Sunday, May 25, 2014

Sunday Afternoon Links

Miscellaneous material for your Sunday reading.

- James Greiff makes the case against the right's faith-based reliance on costly high-end tax cuts in place of attracting people through jobs and quality of life:
(T)he recent record suggests those U.S. states that cut taxes find themselves with bigger deficits and none of the economic revival that might stop the population loss plaguing the Rust and Farm belts.

Consider Ohio, where Republican Governor John Kasich is pushing to cut the top marginal tax rate to 5 per cent or less from the current 5.92 per cent. This might save the average taxpayer a few hundred dollars a year. It’s always nice to have a little more change in one’s pocket, though you should ask yourself: For this amount of money, would you pick up hearth and home and move to Ohio or cancel plans to move out of state?

But if people don’t relocate because of tax rates, why do they move? The answer is as basic as it gets. The biggest group of cross-border movers is people relocating for jobs or looking for work, according to a new study by the Center on Budget and Policy Priorities. Adding in people who move for cheaper housing and milder weather — mostly retirees leaving colder climates for the South and Florida — accounts for a majority of the people who leave.
There’s also evidence that cutting corporate taxes is of little use in stimulating business. First, many entrepreneurs aren’t that mobile; second, they tend to want to be in cities with large talent pools. Taxes don’t often figure among the reasons entrepreneurs cite for where to start a business. And once a company is up and running, marginal tax rates are rarely something that leads a company to move.
- Paul Krugman discusses the Financial Times' failed attack on Thomas Piketty's discussion of wealth inequality. And Travis Lupick reports on Oxfam Canada's effort to put inequality at the forefront of its international development work.

- Meanwhile, Guy Standing argues for a "precariat charter" to enshrine new rights of citizenship (most notably a guaranteed basic income). But I do have to wonder whether he's proposing the wrong means to the right end - as the case for greater control over time and income security seems more defensible and appealing as applying to all individuals, rather than mattering only to the subset of workers who see their current employment (or lack thereof) as including them within the precariat class.

- Jim Stanford eviscerates the Cons' attempt to keep a pool of disposable employees at business' fingertips based on the claim that they're particularly important to international service industries:
On average, TFWs on LMOs are more important in goods-producing industries than service-producing industries.  They accounted for almost 3% of all jobs in goods industries, but only 1.35% in services sectors.  (While these ratios may seem small, don’t forget that the rapid expansion of the TFW program under the Conservatives has meant that migrant workers accounted for a surprisingly large share of all net new jobs created in the economy; employers tapped migrants for one in five net new paid positions created in the whole economy from 2007 through 2012).

Moreover, within services industries, TFWs are clearly concentrated in non-tradeable services sectors.  60% of all service-sector LMOs were issued in the three biggest sub-sectors, each of which is overwhelmingly domestic in its outlook: hospitality (with 45,000 LMOs), “Other Services” (21,000 LMOs, most of whom work in personal care), and wholesale and retail trade (11,000 LMOs).  The proportional reliance on LMOs is highest, not surprisingly, in the hospitality and other services categories, where LMOs represented almost 4% of all employment — and where the expansion of the program has provided employers with attractive low-wage recruitment opportunities.

In contrast, a total of 23,000 LMOs were in effect in 2013 in the four major tradeable service industries listed on the table above: transportation, information, finance, and professional services.  That represents 0.9% of employment in those four sectors.  A more detailed disaggregation of employment within those tradeable services industries (were the data to allow for it) would likely confirm, I suggest, that the use of TFWs in the more specialized and innovative services jobs (those which are most oriented around exports to foreign purchasers) would likely be significantly lower.  Of course, there are some TFWs who have entered Canada to fill higher-skill jobs, including some in finance, professional services, and other tradeable services.  So we cannot say that TFWs play no role in services exports; they clearly do.  But we can certainly say that TFWs are used less intensively in tradeable services than non-tradeable services, and even less intensively again than in goods industries.  That makes it all the more curious for Mr. Kenney to highlight this part of the economy with his dramatic argument.
Opponents of the TFW program have argued for its replacement with systems of permanent immigration, and adequate transition measures to allow those who are in the country to continue working here under alternative provisions.  (See for example the fine work of the Alberta Federation of Labour on this point.)  In that regard, with due notice to both employers of TFWs and the migrant workers themselves, the TFW program (and in particular its most troublesome aspect, the low-skill stream) could be cancelled with no impact on Canada’s services exports.  In fact, the impact on goods-producing industries and non-tradeable services would be greater (but still negligible, given appropriate notice and transition measures) than the impact on tradeable services.

In light of this evidence, Mr. Kenney’s claim that the TFW program is essential to Canada’s international trade in services should be seen as far-fetched and desperate.  And the extravagant hyperbole of this argument makes a mockery of his own appeal, in his earlier tweet that same day, for more “nuance in the discussion” of the TFW issue.
- Finally, Antony Lowenstein discusses how public broadcasters represent a much-needed counterweight to the wealthy and powerful - and why they're thus bound to come under attack.

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