Musical interlude

Big Wreck - Albatross

Friday Morning Links

Assorted content to end your week.

- Joseph Stiglitz offers his suggestions (PDF) for a tax system which would encourage both growth and equality:

Tax reform...offers a path toward both resolving budgetary impasses and making the kinds of public investments that will strengthen the fundamentals of the economy. The most obvious reform is an increase in the top marginal income tax rates – this would both raise needed revenues and soften America’s extreme and harmful inequality. But there are also a variety of other effective possible reforms related to corporate taxation, the estate and inheritance tax, environmental taxes, and ensuring that the government gets full value when it sells public assets.

- PressProgress calls out Restaurants Canada for dishonestly claiming its members are abusing temporary foreign workers only because they can't find workers at any price. And Alison points out how the same group saying it doesn't matter how much workers are paid has gleefully pronounced its success in suppressing the minimum wage.

- Meanwhile, Carly Schwartz discusses the plight of the working poor in North America - or in other words, some of the same the employees the fast-food industry brags about having held to sub-poverty wages. And Lynn Stuart Parramore takes a look at the "gig economy" and its disastrous effect on workers:

Proponents of the gig economy, from the New York Times' Thomas Friedman to bright-eyed TED pundits, tout it as a welcome escape from the prison of the standard workweek and the strictures of corporate America. Working on a project-to-project basis will set you free, they tell us. Wired magazine has called it "the force that could save the American worker.”

But when you’re actually stuck in it, the gig economy looks quite different.

Consider the New York Freelancer’s Union: According to a report in the New York Times, 29 percent of the union’s New York City members earn less than $25,000 a year, and in 2010, 12 percent of members nationally received some type of public assistance. Turns out that life with no health benefits, vacation pay or retirement plan is not a rosy picture.
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What’s really going on is the desire of businesses to chop wages and benefit costs while also limiting their vulnerability to lawsuits, which can happen when salaried employees are mistreated. The burden of economic risk is shifted even further onto workers, who lose the security and protections of the New-Deal-era social insurance programs that were created when long-term employment was the norm. 

- Upstream points out Canada's poor ranking compared to international peers when it comes to children's well-being. Jon Land discusses Save the Children's research showing how the UK's austerity is driving millions of children into poverty. And Roger Cohen writes that the problem of capitalism eating its children applies globally:

[Mark Carney's] bluntness reflects the fact that, six years after the crisis, the core problem has not gone away: The deep unease and anger in developed countries about the ways globalization and technology magnify returns for the super-rich, operating in a world of low taxation and lax regulation where short-term gain becomes a guiding principle, even as societies become more unequal, offering diminished opportunities to the young, less community and a growing sense of unfairness.
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(H)uman beings matter. An age that has seen emergence from poverty on a massive scale in the developing world has been accompanied by the spread of a new poverty (of life and of expectations) in much of the developed world. Global convergence has occurred alongside internal divergence. Interdependence is a reality, but the way it works is skewed. Clinton noted that ants, bees, termites and humans have all survived through an unusual shared characteristic: They are cooperative forms of life. But it is precisely the loss at all levels of community, of social capital, that most threatens the world’s stability and future prosperity.

- Finally, Marilla Stephenson writes about two Con patronage scandals arising out of the Atlantic Canada Opportunities Agency. But predictably, the Cons' response to news of their own corruption has merely been to slam the door on anybody trying to figure out what they're up to - as evidenced by their sudden and inexplicable decision to turn the publicly-funded Challenger fleet into Stephen Harper's personal and confidential private jet service.

New column day

Here, expanding on this post about the Cons' ruthless discipline in keeping the benefits of any tax policy from flowing to those who need it most - and pointing out the need for a strong challenge to that single-minded focus on withholding money from the poor.

For further reading...
- Again, the PBO's report is here (PDF).
- And PressProgress' analysis of the Cons' tax cuts is here.
- Update: And Paul Wells manages to cut through the Cons' spin, though he notes that demolishing the federal government's fiscal capacity is the main point of Harper's plans.

Also, James Moore is firmly devoted to swatting flies which threaten the very fabric of space-time

No, the Cons still can't be bothered to try to actually identify mythical "trade barriers" as they push to give the corporate powers that be a practical veto over provincial governments. But they're certainly trying to make the myth sound more terrifying - and they won't meet anything more than mindless repetition from John Ivison.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- PressProgress digs into the PBO's report on tax giveaways to look at what Canada has lost from the Cons' cuts to federal fiscal capacity - and how little has been gained as a trade-off:

(T)he Harper government, by starving the public coffers, is losing $43 billion that could be used to boost investments in axed services, build needed national programs, as well as balance the budget and pay down debt.
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Finance Canada's own data suggests every $1 billion spent on corporate tax cuts generates a measly 3,310 jobs. Not very effective.

