[Proculation]

ASLplease ASLplease:

Proc, I dont know what the correct economics101 answer is to that, but I think anytime we can produce a product here in Canada, we create jobs, GDP, and inovation.

I'm starting a business in the service industry, but if I can convert it to a manufacturing company, I would like that very much.

My answer would be a stretched comparison:

Let's say you decide to create a company making jeans. You base your business plan on a very basic concept: everybody buys jeans. You invest one million $ and build a little manufacture. You employ 10 employees to make jeans. Since they are not jobs demanding a lot of experience, you pay them 10$/h, 40 hours/week.

Let's say a pair of jeans takes one hour to make from the beginning to the end. Each pair worths 10$ of man work. Then, you add the fees to pay for your investment, to pay for the contract dealing, to pay for the transport, etc. Your cost is then 50$ a pair.

Your product in the store is next to a same quality pair of jeans from Morocco that sells at 40$. You won't sell any you say. Then, to help your business, the state decides to add an importing fees of 15$ for jeans from Morocco making the price 55$ a pair. It's great ! You sell a lot of jeans, you created 10 jobs, you increased Canada's GDP. That makes you and your ten employees happy.

However, now everyone has to spend 15$ more for a pair of jeans. A 15$ spent for nothing since the same pair of jeans from Morocco was the same quality. You pay 15$ more for a 10$ worth work, to keep 10 low-wage jobs in the country while you could have bought a pair of jeans and spend that 15$ in a restaurant, a movie, a cauldron, etc.

It's a very simplified example but the point is that it is not true that protecting jobs is beneficial for the whole population. While it's true some people loose jobs, the long term effect in the economy worths it.

[Proculation]

KorbenDeck KorbenDeck:

Proculation Proculation:

Hong Kong, Japan, Luxembourg, Switzerland to name a few. They are not based on manufacturing.

Manufacturing is a way for a country to develop and improve an economy. When you are passed a certain stage of development, manufacturing is left to other countries to get into a high level economy.

Don't tell me you would like to bring back the manufacture of t-shirts or shoes back in Canada.

Japan has a very large manufacturing base which is very important to its economy, very very important. I do not know Hong Kongs economy so cannot comment. Luxembourg and Switzerland make their money from being the bankers for the rest of the world and have a small enough population that this is possible. You do not need huge amounts of bankers to provide service to huge amounts of people, so Canada basing its economy off that model could not work. Also Luxembourg and Switzerland have no "flex" power they cannot use their economies to project any kind of influence, and their dependence on other nations choosing them to do their banking makes them vulnerable to being strong armed.

Germany is also a very large and strong economy and again they have a large manufacturing base, they are also the second largest exporter in the world after China.

I understand there is an idea that says that all of a nations currencies must end up eventually making its way back to its home nation and that the more a currency is being circulated the better for said nation. However when you get into a trade deficit like the USA is you are forced to borrow and borrow and borrow, its the same as increasing you credit limit on your credit card, for the immediate moment it has benefited you (you got to buy that new tv, or pay a bill) but long term you are making thing worst for yourself. That is what Canada is doing now, we are borrowing money so that we can send MORE money outside the country without ensuring that the money will return to Canada at a later time.

Yes I would like to see Canada making t-shirts and shoes again, not being the primary industry but enough so that at lest we are offsetting the trade deficit that Canada is now starting to develop (manufacturing has also been declining as % of GDP go figure). Not everyone can be a doctor or a banker our population is to large to be the bankers of the world. Even the service industry which some thought would protect us from outsourcing is now being outsourced (you can hire a lawyer in India to take care of you legal work for $20 an hour vs a lawyer here for $300 an hour) Canada needs manufacturing because hello we have a over half a trillion dollars of debt we need to pay off and trade deficits make a bad problem a even worse problem and despite what some economist say we cannot inflate our debt away.

