Tuesday Morning Links

This and that for your Tuesday reading.

- Asher Schechter examines new studies showing how massive markups are enriching corporations at the expense of workers:

The two standard explanations for why labor’s share of output has fallen by 10 percent over the past 30 years are globalization (American workers are losing out to their counterparts in places like China and India) and automation (American workers are losing out to robots). Last year, however, a highly-cited Stigler Center paper by Simcha Barkai offered another explanation: an increase in markups. The capital share of GDP, which includes what companies spend on equipment like robots, is also declining, he found. What has gone up, significantly, is the profit share, with profits rising more than sixfold: from 2.2 percent of GDP in 1984 to 15.7 percent in 2014. This, Barkai argued, is the result of higher markups, with the trend being more pronounced in industries that experienced large increases in concentration. 

A new paper by Jan De Loecker (of KU Leuven and Princeton University) and Jan Eeckhout (of the Barcelona Graduate School of Economics UPF and University College London) echoes these results, arguing that the decline of both the labor and capital shares, as well as the decline in low-skilled wages and other economic trends, have been aided by a significant increase in markups and market power.

...

De Loecker and Eeckhout find that between 1950 and 1980, markups were more or less stable at around 20 percent above marginal cost, and even slightly decreased from 1960 onward. Since 1980, however, markups have increased significantly: on average, firms charged 67 percent over marginal cost in 2014, compared with 18 percent in 1980.

...

Markup increases, De Loecker and Eeckhout find, became more pronounced following the 2000 and 2008 recessions. Curiously, they find that economy-wide it is mainly smaller firms that have the higher markups, which according to De Loecker is indicative of widely different characteristics between various industries. Within narrowly defined industries, however, the standard prediction holds: firms with larger market shares have higher markups as well. “Most of the action happens within industries, where we see the big guys getting bigger and their markups increase,” De Loecker explains. 

- Hadrian Mertins-Kirkwood and Stuart Trew rightly question the Libs' attempt to paint platitudes and corporate giveaways as a progressive trade agenda as they sit down to renegotiate NAFTA. And David Climenhaga notes that John Horgan may be nothing but pleased with threats from Alberta Conservatives to remove British Columbia from the corporate-driven New West Partnership.

- Muhammad Hamid Zaman comments on the importance of reliable and complete data to shape public policy choices in the health sector (and elsewhere).

- Meanwhile, Andrew Seaman reports on new research suggesting that poverty can manifest itself in arterial buildup even in young children. And Jordan Press discusses the link between foster care and youth homelessness.

- Katie Hyslop highlights the importance of preparing children to bring a critical eye to manipulative media. But Tom Pride notes that the UK Cons have other ideas - instead encouraging parents to teach children not to share (and to value their property over all else) to avoid even the slightest hint of social responsibility.

- Finally, Denise Balkissoon rightly points out the problem with a white supremacist and anti-social movement built around the preservation of undeserved privilege.

New column day

Here, pointing out that the New West Partnership Trade Agreement (PDF) serves no useful purpose even on the terms of its advocates following the unveiling of the Canadian Free Trade Agreement (PDF) - and asking whether we'll see any action to eliminate its downsides.

For further reading...
- I've previously discussed how the TILMA (which was of course rebranded as the NWPTA later on) in fact includes none of the balance or interest in harmonized and high regulatory standards promised when it was introduced.
- And it will particularly be worth comparing the Wall government's willingness to allow corporations to sue for damages against its refusal to allow municipalities to do the same in the face of breaches of contract.

On redundancies

Scott Sinclair offers a useful summary of the latest sop to the anti-regulation lobby in the form of the new Canadian Free Trade Agreement (PDF). And as usual, there's a fundamental problem with any deal which deems public policy to be presumptively invalid to the extent it affects actual or potential corporate profits.

But I'd think it's particularly worth watching what will happen among the provinces who have already agreed to worse deals.

Unlike the New West Partnership Trade Agreement (formerly known as the TILMA), the CFTA does back up the usual spin about harmonizing rather than gutting regulations with processes which might actually encourage provinces to reconcile conflicting rules. And as noted by Sinclair, it avoids the trap of turning trade challenges into corporate windfalls.

