On September 16th, Preston Manning published an article on the recent defeat of the Australian Labor Party (ALP) at the hands of the conservative Liberal-National coalition in the Globe and Mail. Left-wing governments destroy healthy economies, he told us, they 'binge' on stimulus spending, are soft on unions, govern badly and can’t manage environmental policy.
The high-profile Toronto Centre federal by-election features two well-known opposition candidates who agree that soaring income inequality, especially the fast-rising income share of the top 1% with all of its well-documented negative effects, is the defining political issue of our times. At issue is what we should be doing about it, through changes to public policy.
In thinking about this question, it is useful to distinguish between policies that affect the distribution of income by the market (called predistribution) and policies that make incomes after taxes and transfers more equal than market incomes (redistribution).
Every month, Statistics Canada comes out with the unemployment rate, and every month it gets a lot of attention. But the unemployment rate provides quite limited information about the actual health of the labour market.
The addition of two other pieces of information nearly doubles the unemployment rate: the proportion of the labour market employed part-time but looking for more work, and the proportion that would like a job but aren’t actively looking for work, and so aren’t officially counted as being in the labour market.
A new study by the Fraser Institute argues that introduction of anti-union “right to work” laws in Canada would boost manufacturing output and jobs. While they are right that these laws, which make dues payments voluntary, severely weaken unions, it is far from evident that unionization comes at the cost of poorer economic performance.
This is because collective bargaining has benefits for employers as well as for workers, and because collective bargaining outcomes reflect economic realities.