Manufacturing is big money and at lest in western nations the big money is more evenly distributed between corporate and employees (we make more off personal income taxes vs corporate taxes). Canada can be a large manufacturing without having to import materials which means no one else can suddenly strong arm us by stopping the export of something to us, like what China did to Japan a while ago over a damn fishing boat caption. Retail jobs (which we used to replace manufacturing jobs) keeps the money in the corporate bank accounts and a few head management. We are always going to have people at the "bottom" of the economy's work force, but its better that our bottom being manufacturing jobs that pay a decent wage and generate Canada trade vs retail jobs that pay minimum wage and gain Canada no more trade.

Just so we understand us more, when I talk about the manufacturing industry, I mean "primary" manufacturing. Things like clothes and other products that do not require expertise.

When you talk about Japan and Germany, they manufacture high level products. They are the best in their domain. They create the best products at the best price. Someone who want to start a lenses producing company to compete Germany would have to be a genius (only an example).

The key word here is "specialization".

[Bruce_the_vii]

QBC QBC:

I finished high school in the mid 80's, entered the work force while going to college. (had to pay for it somehow) I have been unemployed for a total of three months in all the years since that time. Through recessions, industry slow downs and the like. It simply boiled down to the fact that I refuse to be out of work, period. I've had to take jobs that I didn't like, for people I had no respect for and who paid me shit wages. I did it because it just had to be done. I stayed at the shit job until a better one came along and off I went, always trying to improve my condition, but never, ever did I play the blame game. This is my life and it will only be what I make of it or not make of it. I will not rely on government handouts, pray for good luck to make my life better, or hope that someone bails me out of a tough time. I will get there cause of what I do. For me, it's a matter of pride and self respect.

Maybe you did well but there are still lots of problems and other people took the hit. This idea that the work ethic can solve your personal problem over looks the fact someone is going to take the hit.

My own story is I worked hard too: I have some 41 computer courses to my credit including some self study. However their market value is zero because of technological change and the computer field is way over crowded.

[Brenda]

Proculation Proculation:

ASLplease ASLplease:

Proc, I dont know what the correct economics101 answer is to that, but I think anytime we can produce a product here in Canada, we create jobs, GDP, and inovation.

I'm starting a business in the service industry, but if I can convert it to a manufacturing company, I would like that very much.

My answer would be a stretched comparison:

Let's say you decide to create a company making jeans. You base your business plan on a very basic concept: everybody buys jeans. You invest one million $ and build a little manufacture. You employ 10 employees to make jeans. Since they are not jobs demanding a lot of experience, you pay them 10$/h, 40 hours/week.

Let's say a pair of jeans takes one hour to make from the beginning to the end. Each pair worths 10$ of man work. Then, you add the fees to pay for your investment, to pay for the contract dealing, to pay for the transport, etc. Your cost is then 50$ a pair.

Your product in the store is next to a same quality pair of jeans from Morocco that sells at 40$. You won't sell any you say. Then, to help your business, the state decides to add an importing fees of 15$ for jeans from Morocco making the price 55$ a pair. It's great ! You sell a lot of jeans, you created 10 jobs, you increased Canada's GDP. That makes you and your ten employees happy.

However, now everyone has to spend 15$ more for a pair of jeans. A 15$ spent for nothing since the same pair of jeans from Morocco was the same quality. You pay 15$ more for a 10$ worth work, to keep 10 low-wage jobs in the country while you could have bought a pair of jeans and spend that 15$ in a restaurant, a movie, a cauldron, etc.

It's a very simplified example but the point is that it is not true that protecting jobs is beneficial for the whole population. While it's true some people loose jobs, the long term effect in the economy worths it.

You forget to mention that you require a Masters degree of your employees, which puts them in a $40k debt to land a $10/hr job.

(an old co-worker of mine (a legal assistant), had a student debt of $20k, to make the same I did, $13/hr. She was the one responsible tho...)

[Proculation]

Brenda Brenda:

Proculation Proculation:

ASLplease ASLplease:

Proc, I dont know what the correct economics101 answer is to that, but I think anytime we can produce a product here in Canada, we create jobs, GDP, and inovation.

I'm starting a business in the service industry, but if I can convert it to a manufacturing company, I would like that very much.

