Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- Jared Bernstein takes a look at after-tax inequality, and finds that it fits neatly with Thomas Piketty's prescription to address the concentration of income and wealth through strong public policy:

(W)hile the progressive taxes and transfers that don’t show up in Mr. Piketty’s data reduce the level of inequality at any point in time, they don’t have that much impact on its growth. The share of comprehensive income going to the top 1 percent grew 6 percentage points before taxes and transfers from 1979 to 2010, and 5.4 points after taxes and transfers. (If one stops at 2007, before the recession, the same comparison yields an increase of 9.8 points before tax and 9.3 after).

So, yes, critics are correct that inequality analysts, including Mr. Piketty, should look at the impact of taxes and transfers. But if they’re fact driven, what they find will not alter their view about the upward trajectory of inequality. Instead, the extent of wage stagnation and its corollary, the increased role of transfer income and tax cuts in raising middle-income living standards, should alarm them. Instead of hacking away at the safety net, the data reveal the need to preserve it while increasing the quantity and quality of employment opportunities and the real growth rate of earnings for the majority of the work force.

- And David Atkins notes that inequality looks like an important issue to push back against the drift to the right - as evidenced by the Republicans' panic in trying to defend policies designed to make the rich richer:

The GOP's entire supply side theory is that if you reduce regulations and taxes on employers, they'll make more money and be able to hire more people. But even if that were true--and it isn't--it doesn't follow that any potential jobs they might create would actually be good jobs. In fact, most of the jobs that have been created since the Great Recession are low wage work. Most voters are smart enough to realize that.


The GOP could, in theory, blame immigration for driving down wages, and go the hardcore xenophobe populist direction of much of the European right. But that would almost certainly permanently lose them the Hispanic vote in a big way almost permanently, which would be electoral suicide.

But there aren't many other places to go for the GOP on inequality. One local Republican candidate for Assembly said at a recent debate that government regulations were constraining business, and that if we got rid of wage controls then wages would go up. That's literally how boxed in and nonsensical their position is.

If Democrats want to win, this is the issue they'll push. The GOP is in a tailspin on it, and they don't have other good messages in the till.

- Harry Stein comments on Pfizer's attempt to use an acquisition as a major tax dodge, while Brian Goldman discusses how pharmaceutical manufacturers are delaying the availability of new medications in Canada. Which naturally means the Cons figure it's time to hand still more free money to big pharma in the form of the CETA - and Joel Lexchin and Marc-André Gagnon study the costs.

- Carol Goar documents the demolition of the Cons' excuses for pushing the use of temporary foreign workers rather than skilled Canadians. And Lee-Anne Goodman reports that the TFWP is even shadier than previously reported - as employers are actively refusing to answer Canadian applications before applying for indentured servants based on the false claim that they can't find workers in Canada:

(From) customer service representatives in New Brunswick to food service supervisors in B.C. and RCMP clerks in Saskatchewan, many of the 110,000 jobs listed on the job bank are no longer available. A litany of postings are several months old; some have been on the site for more than a year.

Some job-seekers also complain that they never heard back from employers after applying for jobs posted online. An email address set up under a generic name by The Canadian Press has not received any replies to multiple queries about various job postings, including at companies that already employ temporary foreign workers.

Bill Wadsworth, a helicopter pilot in B.C., says he applied for jobs at numerous companies that he later learned were given a positive labour market opinion — or LMO — that allowed them to hire temporary foreign workers.

"I had applied to, and had the qualifications, to work for 75 per cent of the LMOs," he said in a recent interview.

"During my job search, I would contact these companies every two weeks on average. The response was always the same: 'We have no openings.'"

- Finally, Trish Hennessy discusses the plight of the Canadian middle class in her latest Index.