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  • Ontario's middle and working class families are losing ground August 15, 2017
    Ontario is becoming more polarized as middle and working class families see their share of the income pie shrinking while upper middle and rich families take home even more. New research from CCPA-Ontario Senior Economist Sheila Block reveals a staggering divide between two labour markets in the province: the top half of families continue to pile […]
    Canadian Centre for Policy Alternatives
  • Join us in October for the CCPA-BC fundraising gala, featuring Senator Murray Sinclair August 14, 2017
    We are incredibly honoured to announce that Senator Murray Sinclair will address our 2017 Annual Gala as keynote speaker, on Thursday, October 19 in Vancouver. Tickets are now on sale. Will you join us? Senator Sinclair has served as chair of the Truth and Reconciliation Commission (TRC), was the first Indigenous judge appointed in Manitoba, […]
    Canadian Centre for Policy Alternatives
  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
  • What’s next for BC? July 4, 2017
    Five weeks ago the CCPA-BC began a letter to our supporters with this statement: “What an interesting and exciting moment in BC politics! For a bunch of policy nerds like us at the CCPA, it doesn’t get much better than this.” At the time, we were writing about the just-announced agreement between the BC NDP […]
    Canadian Centre for Policy Alternatives
  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

Economic Climate and Inequality

The December issue of the quarterly Economic Climate for Bargaining publication I produce is now on-line.  This issue has a number of pieces on issues of inequality, including:

  • Rising inequality is hurting our economy
  • Labour rights, unions and the 99%
  • Canadian economy bleeding jobs; public sector cuts to intensify
  • Recession and cuts hit Aboriginal and racialized workers hardest

It also has sections with summaries of Canadian and provincial forecasts of main economic indicators, and discussions of  developments in inflation and wages increases by major sector and province.  It picks up on a number of discussions that have taken place on this blog.

The final figures aren’t in yet — and there are different ways of measuring it– but it looks like real wages will likely decline by the greatest amount since 1995.

A number of relevant reports came out after this publication went to translation.  These include:

  • Mark Carney’s  recent speech where I was heartened to see him emphasize that the problem we face is one of prolonged deficient demand.  (It was also interesting to note that one of the rationales cited for a lower than zero inflation target in the Bank of Canada’s Background document on renewal of the inflation target was it could provide workers with real wage gains when nominal wages are sticky.)
  • The IMF report on Canada issued published yesterday also raises concern overvalued house prices and the impact a correction would have on the economy through the wealth effect.  I wrote a piece on this in the Economic Climate publication four years ago.  At that time, my estimates were that Canadian real estate was overvalued by about 20% or $500 billion: with a housing wealth effect (MPC) of 6% as estimated by the Bank of Canada, that means that a correction would reduce GDP by about 2%.   The more sophisticated calculations in the IMF report are that house prices in Canada are overvalued by about 10% and that the MPC related to housing wealth is 4.3%.  As a result they report a smaller impact on GDP.
  • It is also good to see Don Drummond has an open enough mind to now issue a mea culpa about the economic policies he implemented and espoused for years, summarized just five years ago in his Economists’ Manifesto for Curing Ailing Productivity Growth.  At that time, he said there there was broad consensus among economists for those policies.  I suppose  he wasn’t reading this blog.
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