My answer would be a stretched comparison:

Let's say you decide to create a company making jeans. You base your business plan on a very basic concept: everybody buys jeans. You invest one million $ and build a little manufacture. You employ 10 employees to make jeans. Since they are not jobs demanding a lot of experience, you pay them 10$/h, 40 hours/week.

Let's say a pair of jeans takes one hour to make from the beginning to the end. Each pair worths 10$ of man work. Then, you add the fees to pay for your investment, to pay for the contract dealing, to pay for the transport, etc. Your cost is then 50$ a pair.

Your product in the store is next to a same quality pair of jeans from Morocco that sells at 40$. You won't sell any you say. Then, to help your business, the state decides to add an importing fees of 15$ for jeans from Morocco making the price 55$ a pair. It's great ! You sell a lot of jeans, you created 10 jobs, you increased Canada's GDP. That makes you and your ten employees happy.

However, now everyone has to spend 15$ more for a pair of jeans. A 15$ spent for nothing since the same pair of jeans from Morocco was the same quality. You pay 15$ more for a 10$ worth work, to keep 10 low-wage jobs in the country while you could have bought a pair of jeans and spend that 15$ in a restaurant, a movie, a cauldron, etc.

It's a very simplified example but the point is that it is not true that protecting jobs is beneficial for the whole population. While it's true some people loose jobs, the long term effect in the economy worths it.

You forget to mention that you require a Masters degree of your employees, which puts them in a $40k debt to land a $10/hr job.

(an old co-worker of mine (a legal assistant), had a student debt of $20k, to make the same I did, $13/hr. She was the one responsible tho...)

I didn't want to 'anger' you with my comments. I do not put the responsibility of a low wage worker only on him. Life is more complicated than that. I just say that it is not true to say that when you do not have the capacity to get a MBA, you can't get a job that pays well.

[Brenda]

That's true.
You're not angering me at all, I guess it just is what it is.
The hard part is that when you get invited for an interview, and you are one of 12 interviewed, you can expect another "no". And that is when you hear anything at all, because the other 120 people who applied, don't even get a response.

I'm just saying that "Hey, don't whine, just get a freaking job that pays well", is bogus. It just doesn't work that way, not even in the low paying jobs.

[Bruce_the_vii]

Proculation Proculation:

I didn't want to 'anger' you with my comments. I do not put the responsibility of a low wage worker only on him. Life is more complicated than that. I just say that it is not true to say that when you do not have the capacity to get a MBA, you can't get a job that pays well.

I work with some low wage earners. They are not very education oriented. Their idea is that they'll work-for-a-living rather than go to school. Their expectations are not high. They just don't think go-to-school, they are going to work hard for an employer.

[Proculation]

Brenda Brenda:

That's true.
You're not angering me at all, I guess it just is what it is.
The hard part is that when you get invited for an interview, and you are one of 12 interviewed, you can expect another "no". And that is when you hear anything at all, because the other 120 people who applied, don't even get a response.

I'm just saying that "Hey, don't whine, just get a freaking job that pays well", is bogus. It just doesn't work that way, not even in the low paying jobs.

I totally understand that. I will tell you a confidence: I'm looking for a steady job in my domain since months. I hate interviews since it's the first time it happened to me to be looking for a job and I'm not very good at that. I get contracts from contacts but I would prefer a permanent job to ease on the stress.

[QBC]

Bruce_the_vii Bruce_the_vii:

QBC QBC:

I finished high school in the mid 80's, entered the work force while going to college. (had to pay for it somehow) I have been unemployed for a total of three months in all the years since that time. Through recessions, industry slow downs and the like. It simply boiled down to the fact that I refuse to be out of work, period. I've had to take jobs that I didn't like, for people I had no respect for and who paid me shit wages. I did it because it just had to be done. I stayed at the shit job until a better one came along and off I went, always trying to improve my condition, but never, ever did I play the blame game. This is my life and it will only be what I make of it or not make of it. I will not rely on government handouts, pray for good luck to make my life better, or hope that someone bails me out of a tough time. I will get there cause of what I do. For me, it's a matter of pride and self respect.

