Well, there is a new policy think tank in Canada and they have just released a commentary on the minimum wage.
The existence of a productivity gap between Canada and the United States should ultimately manifest itself in terms of the growth rate of real per capita GDP. If productivity growth in Canada is consistently below that of the United States, then our real per capita GDP should also not grow as quickly as the United States. Yet, the historical evidence shows that the real per capita GDP growth rate in Canada has not necessarily underperformed the United States since 1870. However, there is an interesting differential performance across time periods.
I was a bit surprised that the recent upsurge in unemployment in Ontario in June, which was especially concentrated amongst youth (individuals aged 15 to 24 years), did not generate much discussion about the impact of the minimum wage. Ontario’s adult minimum wage rose 75 cents on June 1st to hit 11 dollars per hour. Ontario also lost 34,000 jobs in June and employment in the age 15 to 24 category dropped by 28,800.
Well, the latest Statistics Canada Labour Force Survey numbers paint a rather bleak picture for Ontario with employment dropping by 34,000 jobs and the unemployment rate rising from 7.3 to 7.5 percent. However, Ontario’s employment picture is much more complicated than that and regional numbers suggest that some parts of Ontario – well the GTA (The Greater Toronto Area) – is enjoying a boom comparable to a western resource producing province.
I will be teaching first year economics this fall for the first time in quite a number of years and I want to provide a more gripping visual presentation of what an economy is. I have the standard set of graphs illustrating the circular flow and the production possibilities frontier in order to provide the basic concepts of the economy as a system, scarcity and opportunity cost but I want something simpler to start with on the first day of class. I want a more abstract representation of what an economy is and what changes over time can mean. Here is what I have been experimenting with as I put together the slides for my first lecture.
Well Canada Day is once again upon us – we now have 147 years of Confederation to celebrate– and what better way to celebrate than with a brief retrospective of economic performance as measured by per capita GDP. For your viewing pleasure, I present real per capita GDP in $2002 for each of the main census years since 1867 as well as a calculation of the average annual growth rate of real per capita GDP for each decade.
We all know that the word “economics” comes from the Greek “oikonomia” which refers to the thrifty management of household affairs. By extension, the origin of the term “economy” is closely related to the same term as it is from the Latin “oeconomia”, which is again from the same Greek “oikonomia”. From all this, it is not difficult to see an economy as simply the agglomeration of individual households when it comes to the European language tradition. In a sense this nicely encompasses both our micro and macro traditions, as macroeconomics simply becomes the study of the sum of many individual household behaviours. What about economics when to comes to other languages – especially non-European languages?
Well, the election is over and I must admit I was not that surprised the Liberals formed the government but I am surprised at the fact it is a majority government. There are now numerous economic challenges facing the province and suspect after the fun of campaigning from the left, the Liberals may eventually be forced to govern from the right. And then perhaps not. Still, what explains what is happening?
Well, here is a new contribution to the debate over the effect of fiscal policy shocks from the journal of the Institute for Fiscal Studies. The authors Paweł Borys, Piotr Ciżkowicz and Andrzej Rzońca are from the Warsaw School of Economics and look at the impact of fiscal policy shocks on EU new member states. Their results will be seen as contribution to the debate over austerity measures and whether one should stimulate economic activity through tax reductions or direct expenditure measures.
In the wake of the abdication of King Juan Carlos of Spain, the New York Times ran a short piece on monarchies noting that 12 monarchies still survive in Europe with eight of them being liberal democracies – Belgium, Britain, Denmark, Luxembourg, the Netherlands, Norway, Spain and Sweden. Incidentally, these Scandinavian monarchies in particular are among the most highly developed countries on the planet – peaceable kingdoms with high material and social standards of living.
Well, tonight is the Ontario election debate and inevitably job creation will come up as a topic. On the one hand, Tim Hudak will have to deal with the fallout over his Million Jobs Plan. On the other hand, Kathleen Wynne and Andrea Horwath will need to demonstrate what their plans for employment growth in the province are. Whether they will venture an estimate of how many jobs their policies will create will be an interesting question. To help everyone prepare for tonight’s clash of Ontario Titans, here is (an estimate of) average annual employment growth in Ontario from 1977 to 2013 with premiers and political affiliations duly noted.
