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Good that he is aiming for a boom and not just touting as an achievement of his proposed policies what would happen anyway. ;-)

One question: How was population growth in Ontario during the last decades? If the population grew over time, 125,000 new jobs per year could simply mean the ratio employed to unemployed would stay the same. (I doubt it but still: Looking from that angle the announcement may sound less impressive.)

Odie:
From 1976 to 2013, Ontario's population grew 61 percent while employment grew 84 percent. For 1990 to 2013, population grew 32 percent while employment grew 32 percent.

This is off topic… I know where there are a million vacancies in Canada. They’re here…

Employers expand numbers employed to the point where the product of the marginal worker equals the minimum wage, union wage, etc. I.e. there are loads of jobs with a product below that level. So… all we need to is offer the unemployed to employers at a subsidised rate or for free. Hey presto: a million jobs are created.

Of course it would be necessary to ensure as far as possible that the subsidised people had a sub min wage product: i.e. that they were not viable without the subsidy. That can be done as follows: limit the duration of the subsidy for a given employee in a given job to about one month. Thereafter the employer has to decide whether the employee is viable without the subsidy or not. If not, the employee leaves, and hopefully moves to another subsidised job. But if the employer thinks the employee is viable, the employee stays and the subsidy ceases: i.e. the employer pays the full cost of employing the employee.

Ralph,

So… all we need to is offer the unemployed to employers at a subsidised rate or for free. Hey presto: a million jobs are created.

With the subsidy presumably coming from taxpayers? This fails the Multiplier Test, aka the Profitability Test. Even left-wingers like me don't like money-sinks. We want to see some benefit. We're flexible about that, but it has to be decent like human health, education, or national defence. Your little proposal does none of these things.

A month isn't even enough time to get past the introduction for most jobs.

You've also got the fallacy of flexible prices. There are some rather sticky absolutes, like housing, transportation and food. Complete price flexibility is a myth.

And right-wingers say left-wingers don't live in the real world. Sheesh.

Determinant,

Re the “subsidy coming from taxpayers”, taxpayers are forking out unemployment benefits anyway, so there’d possibly be no additional imposition on taxpayers. Re “we want to see some benefit”, the benefit consists of otherwise unemployed people doing SOME SORT of work, if not the most productive work in the world.

Re a month not being long enough to “get past the introduction for most jobs”, a month is long enough for an employer to gauge whether someone has potential. Plus these jobs are by definition, entry level, simple jobs: very little “introduction” needed.

Re the idea that right wingers wouldn’t like it, it actually has an aspect that would appeal to right wingers, as follows. In a totally free market, i.e. in the absence of unemployment benefit which is not a free market phenomenon, the unemployed would to a greater extent that currently obtains, get themselves temporary and low paid jobs pending something better. That’s what the above system does, but in a more humane way than in a totally free market.

Anyway, thanks for reading my “off topic” comment. I didn’t think anyone would.

Re a month not being long enough to “get past the introduction for most jobs”, a month is long enough for an employer to gauge whether someone has potential. Plus these jobs are by definition, entry level, simple jobs: very little “introduction” needed.

No, the Employment Insurance fund is paying out benefits, and EI is not a tax, it is a premium. Income tax is a tax. CPP and EI are NOT Payroll taxes, they are premiums. Is a group health plan premium a tax? No, and neither is CPP.

Re the “subsidy coming from taxpayers”, taxpayers are forking out unemployment benefits anyway, so there’d possibly be no additional imposition on taxpayers. Re “we want to see some benefit”, the benefit consists of otherwise unemployed people doing SOME SORT of work, if not the most productive work in the world.

And no, a month is barely enough for training. Even for $10/hour jobs (that was the call centre I worked at). That call centre took three months training before they could put you on the floor.

In a totally free market, i.e. in the absence of unemployment benefit which is not a free market phenomenon, the unemployed would to a greater extent that currently obtains, get themselves temporary and low paid jobs pending something better.

There is such a thing as involuntary unemployment, we have it now to a very, very large extent in Canada. The Beveridge Curve figure from Statscan says there are six applicants for every vacancy; therefore at best five people go home disappointed. Unemployment benefits don't enter into it. Your entire paragraph is fallacious and based on a false choice which does not actually exist.

$2/hour doesn't feed a single person, let alone a family. It is not as if the poor are being greedy, they are being realistic. It is the rich that have the fantasies.