Maybe you did well but there are still lots of problems and other people took the hit. This idea that the work ethic can solve your personal problem over looks the fact someone is going to take the hit.

My own story is I worked hard too: I have some 41 computer courses to my credit including some self study. However their market value is zero because of technological change and the computer field is way over crowded.

Yep, there were a lot of people who took a hit, especially in the technology industry, the answer, move on. You want to know why that young lad I talked about did so well at such a young age in today's economy? Cause he went into a trade. Everyone thought the computer industry was going to be the where all, end all. Now, if you actually want to make a decent living, it's best to be a blue collar worker in a trade. You want a $30+ per hour job in a short period of time, go into the trades and forget the technology sector. What everyone seemed to forget is that a computer isn't going to build a building, run pipe, drill for oil, wire your office, re & re a diesel engine out of a Kenworth or dig a hole with a backhoe. I know journeymen who are making "sick" money, well into the six figures a year, just have to be prepared to be outdoors at -40 or +30. I'm not so I sell the stuff those guys need every day to keep them working. If they're rockin and busy, then I am too. But after 25 years of working in the industrial/automotive/HD supply business, I guess I've paid my dues too.

[Canadian_Mind]

Proculation Proculation:

ASLplease ASLplease:

Proc, I dont know what the correct economics101 answer is to that, but I think anytime we can produce a product here in Canada, we create jobs, GDP, and inovation.

I'm starting a business in the service industry, but if I can convert it to a manufacturing company, I would like that very much.

My answer would be a stretched comparison:

Let's say you decide to create a company making jeans. You base your business plan on a very basic concept: everybody buys jeans. You invest one million $ and build a little manufacture. You employ 10 employees to make jeans. Since they are not jobs demanding a lot of experience, you pay them 10$/h, 40 hours/week.

Let's say a pair of jeans takes one hour to make from the beginning to the end. Each pair worths 10$ of man work. Then, you add the fees to pay for your investment, to pay for the contract dealing, to pay for the transport, etc. Your cost is then 50$ a pair.

Your product in the store is next to a same quality pair of jeans from Morocco that sells at 40$. You won't sell any you say. Then, to help your business, the state decides to add an importing fees of 15$ for jeans from Morocco making the price 55$ a pair. It's great ! You sell a lot of jeans, you created 10 jobs, you increased Canada's GDP. That makes you and your ten employees happy.

However, now everyone has to spend 15$ more for a pair of jeans. A 15$ spent for nothing since the same pair of jeans from Morocco was the same quality. You pay 15$ more for a 10$ worth work, to keep 10 low-wage jobs in the country while you could have bought a pair of jeans and spend that 15$ in a restaurant, a movie, a cauldron, etc.

It's a very simplified example but the point is that it is not true that protecting jobs is beneficial for the whole population. While it's true some people loose jobs, the long term effect in the economy worths it.

Using your same example, when buying the 40 dollar Morocco jeans, thats 30 of the 40 dollars effectively being exported that are no longer in the country(assuming 10 is spent on transit, taxes, etc), than aren't necessarily going to be traded back if Morocco chooses not to buy the equivalent amount of canadian product. However, for every Canadian-made pair of jeans, all 50 stay in country.

To make it fair, lets assume both pairs of jeans cost 50 dollars, the 40 dollar Morocco jeans with a 10 dollar surcharge, and the 50 dollar Canadian jeans.

Whether the surcharge is applied or not, that is 10 dollars that makes it back into the Canadian economy, plus lets assume 10 dollars for shipping, taxes, etc. So the 50 dollar Morocco jeans put 20 dollars total into the Canadian economy.

The Canadian jeans, made in house with Canadian workers and Canadian-produced capital, put 50 dollars back into the Canadian economy for every 50 spent.

50 dollars put into the Canadian economy benefits us far more than 20 into Canada and 30 into Morocco.

