The Leader of the Opposition, Tom Mulcair, is to be congratulated for his proposal to re-introduce a federal minimum wage.
Abolished in 1996, the federal minimum wage applied to the approximately 8% of all employees who work in federally regulated industries. It also used to set a national benchmark for provincial minimum wages. Mr. Mulcair's proposal is in line with the 2006 Federal Labour Standards Review that was appointed by the Minister of Labour and led by Harry Arthurs, a distinguished labour law expert who was Dean of Osgoode Hall Law School and, later, President of York University. Professor Arthurs, who recommended that a federal minimum wage be re-introduced, argued that “the government should accept the principle that no Canadian worker should work full-time for a full year and still live in poverty... this is an issue of fundamental decency that no modern prosperous country like Canada can ignore.”Read more
Best-selling author Thomas Piketty argues in his book, Capital in the Twenty First Century, that inequality is set to return to the extreme levels of the “Gilded Age” of the late nineteenth century when very large shares of income and wealth were concentrated in the hands of the super rich. And he is far from alone.
In a gloomy long-term prognostication, Policy Challenges for the Next Fifty Years, the OECD, the major think-tank of the advanced economies, anticipates that the incomes of those at the top will continue to grow much more rapidly than those at the middle and bottom.Read more
Leader of the Opposition Thomas Mulcair has launched a new round of debate over the need for a national child care and early learning program. The NDP poposal would help the provinces to finance quality, affordable child care systems, delivered by regulated providers in place of the current patchwork quilt of formal and informal care of varying price and quality.Read more
With the federal budget set to return to balance this fiscal year, we can once again debate how to deal with future surpluses. Priority could be given to paying down the debt, cutting taxes, or re-investing in public services and social programs.
These options should be judged on how much they contribute to a stronger economy as well as a fairer and more inclusive society.Read more
For all of the self-congratulatory rhetoric of the Harper government, the fact remains that Canada’s economic recovery has been built on very fragile foundations. Growth has been fueled by the growth of household and foreign debt rather than by business investment, and we have become dangerously reliant on the resource sector.Read more
The recent collapse in the price of oil begs the question of whether Canada, yet again, is going to enter the bust phase of a classic boom-bust resource cycle. There is much to fear.
Earlier this year, the Canadian Centre for Policy Alternatives released a collection of essays marking the fiftieth anniversary of the publication of a Canadian economics classic, “A Staple Theory of Economic Growth” by Mel Watkins.Read more
One of the perks of the position of the Governor of the Bank of Canada, going back to at least the days of David Dodge, is that it provides a bully pulpit to weigh in on economic issues of wider public interest than monetary policy. This is appropriate given the broad context within which the Bank operates, but, as Stephen Poloz now knows, the ability to gain widespread public attention comes with a downside.
Governor Poloz was widely criticized recently for his suggestion that unemployed young people should volunteer or consider working for free in order to improve their longer term prospects in a poor job market. Outraged youth rightly noted that it is only the children of the affluent who can afford to work for free, and that unpaid internships are often highly exploitative.
Twenty-five years ago, the House of Commons unanimously passed Ed Broadbent's resolution to abolish child poverty by the year 2000. We are far from that goal.
Child poverty as measured by the Statistics Canada Low Income Cut Off has fallen since 1989, meaning that the proportion of families forced to spend a well above average share of their budgets on food, clothing and shelter has diminished somewhat.
But it is a different story if we use the low income measure, which looks at the gap between poor children and the middle class, calculating the number of children who live in a family which has less than one half of the income of a comparable middle income family.Read more
Canada’s new Ecofiscal Commission, chaired by McGill University macroeconomics professor Chris Ragan, has a mandate to propose reforms to the fiscal system that reduce pollution and environmental damage while also increasing economic efficiency.
The core idea is to move towards a polluter-pay approach, whereby environmental costs are reflected in the market prices of economic activities. By taxing polluting activities, eco-fiscal policies incentivize actions that reduce harm to the environment and generate new revenues that could be used to reduce other taxes.
Understanding what has been happening in recent years with income inequality in Canada is vitally important.
What do we know, for example, about the incidence of low income and poverty, or the impact of taxes and income transfers on the level and distribution of family income? What are the differences in income across provinces, or between different kinds of families, such as seniors and lone-parent families? More pressingly from a public policy perspective, what difference has government policy made to the economic well-being of Canadian families and to the fairness and equity of Canadian society?