It's not a particularly ambitious target (with a reasonable spell of growth, he'd end up in the ballpark of a million new jobs), though it's a politically astute move - a rarity for Hudak - to get something like that out well before the election and to start tying it into his platform. His problem has always been that he's let the Liberals define who he is, rather than trying to sell himself to voters on his terms.

In terms of his policy proposals, the big one in terms of trying to create manufacturing jobs will be keeping energy costs down (we talk a great deal about how the manufacturing sector in Ontario has been hurt by the rising dollar, but we've shot ourselves in the foot with a government created crisis in the energy sector - a somewhat remarkable achievement in the sense that the government has managed to both subsidize the bejesus out of the production of electricity while also driving costs up. Usually, you try to subsidize something to keep costs low). Of the others, promoting skilled trades, reducing business taxes and promoting inter-provincial free trade (yeah, good luck with that, but more power to him), they're all sensible policies, but they won't be game changing policies. Cutting red tape, fine in theory, but what does that mean in practice? That's kind of a motherhood and apple pie promise, the right-wing equivalent of the left-wing "tax the rich and corporations" promises, full of sound and fury, but often signifying nothing. Cutting debt, fine, but possibly inconsistent with creating jobs (if the mechanism for cutting debt is cutting public sector employees - though as I've suggested before, the proper mechanism should be cutting public sector compensation. My wife will kill me if she reads that).

Of course, the best possible policy, in terms of creating jobs (although not necessary prosperity), and one previously used successfully by both the Harris and Chretien governments is to have the good fortune to get yourself elected at a time when the bottom falls out of the Canadian dollar. Ok, that's not so much a policy as a coincidence, but on that front, given the recent decline in the value of the dollar, Hudak may finally be getting a break if he can push the Wynne government out of power in the spring.

"Is a group health plan premium a tax? No, and neither is CPP."

If my employer doesn't pay my health insurance premium (or deduct from my salary to pay it) it doesn't face a spell as a guest in one of her majesty's charming prisons. If it doesn't pay my EI premiums, on the other hand... In practice, the distinction between a "tax" and a "mandatory government impose premium enforceable with criminal sanctions" is pretty fine. Case in point, to your health insurance premium point, the US Supreme Court uphold Obamacare, at least in part, under the US federal governments taxation powers. So who says a group health insurance premium can't be a tax?

"Even left-wingers like me don't like money-sinks. We want to see some benefit. We're flexible about that, but it has to be decent like human health, education, or national defence. Your little proposal does none of these things"

Except, if I'm understanding Ralphs proposal, it's a variant of the guaranteed minimum income proposals, perhaps structured as a form of earned income tax credit (i.e., if you earn any income, the government bumps you up to the minimum). Conceptually, it's great. It allows people whose productivity would otherwise cause them to be unemployable to nevertheless contribute to, and participate in, society while enjoying some minimum level of income. Hard to see why lefties would object to that. The difficulty is in the operation, and in practice, if you set the subsidy at, say, $10 an hour, you'd have a whole lot of jobs at $0.01 an hour (just as we see, now, a spike at $10 an hour)and nothing under $10. And the practical reality is that it would never work as a one-off, because some people really do have low-productivity - i.e., their labour isn't worth more than $10 an hour - so a temporary subsidy wouldn't do anything for them.

Quite true, on your second paragraph. On your first,

If my employer doesn't pay my health insurance premium (or deduct from my salary to pay it) it doesn't face a spell as a guest in one of her majesty's charming prisons. If it doesn't pay my EI premiums, on the other hand...

(a) Your employer forces you to pay the premium, you can pay or you can quit, so there is still compulsion combined with a penalty coupled with

(b) The insurer will terminate coverage if you don't pay, leaving you without drugs, etc.

There's nothing voluntary at the individual level here, and for many people to do without their drugs is worse than prison. I'm a diabetic, I can survive prison, but not without insulin.

It's the classic problem of the Right seeing voluntarism where there is none. A spade is a shovel.

BTW my NDP Riding Association nominated our provincial candidate because everyone and his brother expects a provincial election this spring.

While I'm on NDP, there's a fascinating post on the comparative economics Federal and Provincial NDP donation structures and the incentives and disincentives each creates for a Riding Association. IMO the Federal Party is great for donations, the Ontario NDP is a useless pile of nitwits.