Yes, there is the whole notion of "Global Economy." But there is zero guarantee that every dollar we spend on Morocco-made products is going to be returned to us when Morocco buys Canadian products. They might instead to choose to purchase their shit from USA, Germany, or Japan, or they make it themselves. This is what eventually leads to a trade deficit, which I believe is what we are in right now. As far as I and the layman are concerned, the more money you can keep circulating within your own borders, the better.

[Proculation]

Canadian_Mind Canadian_Mind:

Proculation Proculation:

ASLplease ASLplease:

Proc, I dont know what the correct economics101 answer is to that, but I think anytime we can produce a product here in Canada, we create jobs, GDP, and inovation.

I'm starting a business in the service industry, but if I can convert it to a manufacturing company, I would like that very much.

My answer would be a stretched comparison:

Let's say you decide to create a company making jeans. You base your business plan on a very basic concept: everybody buys jeans. You invest one million $ and build a little manufacture. You employ 10 employees to make jeans. Since they are not jobs demanding a lot of experience, you pay them 10$/h, 40 hours/week.

Let's say a pair of jeans takes one hour to make from the beginning to the end. Each pair worths 10$ of man work. Then, you add the fees to pay for your investment, to pay for the contract dealing, to pay for the transport, etc. Your cost is then 50$ a pair.

Your product in the store is next to a same quality pair of jeans from Morocco that sells at 40$. You won't sell any you say. Then, to help your business, the state decides to add an importing fees of 15$ for jeans from Morocco making the price 55$ a pair. It's great ! You sell a lot of jeans, you created 10 jobs, you increased Canada's GDP. That makes you and your ten employees happy.

However, now everyone has to spend 15$ more for a pair of jeans. A 15$ spent for nothing since the same pair of jeans from Morocco was the same quality. You pay 15$ more for a 10$ worth work, to keep 10 low-wage jobs in the country while you could have bought a pair of jeans and spend that 15$ in a restaurant, a movie, a cauldron, etc.

It's a very simplified example but the point is that it is not true that protecting jobs is beneficial for the whole population. While it's true some people loose jobs, the long term effect in the economy worths it.

Using your same example, when buying the 40 dollar Morocco jeans, thats 30 of the 40 dollars effectively being exported that are no longer in the country(assuming 10 is spent on transit, taxes, etc), than aren't necessarily going to be traded back if Morocco chooses not to buy the equivalent amount of canadian product. However, for every Canadian-made pair of jeans, all 50 stay in country.

To make it fair, lets assume both pairs of jeans cost 50 dollars, the 40 dollar Morocco jeans with a 10 dollar surcharge, and the 50 dollar Canadian jeans.

Whether the surcharge is applied or not, that is 10 dollars that makes it back into the Canadian economy, plus lets assume 10 dollars for shipping, taxes, etc. So the 50 dollar Morocco jeans put 20 dollars total into the Canadian economy.

The Canadian jeans, made in house with Canadian workers and Canadian-produced capital, put 50 dollars back into the Canadian economy for every 50 spent.

50 dollars put into the Canadian economy benefits us far more than 20 into Canada and 30 into Morocco.

Yes, there is the whole notion of "Global Economy." But there is zero guarantee that every dollar we spend on Morocco-made products is going to be returned to us when Morocco buys Canadian products. They might instead to choose to purchase their shit from USA, Germany, or Japan, or they make it themselves. This is what eventually leads to a trade deficit, which I believe is what we are in right now. As far as I and the layman are concerned, the more money you can keep circulating within your own borders, the better.

It was a very basic comparison. Trading is not that simple in real life.

"However, for every Canadian-made pair of jeans, all 50 stay in country."

You are mixing the cost and the value. With that logic, we should live in autarky, be self-sufficient and keep our money in our country.

Like I said, the example was very basic. In a macroeconomic model, maybe you buy jeans from Morocco but maybe Russia is buying nickel from a Canadian mine.

In the jeans example, 10 jobs are created and money are kept into the country but thousands of people have to pay more for their jeans while they could have saved from a trade with Morocco. That money saved could have created specialized and high level jobs in Canada making high markup products that could be sold to France or Germany.

