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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Jeremy Corbyn is Prime Minister

Looking to the UK, it definitely feels like a series of those weeks where decades happen. Jeremy Corbyn’s Labour narrowly lost but really won the election, its vote share up by the most since 1945. Corbyn himself looks more like the Prime-Minister-in-waiting than leader-of-the-opposition; “Jeremy Corbyn is Prime Minister” is now a popular dig at mainstream pundits on Twitter. This week’s two great guests explain it all: how and why Corbyn won, why his economic program was so important and where Labour goes from here.

First I speak with Beth Foster-Ogg, a prominent activist with Momentum, the group created to support Corbyn’s first leadership bid and now a major force both within and outside the Labour Party. Beth is currently the membership coordinator and spoke with me about Momentum’s role in the election campaign, and where it is headed next. My second guest is Nick Srnicek. Nick is the author of Platform Capitalism and Inventing the Future, a stellar and influential book co-written with Alex Williams, one he spoke about on this podcast last year. He is a Lecturer in the International Politics Department at the City University London and one of number of intellectuals who have supported the rise of Corbynism.

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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The $15 minimum wage is good: busting business lobby myths

With the Ontario government seriously considering raising the minimum wage thanks to the tireless organizing efforts of the $15 and Fairness campaign, the labour movement and thousands of supporters, the business lobby is out fear-mongering in force. Here is a tool for the rest of us to fight back. It’s a collection of 5 myths and facts about raising the minimum wage: clear arguments for why $15 an hour is right for Ontario workers and the Ontario economy. This is an edited version of a section prepared for the Rank and File $15 and Fairness Now! An Organizer’s Handbook for Building a Movement.

MYTH #1: Raising the minimum wage will cost low-wage workers their jobs.

FACT: There is resounding evidence that raising the minimum wage is not a job-killer. Economists doing cutting-edge studies have found that the typical minimum wage increase does not cause major overall job loss. “Job loss is more of a threat than a theory.” For instance, the threat that robots will take our jobs has been made for over 200 years and full-time work is still 40 hours a week or more! The argument that jobs will be shipped offshore fails similarly. As much as business tries, it’s not yet possible to move a barista job halfway around the world. There are still so many jobs that require human labour.

A $15 minimum wage would pump billions of dollars into the pockets of low-wage workers and thus the Ontario economy. Jobs would be created as a result of the new economic activity, compensating for losses incurred by businesses that can only function on poverty wages. As the minimum wage goes up, workers become more valuable to businesses and jobs generally get better. Economists have found that when the minimum wage rises workers get more training and there is less turnover. Businesses put more energy into raising efficiency rather than keeping tabs on workers in poverty. And wages tend to become more equal: wages for managers and other high-paid workers don’t go up as much and businesses spend proportionately more on the lowest-paid.

Most importantly, potential job losses are not the only thing we should care about when the minimum wage goes up. Less poverty, better jobs, higher incomes for the lowest-paid — all of these would far outweigh the impact of a minimal job loss.

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Neoliberalism restructures work and pensions

On today’s show, two sociologists talk about aspects of neoliberal restructuring. First, Nicole Aschoff, sociologist, author of The New Prophets of Capital and until very recently managing editor of Jacobin magazine speaks with me about the auto industry, Trump and why globalization shouldn’t be solely blamed for the destruction of good jobs even while it is nevertheless in crisis. Next, Mike McCarthy, assistant professor of sociology at Marquette University in Milwaukee, discusses his recent book Dismantling Solidarity: Capitalist Politics and American Pensions since the New Deal about how the pensions system has been transformed in ways that leave workers more vulnerable.

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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Four (more) arguments against real-world basic income

With the Ontario Liberals rolling out their basic income pilot project to much fanfare this week, it’s an opportune time to dive into the debates around BI once again.

1 Political aspects of unemployment

A few weeks ago I attended a debate on basic income and the left in Toronto hosted by The Leap. During the debate, the proponents of BI returned again and again to those who are outside the labour force. This focus is important. Welfare in Ontario and elsewhere is equivalent to poverty. And those outside the labour market are central to the current plans for basic income, which are more replacements for welfare rather than the kind of universal schemes argued for by some on the left. What BI fans forget is that even those outside the labor force have important functions under capitalism. While there was much said about people who can’t for various reasons participate in the labour market, there was scant attention to their position within our economic system.

A number, primarily women, are “outside the labour force” but performing the invisible, difficult, unpaid labour that makes the system tick: childcare, housework, non-market food production. Their work is valuable for society but needs to remain unpaid as long as it isn’t done for profit. The other part of those of working age but outside the labour force are key in a different way. They are a reminder that those of us don’t have any wealth have to work for a wage to survive…or else. John Clarke, who has been consistently critical of neoliberal BI schemes, made the point early in the debate that unemployment, poverty and homelessness have a political function in capitalism: they are part of the apparatus of economic coercion. People become examples for others: “Don’t want to end up on the streets/in dire poverty/…? Better get to work.”

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