Brian's message:
our TOP priority in TORONTO AND IN canada should be
full employment (<5%)
FULL EMPLOYMENT = TIGHT LABOUR MARKET
Unemployment in the US peaked at around 10% to 10.5% in 2009. Canada's unemployment rate reached a peak around 8% to 8.5%.
Today, the US unemployment rate is under 4% - and many experts say the US is close to "Full Employment", though of course many Americans might have just stopped looking for a job, have only part-time jobs or have tenuous jobs. Regardless, their unemployment rate has dropped on the order of 5%.
Meanwhile, in Canada the unemployment rate is stuck around 6% - a drop of only 2% to 2.5% in 8 years.
Today, the US unemployment rate is under 4% - and many experts say the US is close to "Full Employment", though of course many Americans might have just stopped looking for a job, have only part-time jobs or have tenuous jobs. Regardless, their unemployment rate has dropped on the order of 5%.
Meanwhile, in Canada the unemployment rate is stuck around 6% - a drop of only 2% to 2.5% in 8 years.
Here is a longer term comparison - but notice how Canadian unemployment rates were consitently higher than in the US from around 1982 onwards, with a particularly large gap starting around 1990.
And here is Canada's unemployment rate going back to the end of World War 2. Note how the unemployment rate was almost always below 6% up until 1974, and it was below 4% until the recession of 1957.
And when we look at inflation, notice that inflation of 2% has been the rule since 1990 - yet these are the years of stagnant incomes, unlike the 80s when the inflation target was around 4% and unemployment plummetted, or in the mid to late 60s when inflation was 4%.
full employment and reducing INEQUALITY AND poverty
The economic tools exist, yet our politicians and the Bank of Canada are afraid or unwilling to use them. Mainly, this is because of the economic orthodoxy that says low inflation has to be the top priority. Supposedly, little old ladies on pensions will be hurt if we have inflation, but the pain caused by recessions and higher than necessary unemployment is ignored:
- students can't find work in their filed when they get out of university.
- older workers nearing retirement age can't find jobs and don't have the ability to claim OAS, GIC and CPP for several years
- small businesses and larger ones go broke due to the lack of economic prosperity - these businesses take years to replace and the owners/investors permanently lose their capital (maybe their life savings)
It is all a matter of supply and demand. A tight labour market means that anyone who wants a job can find one, and quite likely, they can land a job that uses their full experience and education.
In a tight job market, people can refuse to take tenuous, contract or part-time work unless that is the type of work they want. Employers who only offer low paid and insecure employment will find few takers, so they have to offer decent jobs at decent wages.
Employers in a tight job market have to offer training to fill jobs, instead of passing the buck or waiting until they can find someone with the skills they need. We saw this around 2006 when the unemployment rate in Canada was around 6%.
In a tight job market, when it comes to hiring or promotions, employers find it harder to discriminate against groups who traditionally have been discriminated against (visible minorities, women, aboriginals, people with disabilities, etc.).
A tight labour market gives working people power to say no, or to quit and easily find new employment if they are treated unfairly.
And for those who read the business pages, a tight labour market also means an increase in Canada's terrible record of productivity. Higher wages mean investments in machinery or technology make more sense. Low wage industries find they cannot compete against industries that can afford to pay a living wage - and if we lose those low wage jobs to Mexico or China, the workers affected can find new jobs much easier than if the job market is weak.
Higher wages in and of themselves reduce inequality and poverty - the need or amount of government subsidies for housing, day care or student loan relief are lower if people have good paying jobs.
What has happened over the last few decades is that any benefits of increased productivity have gone entirely to the owners, investors and executives of businesses, instead of working people getting a share of the increased wealth from such things as new technologies or even the increased quality of the workforce (higher education and skills).
Some in the US are saying that their economy is approaching full employment (about 4.9% unemployment), and they are seeing wages rising as there as a result. In the US though, the statistics are a little different than Canadians one, and many discouraged workers are excluded form their numbers.
Full employment (under 5%) in Canada is critical in reducing the scope and scale of the programs needed to address our problems with poverty, and it will free up money to spend on those people who can't work and thus cannot benefit from getting a job or getting higher income merely from higher wages.
- students can't find work in their filed when they get out of university.
- older workers nearing retirement age can't find jobs and don't have the ability to claim OAS, GIC and CPP for several years
- small businesses and larger ones go broke due to the lack of economic prosperity - these businesses take years to replace and the owners/investors permanently lose their capital (maybe their life savings)
It is all a matter of supply and demand. A tight labour market means that anyone who wants a job can find one, and quite likely, they can land a job that uses their full experience and education.
In a tight job market, people can refuse to take tenuous, contract or part-time work unless that is the type of work they want. Employers who only offer low paid and insecure employment will find few takers, so they have to offer decent jobs at decent wages.
Employers in a tight job market have to offer training to fill jobs, instead of passing the buck or waiting until they can find someone with the skills they need. We saw this around 2006 when the unemployment rate in Canada was around 6%.
In a tight job market, when it comes to hiring or promotions, employers find it harder to discriminate against groups who traditionally have been discriminated against (visible minorities, women, aboriginals, people with disabilities, etc.).
A tight labour market gives working people power to say no, or to quit and easily find new employment if they are treated unfairly.
And for those who read the business pages, a tight labour market also means an increase in Canada's terrible record of productivity. Higher wages mean investments in machinery or technology make more sense. Low wage industries find they cannot compete against industries that can afford to pay a living wage - and if we lose those low wage jobs to Mexico or China, the workers affected can find new jobs much easier than if the job market is weak.
Higher wages in and of themselves reduce inequality and poverty - the need or amount of government subsidies for housing, day care or student loan relief are lower if people have good paying jobs.
What has happened over the last few decades is that any benefits of increased productivity have gone entirely to the owners, investors and executives of businesses, instead of working people getting a share of the increased wealth from such things as new technologies or even the increased quality of the workforce (higher education and skills).
Some in the US are saying that their economy is approaching full employment (about 4.9% unemployment), and they are seeing wages rising as there as a result. In the US though, the statistics are a little different than Canadians one, and many discouraged workers are excluded form their numbers.
Full employment (under 5%) in Canada is critical in reducing the scope and scale of the programs needed to address our problems with poverty, and it will free up money to spend on those people who can't work and thus cannot benefit from getting a job or getting higher income merely from higher wages.