Anyway, we won't argue on the benefices of free trade in here. That's proven that every parties benefit from free trade since hundreds of year. Protectionism is an emotional response to the bad side of free trade but when you analyze the cost/benefits, free trade is always the best way to go, by a large margin.

[andyt]

http://www.theglobeandmail.com/archives/article682203.ece

$1:

Earnings among the richest fifth of Canadians grew 16.4 per cent between 1980 and 2005 while the poorest fifth of the population saw earnings tumble 20.6 per cent over the 25-year time period, Statistics Canada said in its 2006 census release on income and earnings. Earnings among people in the middle stagnated.

That earnings didn't budge for middle income earners was particularly surprising, given that the economy has generally expanded over the past quarter century, said one business professor.

“It's not just that there's inequality growing. We knew that. But that the middle income earner is flat-lining over a long period of time – that's stunning to me,” said Tony Frost, professor at the Richard Ivey School of Business at the University of Western Ontario, who'd previously figured the middle class was moving up....

On average, salaries haven't changed much over the past quarter century. Median earnings of Canadians who work full time edged to $41,401 in 2005 from $41,348 in 1980, measured in constant dollars.

For those of you who think this is all good. Why were we able to have a much more egalitarian income distribution before, yet have the country actually do better and people have more hope than now. If you see this as an inevitable trend, just how far do you see it going. Do you really think we can have a successful, peaceful society if this trend continues? At what point will costs for the justice and health systems be enough to convince you it may not be worth it to be in that top 1/5 (which I really question how many of you are) if you have to deal with all the social fallout from this inequality? China is terrified of social unrest if their tremendous growth rate slackens at all - which it will as the US turns into another Japan, at best (ie stagnation).

[martin14]

Yes, trade is better, but it must be trade beneficial to both partners.

If the Moroccans dont buy anything from us, it is not a beneficial relationship.

[Proculation]

martin14 martin14:

Yes, trade is better, but it must be trade beneficial to both partners.

If the Moroccans dont buy anything from us, it is not a beneficial relationship.

That's not true for two reasons:

1st: Moroccans reduce the cost of jeans for every Canadians so giving them more money to spend on other things.

2nd: Free trade is a diplomatic issue. Cut trades with Morocco and you may anger other countries who would not want to trade with you. You may keep the manufacture of the jeans in Canada but you may loose the market of carpets from Turkey.

[andyt]

$1:

Ultra-rich getting richer: study

http://ca.news.yahoo.com/s/capress/101201/national/super_rich

$1:

Canada has entered a 1920s-like Gilded Age, where the super-rich consolidate their wealth while the middle class stagnates.

That's the conclusion of a new study based on income-tax forms filed up until 2007, showing that the richest one per cent of Canadians took home 13.8 per cent of all incomes claimed that year.

The share of total income going to the richest of the rich has risen steadily since the early 1980s, reversing a long-term trend toward a more equal distribution of the country's income during the postwar '50s, '60s and '70s, the study says...

The numbers show that the richest one per cent quickly gained ground in Canada between 1925 and 1935. It was the era epitomized by the writings of Horatio Alger — the days of rags to riches, when millions of poor North Americans believed they could strike it rich.

"Like the Gilded Age a century ago, Canada is awash in money generated by an emerging new global economy," Yalnizyan writes. "During both slow and rapid periods of growth, incomes have increasingly become concentrated in the hands of the elite few rather than creating greater prosperity for all."

The inequality gap of the '20s and early '30s eventually collapsed and then switched direction with the Second World War, narrowing and steadily declining until about 1982. Since then, the super-rich have gradually claimed larger and larger pieces of the total income pie.

"Most Canadians are inching their way through recovery, trying to hang on to what they've got," Yalnizyan writes. "But for some Canadians, things have never been so good."...

In his earlier paper, Nicholson warned of social unrest if the trend towards increasing inequality were to persist. The trend has indeed persisted, but Nicholson said any backlash would likely start in the United States, where the inequality is far more exacerbated than here in Canada.