And the PBO's report indicates that median income taxpayers with kids (averaging between $42,450 and $56,505) would see between 2.8% to 2.9% increase in their after-tax income. But those tax savings can be quickly eaten up by increased costs that would otherwise be covered through public programs.

For example, tax credits for children cost Canadians $2.74 billion. But a month or two of childcare in Ontario is equal to the total after-tax savings from these tax credits, while an affordable national childcare program would cost less to implement -- and saves families thousands of dollars.

- Of course, one would hope to be able to point to the difference between the Harper Cons' actions and the principles most prized by Canadians. But as Sean Holman points out, the Cons are also going out of their way to make sure that policymakers don't have access to accurate data about Canadians' values:

As a result of a lack of federal government funding, Canada wasn’t included in the most recent World Values Survey — one of the few means we have of knowing what our values are, how we differ from people in other countries and whether those values have changed over time.

The survey — which uses individual, face-to-face interviews rather than phone calls — has happened six times over the past 33 years, with the most recent being conducted in 59 different countries. Respondents answer a questionnaire that measures nearly 250 indicators covering everything from someone’s feelings about race to their political leanings.
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Past surveys have also told us 64 percent of Canadians in 2005 would have agreed or strongly agreed to an increase in taxes if the extra money was used to prevent environmental pollution — an (sic) seven point increase over 2000.
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Findings such as these are valuable for everyone from journalists and researchers to politicians and everyday voters — potentially leading to stories, studies and policy-changes. But Canadians won’t know if those values or any others changed between 2010-14 because our country — which has been part of the survey since 2000 — wasn’t included in its most recent wave, the results of which were released late last month.

- Meanwhile, Mike De Souza reports on the Cons' edict that environmental scientists stay silent about environmental science. And Devon Black writes about the Cons' archaic, position-based negotiating strategy - though I'd argue they've consistently shown themselves determine to pursue a philosophy of "getting to 'Yes, Master'" rather than "getting to Yes".

- Geoff Leo confirms the less-than-surprising conclusion that complaint-based regulatory systems aren't doing anything at all to preserve the rights of temporary foreign workers who can be deported for complaining. And Cathie highlights why we can't expect the Cons to fix a mess based on their own combination of toxic anti-worker ideology and incompetent management.

- And finally, Jim Stanford studies the effect of CETA on Canada's auto sector, and finds that once again the Cons' trade plans will make matters worse for major industries.

Tuesday Night Cat Blogging

Boxy cats.

On poor choices

Unfortunately, the CP's coverage of the Parliamentary Budget Office's assessment (PDF) of Canadian tax policy over the past few years seems to largely miss the point - and the initial lack of attention to a major issue has been spun by the Cons into something even worse.

So let's highlight what should be the most remarkable piece of news:

The financial gains from cumulative PIT and GST/HST changes since 2005 skew toward households with larger incomes when measured in absolute dollar terms. Reductions to the personal income tax rate on the lowest tax bracket, and increases to the basic exemption and PIT income bracket thresholds skew absolute dollar gains to higher income earners.
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The lowest 10 per cent and the top 5 per cent income earners gain least, in relative terms. Each group will accrue after-tax and transfer improvements of 0.5 per cent.

It's possible to look at the progressivity of the tax system based on either raw dollars or percentages of income. And the Cons - with the help of the initial reporting on the numbers - are trying to highlight the latter rather than the former.

But while the difference matters in assessing relative benefits around the middle of the income scale, they're of no consequence for the bottom 10%. Amazingly enough, the Cons have managed to enforce such a consistent beggar-the-poor approach that the lowest tier has nonetheless managed to gain less than any other group even as a percentage of its already-meager income.

(And to be clear, the top 5 per cent have been plenty privileged in ways not captured by the relative-to-income metric. Not only did members of that group enjoy benefits near the top of the pack in absolute dollar terms, but they're also disproportionately reaping the fruits of corporate tax slashing which was excluded from the PBO's calculation.)

In sum, the PBO has confirmed what's seemed all too obvious from the beginning: the Harper Cons are firmly dedicated to avoiding doing any good for the Canadians who need it most.

