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Stoking workers fears 
Posted (2017-08-15)

David's Making Waves commentary for August 21st:

When I talk to people behind the cash register or stocking shelves, they tell me they’re afraid of losing their jobs because the Ontario government is raising the minimum wage to $15 an hour.

Certainly, business has not made it easy for workers in the past couple of decades – Caterpillar, Magna, the Big Four auto manufacturers have all used the threat of moving jobs south to keep wages down. Some, like Bombardier, Post Media and Sears are handing their executive big bonuses to help them cut jobs.

As for smaller businesses, Ministry of Labour stats show high rates of wage theft and other infractions of the existing Labour Code.

The message to workers is clear: ask for fair pay for a fair day’s work and watch your job disappear.

That anxiety shows up in rural areas in higher rates of preventable accidents, obesity, food bank use, addictions – all now recognized symptoms of a population under stress.

Stoking people’s fears is the Ontario Chamber of Commerce and their friends in the business lobby. The so-called ‘Keep Ontario Working Coalition’ has released a report claiming 185,000 jobs are at risk from Ontario’s Workplace reforms. If you look behind the headline you discover their number is based on a guess about how business owners will react to the reforms.

This is not research. It’s speculation, and it flies in the face of dozens of studies that have found the impact on jobs is minimal … and that includes an early look at Alberta’s raise in its own minimum wage.

Making Waves, I’m David McLaren


You can say what you want David - but you are absolutely unqualified and wrong in making the statements that you do about the work done by CANCEA. It is a highly objective, credible and professional economic consulting company that has done considerable work for governments on this and other important complicated policy initiatives. The team that did this work has four PhDs and one MA among the five of them with expertise in modelling, macro economics, micro economics and welfare economics. They are analysts not propagandists.

Yes assumptions are used in all such analysis just as critics like you make assumptions. That is the basis of econometrics, a highly advanced scientific methodology. The difference is that their assumptions are empirically based and are tested with what is called sensitivity analysis. That means that while 185,000 is their best estimate of jobs at risk there is a band around it of assumption driven impacts. In fact the number could be higher. Or it could be lower but still impactful negatively on jobs and cost of living, deficits, debt and competitiveness. 

Unlike the objective, comprehensive analysis of CANCEA, your "conclusions" seem to be nothing but casual ideologically driven assumptions. They analyzed the impact of all of the interrelated elements of Bill 148 - including but not limited to minimum wage. Sadly you and others have done no such rigorous analysis on the effects Bill 148 but spout as if you have. It damages the credibility of everything that you assert.

Trent Gow


Trent

You know I hold you in high regard and I doubt there is anything you could say (including in your last email) that would change that. But I can’t let what you’ve said go without a response.

You are essentially saying that no one except well-worn economists have anything serious to add to debates around economic policy – in other words, governance by the experts. Economics, like politics, it too important to leave to the economists (and politics to the politicians). I have no doubt that economists use sophisticated tools to suss out what’s happening and what will happen to GDP, jobs, investment and a whole lot of other phenomena. I will always stop short of calling what economists do a ‘science.’

As I recall you endorsed my report for P&J on Precarious Work and its conclusions about its contribution to inequality. Was I similarly ‘unqualified’ to contribute that work to the public debate? And, if there is inequality and increasing working age poverty, what are we to do about it?

Models, regardless of their sophistication, always carry the biases of their modellers and are only as good as the information they put in and the variables they account for. The economic model of the Chicago School left, in its wake, a lot of misery and destruction in Chile in the 1970s under Pinochet and then in America after 2008.

In the case of the CANCEA study, the analysts themselves speak of their model’s limitations: it’s “based on the expected behaviour on Ontario businesses.” Sorry, but that ain’t science any more than the so-called behavioural sciences are.

If you’ve followed the links I’ve included in many of my emails, you’ll know that what I’ve said doesn’t go much beyond the evidence of inequality and its solutions (including increasing the minimum wage) as put forward by the Conference Board of Canada, the Cdn Centre for Policy Alternatives, the OECD, the Brookings Insitit., the Centre for Economic and Policy Research (US), and the Economic Policy Insitit. (US).

You have answered with a Washington U study that has yet to be peer reviewed and a paper from North Ontario that drew questionable conclusions from out-of-date data. I believe I sent you short critiques of those.

So, until I see some research to the contrary, I think I’ll stick with the numerous studies out there that show the impact of raising the minimum wage does not significantly lower employment or raise inflation rates. The research I’ve seen uses data from actual increases in the minimum wage in different jurisdictions – it doesn’t rely on “expected behaviour”.

I fail to see how my approach is as ideologically-driven as you say. Yes, my ideology cleaves to the left. Yours not so much. We all have ideologies for, as Alan Greenspan said when grilled by the House Oversight Committee about his failed economic model: “Remember what an ideology is. It’s a conceptual framework with the way that people deal with reality. Everyone has one.”

Even you, my friend.

Regards

David

 


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