Thursday, October 27, 2016

Thursday Morning Links

This and that for your Thursday reading.

- Jordan Brennan points out why Nova Scotia (and other jurisdictions) should move past austerity economics:
The McNeil Liberals appear set to rack up budgetary surpluses through a strategy of public sector wage suppression. This is likely to backfire. It is an elementary insight of economic analysis that, just as one person's expenditure is necessarily another person's income, one sector's expenditure (in this case, the government) is necessarily another sector's income (namely, households and businesses).

By limiting public sector wage increases below prevailing inflation rates, the government will shrink household purchasing power and weaken aggregate demand. Furthermore, a strategy of public sector wage restraint may spill over into the private sector insofar as it signals to employers that they can scale back on wage increases without risking retention.

With GDP growth rates in Nova Scotia running at half the Canadian average and with income inequality hovering at a four-decade high it would take an impressive contortion of logic to assert that Nova Scotia's workforce is in need of a pay cut.
In the context of weak economic growth, the IMF has recently stated that budgetary deficits are preferable to surpluses and debt reduction. Austerity measures, the IMF continues, reduce human well-being, weaken aggregate demand and worsen unemployment.

Job creation should be made the top economic priority, not balancing the budget. The government should take advantage of ultra-low interest rates and invest in critical social and physical infrastructure such as health care, childcare, education and the transition to a low-carbon economy.

These measures will not only strengthen aggregate demand, but they will improve the quality of life for Nova Scotians. And from a fiscal standpoint, the increased debt needed to finance these investments can be reduced through organic growth.
- The Equality Trust examines the increasingly precarious financial state of many households in Great Britain. But Angella MacEwen writes that Alberta's increasing minimum wage represents an important step toward income security for workers (along with a stronger economy for everybody).

- In contrast, PressProgress points out that the Liberals have chosen to let the value of their much-ballyhooed child tax benefit erode - particularly for lower-income families.

- Hilary Beaumont reports on the lack of action toward the Libs' campaign promise to ensure that First Nations have safe drinking water. And CTV reports on the NDP's work to get the Libs to comply with their obligation to stop discriminating in funding child services.

- Finally, Jerry Dias writes that Canada is arriving at a moment of truth on electoral reform - and that there's no reason for MPs not to work on giving effect to widespread support for a proportional electoral system.

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