[Proculation]

Isn't supposed to be the right that is for rich and against the poor ?
It seems I am more for more wealth for the poor than you who, if I remember well, is left wing while I consider myself almost a libertarian.

[Bruce_the_vii]

You're post is to brief to follow. I'll assume you mean letting in poor immigrants. It behoves you to look after your own first. That is Canadians first. In fact that means friends and family, which is self-interest. I advocate a market place improvement for the worst off workers, which appeals to the left and the right. Thanks for responding to my post, mostly I don't generate much attention.

[Proculation]

But you said earlier that putting the minimum wage higher WILL decrease employement. Those person who won't get the jobs are the poorer: students, monoparental women, aged persons. That has nothing to do with the immigrants. You are talking like "more immigrants = less jobs offered" and totally ignore the immigrants who create jobs and wealth. We benefit much more from immigration than it hurts us. Else, we would not let them in. Remember: we are only 33 millions and the second biggest country on Earth.

[Bruce_the_vii]

Increasing minimum wage will cut jobs about 1/2 of a percent. The growth in employment in Calgary in the ten years to 2005 was 42%. So it's small potatoes.

The Immigration Department tells you immigrants will create jobs. They'll tell you that immigrants are superior, a sort of reverse racism. Ideas like this should be examined.

Just because the government lets in immigrants doesn't mean that it's the smart thing to do. In my opinion they are simply puffed up in Ottawa. They are letting immigrants into situations of low wages and it's dysfunctional.

I'm pro-immigrant myself. I think if you have good jobs then immigrants can fill in. However I advocate increasing the wages at the bottom to something closer to the traditional norms in Canada.

[Proculation]

But, you do understand that we need low wage labour ? We need people in Tim Hortons, restaurants, doing simple and repetitive jobs etc etc. We can't outsource that.

[Bruce_the_vii]

You need Tim Hortons like you need a hole in the head. If you raise minimum wage some of these businesses at the bottom will disappear. There will be a change in the basket of goods consumed. The businesses that disappear will be the least efficient with the least market appeal. The others will inflate and survive. The fix is in, in the nanny state these low wage jobs are highly subsidized in the end, do yourself a favour and forget these marginal businesses.

[Proculation]

If it was so simple ! You are not the only one thinking that way. It would be great if everyone was getting 20-30$/h. Unfortunetaly, it doesn't work like that. You can't control the market.

[Bruce_the_vii]

You can control the market. The Immigation Department does. I'm saying any immigration program will cause some unemployment and unemployment depresses the defacto minimum wage - so you should legislate the minimum wage to protect the worst off from this effect.

It'd be great if wages were $20 - $30, everyone agrees with that. Protecting the bottom is something that can be done though. This is popular because these days it's a family member that is working for low wages. In particular it's women whose main role is bringing up children rather than specializing in an employment skill.

In Alberta legislating minium wage to $13 would be a tax of about 1/2% of GDP. However, in the other main cities of Canada the employment rate is lower than Albeta and tightening these cities labour force would add substantially to the local GDP and compensate for any increase in minimum wage. So if you tighten and legislate you get a free lunch.

[Proculation]

I understand when you said it the first time. I just say it's a wrong reasoning and I explained it well. There will still be low wage labour so you will actually punish those you are trying to help by reducing the supply of jobs. Any manipulation of the market creates bad anomalies. That's what I meant by "you can't control the market".

The way I could see something like you say being applied is by assuring a earning to workers equivalent to 13$/h. Like, at the end of the year in your tax report, if you made less than X, the government gives you a check. But that would still create problems because people will be discourage to perform since they have a secured revenue. This idea is called negative income tax and was proposed by Milton Friedman.

[Bruce_the_vii]

If you legislated minimum wage up $2 you'd add 1/2% to unemployment and it's true it'd be harder to find a job. In the present downturn this is a concern. However they are continueing immigration and this has the same problem. In addition in the expansion phase of the business cycle immigration keeps unemployment at 3.5% and it would go down to 1% if left to itself. So increasing minimum wage will always cause unemployment as you say - the fix wouldn't be seemless.

Alberta is in much better shape than the rest of the country to weather a downturn. Compared to Alberta's high level of employment the real unemployment in Montreal, Toronto and Vancouver is about 15% currently. That is Alberta has more people working. So an increase in unemployment of several percent in Alberta is going to leave it well ahead of the rest of the country socially.

Also in a downturn people drop out of the labour force so there are still jobs available for the most determined, although they might be low wage jobs. Statistics Canada does not report this effect but I looked at the data for the last deep recession in 25 of the 25 cities there is detailed data on about 70% of the increase in unemployment went to a drop in the number of people in the labour force.

