Category: Notable Linkage

Notable Linkage: Canadian Inequality: Recent Developments and Policy Options [PDF]


Our analysis of income inequality in Canada has produced several important findings that should guide any policy developments in this area. First, income inequality at the family level has increased substantially over the past few decades, and policy developments since the mid-1990s have likely reinforced rather than countered this trend. Second, the share of total income going to the top 1 percent has increased dramatically since 1980, mirroring trends in the United States. These high earners are mostly male and highly educated, and while many financial industry workers and executives can be found in the top 1 percent, so too can many professionals such as doctors. Third, the forces driving inequality are varied, ranging from technological change and off-shoring to institutional factors such as the role of unions and minimum wages. Fourth, we find that the experience of women is notably different from that of men; in particular, women have suffered less of the “hollowing out” of th…

Canadian Inequality: Recent Developments and Policy Options [PDF]


Notable Linkage: Asking the right questions: A guide for Municipalities considering P3s < Municipalities, Privatization | CUPE


In this guide, economist John Loxley takes a critical look at the case for and against using public-private partnerships (P3s) for municipal infrastructure. His analysis goes beyond the claims made by P3 promoters to examine the costs and consequences of privatizing vital community assets. Through a series of questions, Dr. Loxley outlines the problems that accompany infrastructure and service privatization, and highlights the value of keeping vital assets and services public. With growing financial and political pressure on municipalities to use P3s, this guide is a timely resource that answers key questions about financing and delivering infrastructure projects. With this guide, municipal councillors and civic officials will be able to ask the right questions before considering entering into a P3.

Asking the right questions: A guide for Municipalities considering P3s < Municipalities, Privatization | CUPE

Notable Linkage: Value for Money and Risk in Public–Private Partnerships – Journal of the American Planning Association – Volume 78, Issue 3


Delivering improved public services at lower cost, also known formally as value for money (VfM), is often the main rationale for procuring large infrastructure projects through public–private partnerships (PPPs). However, it is unclear whether the ex ante assessments of PPPs account for key planning concerns, including limitations on community consultation, contractual lock-ins that curtail public flexibility to make future plans, and a political preference for PPPs that may influence the way that projects are structured and evaluated. This set of questions is examined for 28 infrastructure PPPs delivered in Ontario, Canada, and interviews with18 senior political, government, and private-sector participants in the province’s PPP industry. We find that transferring of construction risks from government to the private-sector partners drives VfM results, and may overvalue the extent to which planning related risks can be transferred.

Value for Money and Risk in Public–Private Partnerships – Journal of the American Planning Association – Volume 78, Issue 3

Notable Linkage: How the Case for Austerity Has Crumbled by Paul Krugman | The New York Review of Books


It’s also worth noting that while economic policy since the financial crisis looks like a dismal failure by most measures, it hasn’t been so bad for the wealthy. Profits have recovered strongly even as unprecedented long-term unemployment persists; stock indices on both sides of the Atlantic have rebounded to pre-crisis highs even as median income languishes. It might be too much to say that those in the top 1 percent actually benefit from a continuing depression, but they certainly aren’t feeling much pain, and that probably has something to do with policymakers’ willingness to stay the austerity course.

How the Case for Austerity Has Crumbled by Paul Krugman | The New York Review of Books

Notable Linkage: Battle of the Wages: Who gets paid more, public or private sector workers? < Economics | CUPE


The recession and resulting public deficits have put a spotlight on public sector pay and compensation levels. Many governments have enacted pay freezes, pay constraints and are proceeding with contracting out of public services, partly on the perception that public sector workers are consistently paid more than those working in comparative jobs in the private sector. This study uses the most detailed comprehensive data available on earnings by occupation and finds the reality is quite different. Overall average pay in the public sector is very similar to pay for comparable occupations in the private sector. Public sector pay is also considerably more equitable, whether measured by gender, age, occupational group or by region.

Battle of the Wages: Who gets paid more, public or private sector workers? < Economics | CUPE

Notable Linkage: Dutch disease is dead, long live Dutch disease! |


In the hyper-polarized context of Canadian energy policy debates, even suggesting that there might be a downside to the untrammeled energy boom centred in northern Alberta is enough to get you labelled a traitor or an economic illiterate — or both. But what do the actual facts indicate? Bitumen boosters like to pretend there is a "consensus" among hard researchers that the Dutch disease hypothesis is false. In fact, the overwhelming weight of empirical evidence confirms that surging oil prices and exports have indeed contributed to the rise of the Canadian dollar, which in turn has indeed contributed to the decline of Canadian manufacturing.

Dutch disease is dead, long live Dutch disease! |

Notable Linkage: Why Does the Minimum Wage Have No Discernible Effect on Employment?


The employment effect of the minimum wage is one of the most studied topics in all of economics. This report examines the most recent wave of this research to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage.

The report reviews evidence on 11 possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners; and small price increases.

Given the relatively small cost to employers of modest increases in the minimum wage, these adjustment mechanisms appear to be more than sufficient to avoid employment losses, even for employers with a large share of low-wage workers.

Why Does the Minimum Wage Have No Discernible Effect on Employment?

Notable Linkage: How Canada Performs: Society details and analysis


Canada earns a “B” and ranks 7th out of 17 peer countries in the Society report card. Canada’s middle-of-the-pack ranking means it is not living up to its reputation or its potential.

Canada’s social performance has remained a “B” over the last two decades.

Canada’s “D” grade on the poverty rate for working-age people, and its “C” grades on child poverty, income inequality, and gender equity are troubling for a wealthy country.

How Canada Performs: Society details and analysis

Notable Linkage: The Decline of Unions is Your Problem, Too |


First, the fact is that when unions are stronger the economy as a whole does better. Unions restore demand to an economy by raising wages for their members and putting more purchasing power to work, enabling more hiring. On the flip side, when labor is weak and capital unconstrained, corporations hoard, hiring slows, and inequality deepens. Thus we have today both record highs in corporate profits and record lows in wages.

Second, unions lift wages for non-union members too by creating a higher prevailing wage. Even if you aren’t a member your pay is influenced by the strength or weakness of organized labor. The presence of unions sets off a wage race to the top. Their absence sets off a race to the bottom.

Unfortunately, the relegation of organized labor to tiny minority status and the fact that the public sector is the last remaining stronghold for unions have led many Americans to see them as special interests seeking special privileges, often on the taxpayer’s dime. This think…

The Decline of Unions is Your Problem, Too |

Notable Linkage: Progressive Tax Options for BC


British Columbians are ready for a thoughtful, democratic conversation about how we
raise needed revenues and ensure everyone pays a fair share. This report examines the case for
tax reform, highlighting the ways in which BC’s tax system has become increasingly unfair. It
compares BC taxes to other provinces. And it models various provincial tax policy options, focusing
mainly on personal income taxes and corporate taxes. A final section refutes some of the
common arguments against tax increases.
The overall finding: There is a clear need to raise more tax revenues. There is considerable room
to do so. And the options for doing so are many.

Progressive Tax Options for BC