This strikes me as a big gamble. The main lever a provincial government has for creating employment is fiscal policy. I doubt Hudak is either able or inclined to spend his way to a million jobs, and as Bob points out, the other items on the list are small potatoes. So he's basically gambling that the $CDN tanks and the US economy booms, neither of which he has any control over.

I wonder if such grandiose promises are really needed? At this point, from my vantage point in AB, it seems to me that Ontarians might be pretty happy with a little bit of quiet competence for a term or two. No need for big plans, just promise not to be a f***-up.

In any case, if we get a couple of repeats of the last employment numbers, I think people will be happy to latch on to anyone who claims to be able to do something, anything, to right the vessel.

"if you set the subsidy at, say, $10 an hour, you'd have a whole lot of jobs at $0.01 an hour"

Maybe if the subsidy wasn't tied to wages, but was done like a negative income tax on a per household basis instead? Per household would allow consideration for kids and the elderly too (though they do OK with all the programs aimed at them). Employers wouldn't so easily be able to play the system then, as they would have little idea about household income. And IIRC, Stephen pointed out that there wasn't a strong correlation between poor households and minimum wage earners anyway, so it'd solve the problem we actually have (poor households), rather than randomly spreading money around and hoping it hits the target.

Seems to me to be a no-brainer for the small-c conservatives who care about poverty. People know best what they need, so give them money, not nanny state intervention.

Determinant,

The distinction between a tax and an insurance premium is very semantic when the insurance premium is COMPULSORY. You could classify the taxes that people pay to maintain the military as an insurance premium to deal with the threat of being invaded by another country. But that re-classification is a waste of ink and paper I think.

Re training time, there is a system up and running in Britain called the Work Programme which is similar to my suggestion. Someone on that programme said that training time to work as a check-out person in a supermarket was 3 hours. Search for “3 hours” here:

http://www.thestudentroom.co.uk/wiki/experience_of_supermarket_jobs

Re $2/hr, I’m not suggesting that TAKE HOME pay should be that low: I’m saying that the cost to the employer of using the relevant labor should be that low (or even zero).

Bob Smith,

I accept that the administration costs of my suggestion might exceed the output of subsidised employees (if that’s what you’re saying). Certainly the costs of the UK’s Work Programme are ridiculously high: though I think if I ran it, I could cut costs substantially.

Re your final sentence, I quite agree that my system would do nothing for the SERIOUSLY untalented: the people whose labor will never be worth more than $10/hr or whatever. However, the system does cater for those whose skills are TEMPORARILY not in demand. Incidentally the Swiss implemented something along these lines a few years ago. See:

http://www.iza.org/iza/en/papers/transatlantic/1_lechner.pdf


Patrick,

Well the great thing about politicians is that making long-term promises is never a gamble for them, since by the time they're proven wrong they've been in power for a decade. In any event, politics is as much about the sizzle as the steak, so it's worthwhile for him to be framing his platform (which, let's face it, he'd be trying to implement even if we had full employment) as being part of a broader job creation strategy, since it's not like the Liberals can run on a message (oh, you want to create a million new jobs? Why haven't you been trying to do that over the last decade?) and since the other parties are going to attack you anyhow, no harm in having them attack you "million jobs plan".

In terms of job subsidies, the thing is employees wouldn't necessarily have to know family income (although, let's face, for a lot of people employers can figure it pretty quickly) to exploit the system, they could simply offer up jobs with low wages and people eligible for the subsidy would be induced to accept them.

But I do agree that this sort of program (or something like it) is preferable to either a minimum wage or the sort of "living wage" mandates you see across the country (and I see the Fraser institute has a study out on that), both because it actually targets the poor and because it recognizes the question of what minimum income we think people should have is a distinct question from how their labour should be priced. If we believe, as a society, that people should have a certain minimum income, which can't be achieved at the market price of their labour, surely the burden should be on society as a whole to make up that gap, not to monkey around with the price of their labour to try to shift that cost to their employer or consumers. The "living wage" mandates drive me nuts in that they effectively say "we believe that everyone - well, everyone who works for our contractors, not the dude working at McDonald's - deserves a living wage and, of yes, we expect you, Mr Contractor, to pay for it (because we apparently don't think that those costs won't be passed on to us through higher prices which will diminish the quality of public services we can provide)".