The government fools around with unemployment through immigration all the time. Adding 1/2 % to unemployment would just be part of process.

[Bruce_the_vii]

________The Immigration Disaster In
______Montreal, Toronto and Vancouver

In the past 35 year, since 1973, some 85% of immigrants have gone to Montreal, Toronto or Vancouver. These cities have been abused by the Immigration Department on the basis that experts say there is no statistical proof immigration causes unemployment. So now these cities’ vital statistics tell a story. It is that the Liberals and Conservatives have damaged them despite the fact they have healthy, robust growth. Some statistics follow.

Child Poverty in Main Canadian Cities
The 2006 Census gives child poverty in Canada’s main cities as follows:
Montreal City……..36.8%......(pop. 1,620,000)
City of Toronto……31.8%......(pop. 2,503,000)
Vancouver City……28.7%......(pop. 578,000)

The median income of families with children, 2005.
ONTARIO…………………............$54.3k
The City of Toronto (416)…..$41.5k
Arithmetic Difference……….($12.8k)

Low wage Data
City………………………..Percent of workers over 20
…………………………….earning $12 an hour or less
Calgary (at full employment)....7%
Montreal............................17%
Toronto……............................17%
Vancouver...............................15%

Real Unemployment in Main Canadian Cities
_________________Real____________Employment________Official
______________Unemployment_________Rate__________Unemployment
________________2008_______________2008____________2008
Calgary__________3.5%________________73.6%__________3.5%
Montreal_________17.5%______________59.5%___________7.4%
Toronto__________16.0%______________62.1%___________6.9%
Vancouver________14.8%______________62.4%___________4.3%

* The other standard measure of employment, the “employment rate” is used to estimate the real unemployment. Calgary is used as a reference point or gold standard. It’s adjusted for differences in people over 64.

[Bruce_the_vii]

A High Minimum Wage.

It’s possible in Canada to support a high minimum wage, a defacto $16.30 an hour.

In recent years in Alberta it’s been widely reported that Tim Hortons and that have had to pay significantly better than they do in the rest of Canada. Here’s the Statistics Canada data on low wages:


City………………………..Percent of workers over 20
…………………………….earning $12 an hour or less
………………………………..(2008 data)

Calgary....................................7%

Montreal...................................17%
Toronto……............................17%
Vancouver...............................15%



The thing of it is economic growth requires constant immigration and this tends to sustain unemployment and depress the defacto minimum wage, the wage to required to get reliable people that show up on time everyday. This is a tax on the poorest. To compensate and protect the poorest from growth the minimum wage should be legislated in the dynamic areas to $13 an hour. It might be $12 in Calgary at this time.

There’s a tax subsidy to low paid workers. If average wage is $22 an hour, all taxes are 40% of GDP and average wage is a wash between taxes and services you get some arithmetic. Taxes at average wage are $8.80 an hour while at $13 they are $5.20. So the difference, the subsidy, is $3.60 an hour. The $13 an hour plus the subsidy of $3.60 would make minimum wage a defacto $16.30 an hour. That’s 74% of average wage. It’s what the market would bear.

This is popular with the people I’ve talked to because low wages affect family. In particular they are a women’s issue as women are still largely involved with bringing up the children rather than sustaining a career.

[Bruce_the_vii]

Here's a lengthy article on the American Bank meltdown from a former chief economist at the IMF. He' says it's familiar territory for the IMF except that the USA financial industry is so powerful it will be hard to root out the culprets. The article is marked by easy flowing language on large concepts, is eloquent and reads well.

http://www.theatlantic.com/doc/200905/imf-advice

[Bruce_the_vii]

Here's a video of a bank expert on the financial crisis in America. He points out that about 10% of the Bank CEO's are fraud criminals and that it is still not known how bad the their books are. He says if the situation is not resolved it could drag the USA economy down for a decade.

http://www.pbs.org/moyers/journal/04032009/watch.html

My reading is this toxic loans problem is widely know. This video says it, Jim Flaherty has been saying it, all the honest bankers know it and are waiting for action.

[Bruce_the_vii]

A $12 an hour minimum wage would cost the well-to-do 0.13% of GDP. Here’s the arithmetic:

Some 23% of Canadian workers earn $12 an hour or less. That’s 3.2 million people. If half of these, that is those in the growth areas, were raised up to $12 the average increase might be $2 an hour. The arithmetic is that is 0.43% of GDP. However 40% of income is taxes, a common resource, so the real cost is only 0.26% of GDP. Then, with low wages at 23% of the population maybe half of all families have a low wage worker amongst them, so the resultant inflation is a transfer within the family. So the cost to well-off-families is the other half, 0.13% of GDP.

Conversely the savings well off families get from low wages is that 0.13% of GDP.