West Virginia teachers strike to win

This episode is dedicated to the recent, inspiring and victorious teachers’ strike in West Virginia. West Virginia teachers went out on strike in late February over low pay and continued attacks on the health insurance plan they share with all other state workers. They stayed out despite an initial deal signed by the Governor and their leadership and ultimately won a 5% raise not just for themselves but for all public employees in West Virginia as well as promised reforms to their insurance plan, known as the PEIA. I spoke with two teacher leaders from West Virginia and an expert on teacher unionism to get some perspective on how this strike came about, how it won and what others can learn from its example.

My first guest is Emily Comer, a high school Spanish teacher in South Charleston, West Virginia; she is a rank-and-file activist in her local of the AFT, the American Federation of Teachers and co-author of this excellent piece on the strike. I next speak with Lois Weiner, professor in the Department of Elementary and Secondary Education at New Jersey City University and a specialist in urban teacher education and teacher unionism. Her research actively supports teachers who want to transform their unions; she wrote this piece on the strike that I reference in my interview. My final guest is Brandon Wolford, local president of the WVEA in Mingo Country. The WVEA is the West Virginia Education Association and alongside the AFT it is one of the two big teachers’ unions in West Virginia; Mingo County has a storied place in labour history as an epicentre in the Mine Wars and mining struggles throughout the 20th century.

As always, remember to subscribe above to get new episodes as they appear, rate the show on iTunes and donate to help keep this good thing going. Thanks!

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Jobs data doesn’t say much about the minimum wage (yet) but lots about growing inequality

We’ve had two months of jobs data in Canada since Ontario increased it’s minimum wage from $11.60 to $14 on January 1, 2017. When January’s Labour Force Survey numbers came out and showed some of the biggest month-over-month losses in years, there was a slew of predictable, reflexive commentary blaming Ontario’s minimum wage hike. Now that we have a second month of data that show modest job gains as well as falling unemployment, down to 5.8% nation-wide and 5.5% in Ontario, the same critics are silent. The lesson is that they should have also been silent about January’s numbers.

Simply put, we don’t know enough to lay the blame for good or bad jobs numbers at the feet of a minimum wage hike in Ontario. Both January’s negative data and February’s positive data should give us pause. The monthly jobs data are volatile. The drop in January was so out of line with long-term trends that it raised the eyebrows of nearly all economists. Part of January’s losses are due to the typical rash of post-holiday lay-offs. But these numbers also seem at least in part statistical error rather than a reflection of something happening in the real world, especially when compared with February’s return to the trend of consistent, if modest, job growth.

Unemployment rates across Canada; Ontario is second lowest at 5.5%. Source: Statistics Canada, The Daily for March 9, 2018.

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The problems with progressive free trade and a divided labour movement

…And we’re back to regularly-scheduled programming. Apologies for the podcasting hiatus to (now really faithful) listeners; I hope to be back to regular episodes once again. I’m restarting the show this week with two great guests. First up, I speak with Angella MacEwen about the on-going NAFTA re-negotiations and whether Trudeau’s much-vaunted “progressive free trade” holds water. Angella has been a guest on the show before and is an economist at the Canadian Labour Congress. Speaking of the Labour Congress, my second guest, David Bush, looks at the turmoil that led up and has resulted from Unifor leaving Canada’s house of labour. Dave is an editor at Rankandfile.ca; he writes frequently and incisively on the Canadian labour movement.

As always, remember to subscribe above to get new episodes as they appear, rate the show on iTunes and donate to help keep this good thing going. Thanks!

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Media get it wrong on Bank of Canada minimum wage study

Over a million workers in Ontario just got a big raise thanks to tireless, bottom-up orgainizing, but if you look to the media it’s a bad news story. The same, tired headlines are back. Yesterday, the CBC ran a story titled, “Minimum wage hikes could cost Canada’s economy 60,000 jobs by 2019”. Today, the Toronto Star’s front page blared, “Wage hike could cost 60,000 jobs, Bank of Canada says”.

Reading either of these headlines or the stories that follow, you could be forgiven for not knowing that the cited Bank of Canada research note had a positive conclusion about the effect of minimum wage increases on workers. A major claim of the Bank’s note is that, for workers, the benefits of increasing the minimum wage outweigh the costs in terms of labour income. First of all, the Bank is not predicting 60,000 pink slips but merely a slowdown in continued job growth. The 60,000 figure is a national, annual one and represents just 0.3% of total employment. Monthly job growth has at times exceeded this number.