Answering these questions relies on having sound data that are reliable and comparable over time.Read more
Wages in Canada and the other advanced economies are about as flat as left-over champagne in the glass on New Year's Day. This poses a major threat to a sustained economic recovery.Read more
During the four years from 2009 through 2013, average hourly wages adjusted for inflation rose by a grand total of just 2.3%, or by about one half of 1% per year. Real wages rose by a total of only 0.9% in Ontario and 1.1% in Quebec over those four years, though by a healthier but still unimpressive 4.8% in Alberta.
Economists take a benign view of the impact of technological change on jobs, dismissing the "Luddite" view that technical progress can be a significant cause of unemployment. The core argument is that higher productivity (output per hour worked) drives increases in incomes so that demand rises, creating new jobs as old ones are destroyed.Read more
That said, it has become the conventional wisdom that there are winners and losers from the new information based, digital technologies, and that these have been an important factor behind rising income inequality since the 1980s. “Skill biased technological change” is held to benefit the highly educated since technology generally complements cognitive skills, while it eliminates many less skilled jobs.
The Harper government claims to be good economic managers pursuing a successful jobs and growth agenda.
To be sure, there are many factors other than federal government policy that strongly influence Canadian jobs and incomes, such as resource prices, business decisions, the state of the United States and the global economy, and the actions of provincial governments. No federal government can take all or even most of the credit or blame for how our economy is doing.Read more
The words “industrial policy” have been virtually banned from polite company, and should certainly never be uttered in the presence of small and impressionable children.
Many mainstream economists and conservative think-tanks believe that governments should seek only to create a favourable business climate through low taxes and light regulation, and should not intervene in the investment decisions of private corporations.
And yet, industrial policy (which should be called strategic economic policy) persists, and arguably has a greater impact on investment and jobs than broad framework policies like deep corporate tax cuts.Read more
Glance at just about any publication from the Fraser Institute and other conservative think tanks, and you will be told that too much government social spending and too much regulation of the job market damage growth and job creation. There is, we are told, an ineluctable trade off between social equity and economic efficiency.
Yet this does not readily show up in international comparisons. Germany and some Northern European countries have built highly productive economies and enjoy low unemployment despite being much more equal societies than the United States or Canada.
There is also little evidence of an equity-efficiency trade-off within Canada. Consider the case of Quebec's social and economic performance compared to other provinces.
Young people lag behind in Canada's economic recovery, with rates of unemployment and underemployment still significantly above pre-recession levels. The danger is that this will have a permanent scarring effect on many youth, with long-term negative implications for both our economy and our society.
It is often forgotten that Canada still has a large “echo baby boom” youth age cohort, with some 4.4 million persons age 15 to 24 now transitioning into the paid work force. They will all be needed in a few years just to replace “baby boomer” retirees, and our economic prospects will be brighter if our future work force gains relevant skills and experience today.Read more
Matthew Behrens, Editor (for the Canadian Foundation for Labour Rights). Unions Matter: Advancing Democracy, Economic Equality and Social Justice. Toronto. Between the Lines. 2014.
This excellent book on why unions and a strong labour movement are essential building blocks of a sound economy and of a just and democratic society deserves to be widely circulated. It is accessible to individual labour activists who wish to deepen their understanding of the role of unions – both inside and outside the workplace – and should be widely adopted for use in post-secondary labour studies courses and union educational programs.Read more
In his now famous book, Capital in the Twenty-First Century, Thomas Piketty argues that there is a strong tendency for wealth to become concentrated in ever fewer hands unless the economic forces promoting greater inequality are countered by deliberate political choices.Read more
The OECD Economic Survey of Canada released today calls for tax reforms which would increase government revenues while also reducing inequality, specifically calling for changes to preferential treatment of stock options.Noting that income inequality in Canada is above the OECD average and has been rapidly rising in recent years, the organization states that "there is also scope for the federal government to increase efficiency and reduce income inequality by further reducing tax expenditures that benefit relatively higher income households, such as... preferential treatment of stock options” (p. 38).Read more
Data from the 2011 National Household Survey (NHS) which replaced the long- form census indicate that racial status remains a significant factor in shaping advantage and disadvantage in the Canadian job market and in influencing the overall level of poverty and income inequality.
Put bluntly, non-whites do significantly worse than whites, in part because of racial discrimination.Read more
Andrew Jackson is the Broadbent Institute's Senior Policy Advisor.
In September, 2012 he retired from a long career as Chief Economist and Director of Social and Economic Policy with the Canadian Labour Congress.
In 2011, he was awarded the Sefton Prize by the University of Toronto for his lifetime contributions to industrial relations. Educated at the University of British Columbia and the London School of Economics and Political Science, where he earned a B. Sc. and an M.Sc. in Economics, Andrew is the author of numerous articles and five books, including Work and Labour in Canada: Critical Issues, which is now in its second edition with Canadian Scholars Press.