It's not one of the 5 points in Hudak's plan but perhaps he would also hope for job gains if he follows through on the systemic changes to Ontario's labour laws he has mooted? What sort of job gains might result from Ontario becoming a right-to-work jurisdiction?

I suspect that plan is part of the "red tape reduction" initiative. In practice, I'm not sure how significant a right-to-work rule would be in terms of creating jobs (although I can see supporting it on other grounds, notably breaking the monopoly of public sector unions on the provision of public service). Only a tiny fraction, something like 16%, of the private sector is unionized and while, I suppose, one might argue that the threat of unionization might discourage potential employers from setting up shop in Ontario, equally the threat of departing to a right-to-work state would discourage unionization (or, in the event of unionization, restrain demands). And funny how, every time a company sets up shop in a "right-to-work" state, that investment is usually accompanied by hefty subsidies and tax incentives (suggesting that "right-to-work" laws, on their own, aren't a sufficient selling point to create jobs.

That so-called public sector union monopoly is largely teachers, nurses and police. Sure, let's de-unionize them and create more lower-salaried jobs under those categories -- if creating more jobs is the criterion. But somehow I don't think Hudak is thinking that way.

Looking at that chart, there have been about 13 out of 36 years of 125,000+ jobs created. And only once was there a five-year sequence of 125,000+ jobs in the whole period. So it's pretty much an empty promise, particularly if red tape reduction, encouragement, and interprovincial trade increase are the basis for his plan.

But I agree, it's good politics.

"That so-called public sector union monopoly is largely teachers, nurses and police. Sure, let's de-unionize them and create more lower-salaried jobs under those categories -- if creating more jobs is the criterion"

I was thinking keeping costs down -I'm not sure we need more police officers.

"And only once was there a five-year sequence of 125,000+ jobs in the whole period"

Right, but there were at least two 5+ year sequences that averaged more than 125,000 jobs a year (1984-1989, and 1995-2003). All he needs to do is average 125,000+, not top it. 125,000 new jobs a year seems to be, at least over the past 30 years, more or less the norm during the growth phase of the business cycle. Considering Ontario's larger population/economy now (such that 125,000 new jobs means a lot less than it used to) that's an even easier accomplishment. You're right that it's an empty promise, not because he won't achieve it, but because he'd have to try hard not to.

I'm sure, however, he will point out that the last time Ontario averaged 125,000 jobs a year was when the Tories were last in power.

Previous Ontario employment booms were facilitated by significant gains in labour force growth.

The 1984-1989 the part rate went from 76 to 80. 1995-2003 went from 76 to 79.

The Ontario part rate is currently a middling 77.6. Given current demographics it's actually fairly high. As labour force growth continues to slow, or even decline, I don't see how we could even come close to getting the previous gains.

I'm not expecting to repeal the FTA or push the loonie down to the mid-70s again.

The late 90s saw Ontario real GDP growth in the mid to high 5% range and was low 4% between 1994-2002. Would anyone plausibly expect that to happen? As a professional economist, if someone came up to me and presented that plan as their baseline for the next 8 years they would have significant difficulty defending it.

But this policy isn't for professional economists.

Ralph:

The distinction between a tax and an insurance premium is very semantic when the insurance premium is COMPULSORY. You could classify the taxes that people pay to maintain the military as an insurance premium to deal with the threat of being invaded by another country. But that re-classification is a waste of ink and paper I think.

No, it's not a waste of ink, nor is it semantics. The failure to distinguish between a premium and a tax is one of the (many) intellectual failures of the Right. A premium is tied directly to benefits, a tax is not. Income taxes are not "military insurance" because you are defended as a citizen of Canada, regardless of whether you pay taxes or not. Just as access to the police is not related to whether you are a taxpayer or not.

You don't get CPP unless you contribute to it, and the benefit you receive is tied to your earnings and contributions. EI is likewise a premium, you get benefits under stated conditions, and if you think EI is bad at paying out, then those "Accidental Death" policies flogged on television are ten times worse. (Just because a death is unexpected and unfortunate does not mean its accidental, which is why I don't think much of those policies.)

Defence is paid our of General Revenues, but like most government services like law enforcement, regulatory enforcement and education (actually most government services and functions) you get them because you live here and have status here, not because you pay taxes. The liability for taxes is entirely separate and does not create entitlement to services.

"You don't get CPP unless you contribute to it, and the benefit you receive is tied to your earnings and contributions."

