, we won’t be able to pay for social programs like health and education, and we won’t be able to take care of our elderly, the frailest and most vulnerable among us, or the poor and the homeless.
What is most troubling about the failure of our economy is the Great Divide that now exists in terms of income. The rich are getting richer, the middle class is shrinking, and the poor among us are growing in number, with few opportunities to rise up out of poverty. Overall living standards for most Canadians are declining, and have been for several decades now. As a result, a growing number of people are struggling to make ends meet.
In addition, more people are taking from the public purse in terms of subsidies, income supplements and welfare, and fewer and fewer are contributing to it. You don’t have to be a great economist to realize that a system like that can’t go on forever.
It’s no wonder so many young people are disillusioned. The cost of a college or university education keeps climbing, but there are fewer and fewer good paying jobs once students graduate. And no jobs means no hope. It’s almost impossible now for a young couple starting out in life to buy a house, especially here in Toronto or in many of Canada’s largest cities. It’s hardly surprising, therefore, that so many young people are turning to socialist policies and programs.
I’ve spent most of my life building and managing businesses, but I’m the first to admit that business is largely to blame for the state of the economy. The plain truth is that business has failed to let workers get a fair share of the wealth they help create.
So how do we go about creating more jobs, especially during a time of intensified global economic competition and the increased outsourcing of manufacturing jobs to low-cost, low-wage countries? And how do we create better paying jobs that would give Canadians a higher standard of living?
In the coming weeks and months, I’ll share many of those solutions with you. I will not only address some of the biggest issues our society faces — everything from climate change and taxes — but I’ll also put forward concrete, practical solutions based on seven decades of experience as an entrepreneur, a philanthropist and a politician. You may not agree with them. But they will certainly provoke your mind.