More importantly, the Bank found that the costs of projected (remember these are still only projections) lower employment are outweighed by the benefits from higher economy-wide wage income stemming directly from the minimum wage increase. The authors write, “On net, however, real labour income should be higher following the implementation of these measures relative to otherwise. This is because the 0.7 per cent increase in the level of aggregate real wages more than offsets the 0.3 per cent decrease in total hours worked.” (more…)

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Site C, Reconciliation and a Green New Deal

Reconciliation is not just about rhetoric, it is material. It is about how economic costs and benefits are shared. If we are to be serious about it, we have to be ready to take on costs that are both political and economic. The sunk and termination costs of Site C are substantial and so are the foregone benefits of reliable baseload power. If we want our governments to take on these costs in our name without fear, we have to make it a common sense proposition that they are worth taking on to forge a new relationship with First Nations.

The BCNDP is trying to have it both ways — support UNDRIP in principle but make hard decisions that contradict it. Horgan was visibly pained today in announcing his decision; it seemed honest and honestly conflicted. But it should be clear that saying sorry nicely isn’t good enough. There was little in what he said that touched on the concrete aspects of either going back to the table to get consent before making this decision or a different framework for proceeding in the future. (more…)

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Minimum wage whack-a-mole

Minimum-wage whack-a-mole is the best way to describe what I’ve been up to the past couple months. It seems like every week or so in August and September, the business lobby in Ontario was serving up a plate of inaccurate yet headline-grabbing predictions for consumption in the public debate.

Going against the grain of the best academic research and recent experience elsewhere, these reports have attempted to scare Ontarians into thinking that the costs of raising the minimum wage outweigh the benefits. As 53 Canadian economists, including myself, outlined in an open letter published earlier in the summer, new research is clear: raising the minimum wage is good for workers and the economy.

Here’s a quick list of pieces I’ve written over the past months countering the inflated, sometimes heavily so, predictions of minimum wage opponents. (more…)

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Summer writing round-up

I know it’s been a bit quiet on the blog this summer, but that’s in part because I’ve been doing a bunch of writing elsewhere. Here is a quick summary of what I’ve been up to.

In the run-up to the UK election, I wrote a piece for Jacobin on one of the most important parts of the Labour manifesto: the pledge to pursue “alternative models of ownership“, including re-nationalization and co-ops. The entire manifesto was excellent and really shifted the momentum towards Labour, and even if this plank was less discussed, it will be crucial to building a 21st-century left economic policy. This article will be included in an upcoming free Verso e-book on the election and its aftermath; look out for that!

I also wrote a long-ish piece for the CCPA’s Monitor, exploring themes in In the Long Run We Are All Dead, Geoff Mann’s excellent new book on Keynesianism. The book itself is an extended mediation on themes of liberalism and revolution, tracing strands in Keynes back to Robespierre and Hegel (!). I try to situate this history of thought in the present moment and, in doing so, also draw on some examples from Three Worlds of Social Democracy, a collection of essays on the fate of social democracy across the globe, edited by my friend Ingo Schmidt. I highly recommend both books.

In other news, I now have a regular column in the venerable left publication, Canadian Dimension. The first one lays the ground for the themes I want to explore: “Questions of control and decision-making, the kinds of big questions Joan Robinson raised back in 1943, should be front and centre. A belief in democracy that extends to the economy and a readiness to popularize left economics — that’s my starting point for left economics and for this new column.” The second column, hitting newsstands this week, takes on some outdated economic myths of Canada in light of the 150th.

Finally, in more local news, I have helped launch a couple progressive economics initiatives around the big win by Ontario’s Fight for $15 and Fairness, which has successfully pressured the provincial government to introduce legislation raising the minimum wage to $15 and improving labour standards. The main piece was an open letter from economists in support of $15, signed by 52 colleagues across the country, including two past presidents of the Canadian Economics Association. It has been widely cited in the public debate, helping shift it away from business-led fear-mongering. Alongside the letter, Craig Riddell, Lars Osberg, Jim Stanford and I co-authored an op-ed for the Globe and Mail detailing the tectonic shift in the economics profession around the minimum wage.

Most recently, I have written two additional pieces pushing back on a flawed, skewed and irresponsible report on the minimum wage commissioned by the Ontario Chamber of Commerce and its allies. It makes the predictable claims using predictably inflated numbers based on predictably bad assumptions. It also appears to include an openly misleading claim around price increases to stoke additional fears. The first piece, co-written with Zohra Jamasi of the CCPA, is up on the CCPA’s Behind the Numbers blog; the second is a shorter follow-up of my own.