With the CFTA in place, it would thus seem that all of the even arguably valid purposes behind the NWPTA have now been addressed at a national level - without some of the most glaring flaws.

So with that in mind, we should ask: is there any purpose to keeping the NWPTA around other than to give corporations multiple ways to attack policymaking at the provincial level? And if not, then isn't it about time to terminate the NWPTA?

New column day

Here, on how Regina City Council's embarrassing heel-dragging in response to the David Suzuki Foundation's Blue Dot Declaration on environmental rights contrasts against the spread of trade agreements with virtually no scrutiny.

For further reading...
- Shawn Fraser both introduced the motion supporting the Blue Dot Declaration, and discussed it here. And the list of cities who have already signed on is here. 
- Meanwhile, CBC reported on Council's demurral. And Paul Dechene was duly outraged here.

Monday Morning Links

Miscellaneous material to start your week.

- Erika Shaker points out how condescending attitudes toward public benefits are both making it unduly difficult to develop new programs which would benefit everybody, and threatening existing social safety net. Sean McElwee writes that inequality only figures to grow as an issue as the wealthy try to disassociate themselves from everybody else. And Scott Santens discusses how the U.S.' social benefits are needlessly costly and difficult to access because they're designed more to exclude than to include:

As citizens, we are doing everything we can. Some of us are even tragically dying in our attempts to struggle on, while over 10,000 others have already grown too tired of the struggle to even continue living. As long as wages continue to not rise, and as long as jobs continue to be eliminated due to advances in technology, we have nowhere else to turn but our own safety nets. It is for this reason, it will only become ever more increasingly important for us to look with open eyes and minds at our system of public assistance and how it functions for all of us, poor and rich alike.

If so many of us are already driving on our spare tires, and we recognize the road ahead is only going to get bumpier and more dangerous, then we must together make sure that we either make it quick and painless for us all to get right back on the road when we need assistance, or finally guarantee that no matter what, there will always be another spare tire for all of us.

- Angella MacEwen debates Ben Eisen about the importance of public child care. Ron Waller takes a closer look at the numbers behind Quebec's universal daycare program to show how it produces strong progressive outcomes.

- Justine Hunter reports on how B.C. workers are suffering from the combination of underregulation which caused a sawmill explosion, and a compensation system which is punishing them for being injured. And lest there be any doubt, that's exactly the type of corporatist policy Brad Wall is looking to smuggle into Saskatchewan in the guise of "harmonizing" standards. (Though of course there's still far too much reason for concern about worker safety here even before that process plays out.)

- Finally, Kjell Anderson commits some sociology in exploring how individuals come to be "radicalized". Michael Harris and Glenn Greenwald both weigh in on the Cons' immediate inclination to respond to last week's shootings with an all-out assault on civil rights. And Chris Selley asks that we at least stop short of trying to exile Canadians, while Michael Spratt and Chelsea Moore modestly suggest that policing thoughts might not be the best idea either.

New column day

Here, on how Brad Wall is kicking Ontario while it's down by demanding that it let stimulus funding leak out of a province which actually needs it - and how Saskatchewan and other provinces stand to suffer too if Wall helps the Cons impose similar restrictions across the country.

For further reading...
- The Leader-Post reported on the Sask Party's own rejection of the TILMA here, while Matthew Burrows noted Saskatchewan's overall consensus not to pursue it here.
- I posted here on the absence of any substantive differences between the TILMA which Wall rejected based on public pressure, and the NWPTA which he signed in secret without consultation. And Erin Weir addressed the problems with those agreements here.
- Lucas Kawa points out Sylvain Leduc and Daniel Wilson's work on the value of infrastructure spending here, noting that while it's generally a good investment under almost any circumstances, it can be several times as valuable if paired with stimulus effects in a depressed economy.
- Finally, Stuart Trew and Kayle Hatt discuss the dangers of the Cons' attacks on provincial government policy-making authority.