So if we limited access to public health care to people who pay income tax, it would cease to be an income tax and become a health insurance premium? Boy, talk about semantics.


"Given current demographics it's actually fairly high. As labour force growth continues to slow, or even decline, I don't see how we could even come close to getting the previous gains.

I'm not expecting to repeal the FTA or push the loonie down to the mid-70s again"

Has Ontario's population growth slowed? Sure, we have an aging population, but Ontario (last I heard) still continues to attract immigration. And while demographics are changing, so is labour force behaviour (i.e., working past 65). Certainly, the Ontario government predicts that its population will continue to grow at a pace of 150,000+ per year over the next 20-odd years (http://www.fin.gov.on.ca/en/economy/demographics/projections/projections2011-2036.pdf), largely due to immigration. It's true that the RATE of labour force growth is projected to slow vis-à-vis the historical rate, but we're starting from a larger base. What matters for Hudak are the raw numbers, not the rate. That's what makes his policy so unambitious. Had he promised to create jobs at the same rate as the late 1990's, I'd agree with you. But he hasn't.

So if we limited access to public health care to people who pay income tax, it would cease to be an income tax and become a health insurance premium? Boy, talk about semantics.

What semantics? Income Tax goes into the Consolidated Revenue Fund. Now if we limited health care to those who paid a Medical Services Tax which was x% of your income, then that "tax" would in fact be a premium. And the difference between an occupational pension contribution is.... nothing.

In fact in your example Bob, the portion of the tax which covers the health expenses would in fact be a premium. In fact, this is how it's done in BC with the Medical Services Plan. That's the only Medicare premium left in Canada and the only one that is deductible from federal income tax.

I'm quite clear: taxes are assessments to pay with no concurrent entitlement to services or benefits. A premium confers a benefit. Much as you think they do, your income taxes don't give you rights to access law enforcement or other state services. You get that just by being a citizen. A tax just pays the bills.

"Now if we limited health care to those who paid a Medical Services Tax which was x% of your income, then that "tax" would in fact be a premium. And the difference between an occupational pension contribution is.... nothing."

So the difference between a "tax" and a "premium" is based on the eligibility criteria for social programs? That's what your saying.

Moreover, in your example of income tax and health care, liability for income tax is based on "residence", so is entitlement to health care benefits. If you're ordinarily resident of Canada, you're liable for income tax (your actual liability for tax may be nil, but you are a "taxpayer"). If you're ordinarily resident in a province (and therefore in Canada) you're entitled to health care benefits (health care entitlement is based on residence, not citizenship. If you're liable for tax in Ontario, you're entitled to health care. Does the fact that income tax liability and health care entitlement have the same underlying criteria (residence) cause the former to be "premium" rather than a tax.

And of course, on your criteria, EI would not be a "premium" for many employees since a good portion of the people who pay EI "premiums" are not entitled to any benefit (part-time workers, contract workers). Similarly, employer CPP and EI "premiums" must be taxes, since the benefits of CPP and EI accrue to their employees, not them. Employers aren't entitled to claim EI or CPP. Are employee CPP and EI "premiums" premiums while employer CPP and EI "premiums" are taxes?

More to the point, the payment of a CPP or EI "premium" doesn't afford individuals any rights against the government, those rights are conferred by legislation which can be amended unilaterally from the government (in contrast to insurance premiums, where payment of a premium gives rise to contractual rights which, generally, cannot be amended unilaterally by an insurer). You can pay CPP or EI premiums for years, only to be told that rules have changed and you're not entitled to a dime. That doesn't happen for political reasons, but there's no legal impediment to doing so.

The distinction between "premiums" and "taxes" is a semantic one. Politicians prefer to levy "premiums" because people don't like "taxes" and they figure voters are too dim to tell the difference.

Thoroughly false Bob, and I thought you had better logic skills. Residence in Ontario is part of what makes one liable for Ontario income tax, but so is having sufficient income. The many people who don't pay income tax still get OHIP coverage.

You see what happens people when you take one of the Right favourite boogeymen, "Payroll Taxes", away?

Are employee CPP and EI "premiums" premiums while employer CPP and EI "premiums" are taxes?

Are private employer health premiums taxes? EI and CPP are part of the marginal cost of labour and therefore premiums, the fact that they are notionally split is a political choice and one with little economic substance.

Agree, go aim for a boom and hopefully double that number soon.

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