The debate over the Ontario PC “Million Jobs” platform has certainly gone ballistic over the last few days and having posted on the subject in January when the plan was first announced I certainly think its worth another post. When the “Million Jobs” plan was first mentioned in January, my response was to look at employment growth over the long term to see how plausible 125,000 jobs a year was as an outcome.
Economics is really all about incentives and their effect on behaviour at the micro and macro level. My training in economics emphasized the role of prices in communicating information about scarcity and opportunity cost and providing the incentives that affect economic behaviour. Yet, all of our economic behaviour is also rooted on an institutional framework that includes not only the structure of markets and public institutions but also codes of human behaviour such as honesty and trust. None of this is new but it brings me to my point-how ingrained codes of social behaviour can be used. Simply being helpful or asking for help or looking needy can be used to generate an opportunity for further economic interaction, which is not always to your benefit. I suppose the old adage is that no good deed goes unpunished.
Health care reform in Canada in the wake of the Romanow Royal Commission and the 2004 Health Accord has often been described as a story of missed opportunity with the increases in federal transfer spending not accompanied by desired results. As the review of the 2004 Health Accord by the Standing Senate Committee on Social Affairs, Science and Technology concluded in 2012, the achievements of the accord were mixed. The increased funding “had increased the provision of services, but had not resulted in reform of health-care systems, including the much-needed integration of different health-care sectors and the breaking down of silos.” In other words, it has been pretty much business as usual. Yet, there is some interesting evidence in a recent paper by Arthur Sweetman and Gioia Buckley (both at McMaster University) that in the area of primary care reform, Ontario has been implementing some major reforms.
Ontario’s budget will be presented today in the wake of new GDP numbers from Statistics Canada showing that Ontario’s real GDP growth was amongst the poorer performers in the country in 2013 (Quebec, NS, & NB were lower). Manufacturing was again singled out as one of the sectors in which Ontario is doing rather badly with a decline in output in 2013 of 2.3% as “computer and electronic products, motor vehicle and motor vehicle parts, machinery, and iron and steel mills and ferro-alloy products all declined.” However, 2013 saw an increase in manufacturing output in Saskatchewan of 3.4 percent with the gains in the areas of chemical, food and wood products. Alberta also saw an increase in manufacturing output of 1.1 percent. It would appear that the news in manufacturing is not all bad even if one considers employment.
Canadian retailers have recently been concerned that the Canada Border Services Agency has been too lenient with cross-border shoppers in the wake of the increase in duty free limits in 2012. While it is true that cross-border trips have grown substantially over the last decade, I’m not sure they should be that concerned.
Well the price of gasoline just spiked upwards across Canada and the usual media analysis has begun. Five key reasons were summarized as follows by Shawn McCarthy in the Globe and Mail: 1) Approach of the summer driving season leading to a switch to summer gas formulations which leads to a reduction in supply. 2) Higher crude prices. 3) A lower Canadian dollar. 4) Lack of retail competition in Canada and 5) U.S. exports of gasoline and diesel out of North America creating tighter demand and supply conditions. I thought explanation number three was rather intriguing.
It turns out that having a more efficient health care system is not just about sustainability or bean counting – it also can save lives.
Yes, it is April 1st but this post is dead serious. A study was recently done for economics, chemistry and philosophy departments across ten Ontario universities in an effort to gain insight on teaching workloads and research productivity. The reason? Ontario universities are tight for money and the government is looking for productivity gains and they want information on differences in research output and teaching load across universities.
It would appear fiscal restraint has finally caught up with police services across the country. The recent release of Police Resources in Canada, 2013 by Statistics Canada documents a decline in police strength after nearly a decade of increases as well as a slowdown in per capita spending. The crime rate, however continues to fall.