Monday Morning Links

Assorted content to start your week.

- Jim Stanford looks into the fine print of the Hudak PCs' assumptions about corporate tax slashing and finds that even their own numbers show that most of the money gifted to corporations would be thrown away (emphasis added):

On second reading there are other interesting aspects to the Conference Board simulation of corporate tax reductions.  The one that jumped out at me was their estimate of increased business capital spending after the tax cut (reported in Table 5, and the main driver of economic benefits in the simulation), reported in the fifth line of Table 4.  They see an additional $133 million of business investment in the first year, rising to $227 million in the third year.  In other words, by their estimates, less than one dollar in three of the CIT cut is reinvested by business in new fixed capital investments.  This highlights the problem that has been experienced with CIT reductions as a stimulative tool.  They translate only weakly into new business spending.  That’s why the final gain in GDP (even counting indirect and induced multiplier effects) is always smaller than the initial cost of the tax cut.  Even in the Conference Board study, one big lasting legacy of CIT cuts will be an additional increment to corporate cash hoarding, worth over $600 million per year by the 10th year (comparing the value of the CIT reduction in that year to the modest increase in capital spending).  That sounds like a good reason not to do it at all.

Remember also that the Conference Board report did not incorporate (at the PCs’ request) the negative effects on GDP of employment from any offsetting reduction in other government programs (which the PCs have promised they would do, making the CIT cut supposedly “revenue neutral”).  They make this clear on p.5.  It is thus not a reasonable simulation of what the party is actually proposing.

- Meanwhile, Bill Curry reports on the Cons' choice to allow employers to import thousands of temporary foreign workers for the minimum wage rather than making effort to recruit local workers. And Julia Smith writes that the real issue with the TFWP lies in its development of jobs intended to be exploitative - no matter who ends up filling them:

(T)he jobs TFWP are filling do not come with the same rights that Canadian workers enjoy. TFWP visas for low wage jobs are tied to a specific employer and location, meaning TFWs can't leave one job for another if there's a problem. In many cases they're required to live in accommodation provided by their employer -- so if they lose their job they also lose their home.

Caregivers and agricultural workers, who make up the majority of TFWs, are not allowed to unionize. Instead, in cases of exploitation, they must submit individual grievances. As is well documented, when TFWs do complain, they risk unemployment, homelessness and deportation. One recruitment company emailed businesses with strategies to prevent TFWs from becoming 'Canadianized.' In others words, seeking Canadian labor standards.

Helena Sanchez, from the Temporary Foreign Workers Association of Quebec, notes, "We are paying taxes as Canadian citizens, but are not treated as citizens. We do not have the same rights as Canadians."
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Sanchez says she hopes that instead of seeing TFW as competition, Canadian workers will stand with TFW and demand better conditions for all. "If Canadians protect TFW rights, they are also protecting their rights," she says, pointing out that if employers have to offer the same working conditions, then competition for jobs also becomes impartial.

- Michael Harris looks at the latest Bruce Carson influence peddling scandal - and the judgment of the prime minister who's repeatedly allowed a convicted fraudster into his inner circle:

Since [Carson] himself was not yet five years out from the date that his own government employment ended, it was illegal for him to be dealing with public office holders over the development or amendment of any government policy; the awarding of any grant; or the arranging of a meeting between a public office holder and any other person.

Why was he able to do that? Carson’s passport to the highest offices in the land bears Stephen Harper’s face.

So do tell us Mr. Prime Minister, besides a criminal record, a taste for young escorts, and an alleged yen for unregistered lobbying, how did Bruce Carson come to sit by your side – and why did you give him so much power and so much of the people’s money?

An explanation and an apology would be appropriate right about now.

- Matthew Millar reports that two Con MPs are using their time and public resources to develop a partisan election application - and figuring to gain personally in the process. And Sophia Harris finds yet another example of the Cons refusing to collect evidence which would show their choices are wrong-headed - this time dropping the survey questions which have shown their publicly-funded propaganda campaigns to serve no useful purpose.

- Finally, Susan Lunn reports on a belated federal attempt to look into growing shortages of prescription medications. But while Lunn rightly notes the futility of trying to address that problem with a list of which drugs are lacking, it's worth noting the obvious remedy: rather than merely setting up a slightly more organized system to beg big pharma to meet public health needs, it's entirely possible to set up a public manufacturer to actually end the shortages.

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.
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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.
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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.