Life After the Bubble Burst

On the Michael Coren Show, Canada's political and ethical roundtable, the panel discussed a report that claimed that 1/6th of all Ontario children live in poverty. Mr. Coren was of the opinion that poverty was quite rare in Ontario. People, he said, emailed him to say they were poor but computers are a luxury. If they could afford a computer, it was proof that they were not poor and didn't understand what true poverty is.

This is a strange economic time in Canada. While the unemployment rate is the lowest in many years (CTV), Statistics Canada reports that 2/3rds of aged 25-54 Canadians are underemployed or are working under substandard conditions (CTV). According Robert Wright (as discussed in my Linux Startup book), the post World War II generation has exploited both their parents and their children for material gain. During the time of the Great Depression in the 1930's, Canadian families pumped over 1 trillion dollars into the next generation so they wouldn't do without. The baby boomer generation, with its hedonistic world-view, retired on the money instead of reinvesting it in the future, leaving Generation X with high unemployment, unpaid education debt, lower income and higher cases of suicide. As more and more older people retire from the work force, the true damage to the Canadian economy is slowly being being unmasked.

A friend of mine with a university degree who moved to Venezuela recently returned to Canada because he couldn't find work in South America. After trying for two years to get a job which paid enough to support his family, he announced that things were worse in Canada than Venezuela. He return to Venezuela...the cost of living was cheaper there.

The city of St. Catharines, Ontario, once an auto industry town, has become what he described as "the call center of Canada". The trouble with call centers is that there are always countries with lower minimum wage standards. The call center will only exist while the workers will play the income limbo dance--how low can you go.

Mr. Coren's view that computers are a luxury was true at one time. However, today the ability to use a computer is a measure of literacy in Canada (Statistics Canada). Second-hand computers can be acquired for less than $100 and the cost of email access is often cheaper than the phone or hydro bill. Computers are so common that they are necessary to produce resumes and look for work. Computers are so cheap and ubiquitous they are no longer a sign of status. They are a basic appliance, like a toaster.

I know true poverty. I have a friend who runs a homeless shelter. It maybe be true that there are poorer countries in the world, but there is still a price for survival. Death in a Canadian winter because there is no work is every bit as fatal as death from lack of food.

One of the hardest hit markets in recent years is the IT sector. After the "tech bubble" burst in 2001, tens of thousands of IT professionals were laid off in Toronto. Some welfare and job hunting agencies introduced special efforts to handle the load of out-of-work programmers. In 2006, perhaps because of the glut of skilled labour, interviews are on the rise--but, ironically, not job positions. In many cases, company human resource departments now call in dozens of candidates for a single position and go through a multi-tiered hiring process. Although there are more "interviews", there isn't more work. To land a job interview no longer means that you're a finalist for a position.

One of the reasons I formed PegaSoft was to create a support system for software developers. At the monthly meetings, we discuss industry trends and have presentations on Linux technology. By pooling resources, consultants have a better chance to land good contracts in an uncertain economy.

My advice to new graduates in computer science: move to Venezuela. At least they have nice beaches down there.

Talk back on the Linux Cafe.

April 17, 2006 

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