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What do we do when we Fight for $15

On this episode, three guests provide some perspective on the politics and the economics of the Fight for $15. First, I speak with Jonathan Rosenblum, campaign director at the first Fight for $15 at SeaTac Airport, just outside Seattle, Washington. Workers there won an immediate raise to $15 via a municipal ordinance in 2015. Jon is also an author and has recently published Beyond 15: Immigrant Workers, Faith Activists, and the Revival of the Labor Movement. Next, I move closer to home and talk to Sheila Block, economist at the Ontario office of the Canadian Centre for Policy Alternatives. Sheila lays out the context for the $15 and Fairness campaign in Ontario, one of changing work and a weaker labour movement. Rounding out the show, economics writer and researcher Nathan Tankus returns to the podcast to discuss the economic arguments in favour of raising the minimum wage. We go beyond the narrow issue of  minimum wages to broader challenges to “textbook economics.”

As always, remember to subscribe above to get new episodes as they appear, rate the show on iTunes and donate to help keep this good thing going. Thanks!

 

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Confused about universality? So are NDP leadership candidates

There was some pretty confused stuff on universality and means-testing during last night’s NDP leadership debate. Here are some thoughts that might help clear things up.

First, Singh’s attack of Caron on means-testing early in the debate was a bit bizarre seeing as both of them have major new means-tested transfers among their policy planks. Caron did a good job in fighting back and hit back at Singh’s move to fold near-universal OAS into a more aggressively targeted benefit. Not a very enlightening exchange.

Not to be outdone, Angus’s attack on Singh at the end of the debate was even more confused. This time, Singh did a good job of defending himself and made a clear argument on the differences between means-tested cash transfers versus universal social programs.

On OAS in particular, Singh is right: not everyone receives it because claw-backs start at $75,000 in income and the benefit is gone for those making roughly $120,000. But Caron is right in that a vast majority of income earners ($120,000 in income lines up with the top 5% of overall tax filers) will get some benefit from the program so it is de facto universal. This makes OAS very different from things like GIS for seniors or WITB for low-wage workers, which phase out much quicker and are targeted at low income folks.

The problem of middle income seniors falling behind is an important one and tied up in so much else about the economy (the decline of unions and pensions; the housing bubble where some have won the lottery and others have not; and so on). The NDP does have to think about what combination of new social programs (pharmacare in particular because it disproportionately helps seniors), expanded public pensions and income transfers will do most to improve people’s lives, and also be a foundation to build on politically—in terms of policy staying power and building winning electoral coalitions. (more…)

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Canadian economists support $15, media round-up

53 Canadian economists, myself among them, have signed an open letter in support of the $15 per hour minimum wage. The letter follows on the immense bottom-up campaign in Ontario led by the Fight for $15 and Fairness, which has successfully pressured the provincial government to announce a move to $15 by 2019. It should also be a boost to movements in other provinces fighting for the same.

Here’s a key excerpt from the letter which outlines the now well-established economic case for $15:

But low wages are also bad for the economy. There are good economic reasons to raise the incomes of low-wage workers. Aggregate demand needs a boost. While Canada escaped the harshest impacts of the 2007-08 financial crisis, our country has also seen a slowdown in growth. We risk further stagnation without reinvigorated economic motors. As those with lower incomes spend more of what they earn than do those with higher incomes, raising the minimum wage could play a role in economic revival, improving macroeconomic conditions.

For years, we have heard that raising the minimum wage will kill jobs, raise prices and cause businesses to flee Ontario. This is fear-mongering that is out of line with the latest economic research. Using improved techniques that carefully isolate the effects of minimum wage increases from the remaining noise in economic data, the weight of evidence from the United States points to job loss effects that are statistically indistinguishable from zero. The few very recent studies from Canada that have used these new economic methods agree, finding job loss effects for teenagers smaller by half than those of earlier studies and no effect for workers over 25.

There are many possible reasons for minimum wage increases to lead to little or no job loss. Studies have found lower turnover, more on-the-job training, greater wage compression (smaller differences between higher- and lower-paid workers) and higher productivity after minimum wage increases. In short, raising the minimum wage makes for better, more productive workplaces.

The business lobby has also suggested that any minimum wage increases will simply be passed on as higher prices. First, the above-mentioned improvements will offset some part of the higher labour costs to business. Second, there is no instantaneous, automatic mechanism between higher labour costs and higher prices. Some of the costs not absorbed by increased efficiency may go to price increases, but these are likely to be small and, for low-wage workers, offset by higher incomes coming from rising wages. Furthermore, if we remember that over 1 in 4 workers in Ontario makes under $15 per hour, we should not treat slightly higher inflation as the main criterion of successful policy; instead we should focus on the substantial benefit to low-wage workers, their families and the economy as a whole.

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