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The Progressive Economics Forum

Raise Wages, Train Workers

I have been hard on our new Employment and Social Development Minister, Jason Kenney, for buying into a widespread myth about labour shortages and skill mismatches in Canada. So, to give credit where credit is due, it appears Minister Kenney has been listening to the growing chorus of voices disputing the existence of a labour shortage in Canada.

Surprisingly (or not), Minister Kenney turns to a simple market solution to business complaints of difficulty finding candidates: raise wages. “The single most powerful tool employers have to address labour skill shortages is raising wage levels,” Kenney reportedly told his business audience. This was not a simple slip of the tongue, accidentally speaking truth to a friendly audience – Kenney later repeated the statement on twitter, saying: “Employers should use market mechanisms, like higher wages & investments in training, to help address skill shortages”. (It’s interesting that this message is coming from the one-time provider of low-wage, easily exploitable migrant workers through the TFWP).

The advantage to this approach is that higher wages are an extremely effective signal for job seekers, and investments in training can pay significant dividends for both employers and employees, and in fact are key to future productivity growth in Canada.

And, of course, the government has a wonderful new plan to encourage employers to invest in training: the Canada Job Grant.

Never mind that the Canada Job Grant proposes to take its funding from a pot already funding training for vulnerable workers who don’t qualify for EI. Never mind that there is no evidence that this program will encourage *new* employer spending on training, but instead is likely to subsidize existing employer training schemes. And never mind that $300 million toward training is a relatively tiny drop in the bucket of what is needed.

So, while I applaud the Minister on his assessment that employers need to raise wages and increase training, I remain puzzled by where this government chooses to intervene in the labour market. To get the ‘most bang for your buck’, as they say, governments should invest in areas where businesses won’t and individuals can’t. Instead, the Canada Job Grant does the opposite, giving employers money for training from a pot of money dedicated to helping unemployed workers who have fallen through the cracks.

At the end of the day, despite the tough talk, Kenney is still selling something that looks a lot like corporate welfare at the expense of the real ‘little guy’.

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Comments

Comment from Paul Tulloch
Time: November 14, 2013, 5:38 pm

I guess that is the extent of the federal Training Strategy- Kenney at least admitting there is a problem- is this like a 12 step program for Labour and HR Ministers in Canada? First it was denial- now we have admitting to the problem- can we skip acceptance and get on with the rest of it! We will need a full fledged training strategy and 300 million still kind of smells of denial, so maybe we are still in step one. We need training and investment by the corporate sector and that should be partnered with a whole lot of public- that is what it will take for a recovery out of this economic space.

Sadly Canada suffered another plant closure yesterday- the Heinz plant in Ontario- another casualty of the high dollar. And to think everybody kisses the ground that Warren Buffet walks on- he is just another one of the groups buys the companies up and chops them up and shares rise- profits increase and workers lose. Warren Buffet yes he is a genius? Buys up Ketchup and shuts down plants shares rise? So who could have ever envisioned such a magically route to wealth generation! Great work Mr Buffet. Such a stellar man.

Comment from Paul Tulloch
Time: November 25, 2013, 12:06 am

I am starting to believe the best way to train a worker is to teach them speculation skills. Once one gets through the discourse and sugar coated hyperbola that envelops the financial industry- it boils down to speculation- and risk aversion through controlling the house. Truly- and the central bankers are willing partners in it all- it truly should be the spectacle that we all are pointing at with both economic hands- the visible kind! Another fabulous example is Bitcoin- I have been researching Bitcoin, and it a mind boggling exercise in defining value.

Basically we should be training every worker to develop and market an algorithm that encrypts a mathematical formula that once you solve that encryption, you generate currency at a set and steady release rate- sadly the amount of power being put to computers to figure out the next encryption of Bitcoin currency- they call it “mining” is now at 74,000 megawatt hours- enough to power a good sized town! I swear if this is not boiling frogs in the central banks I am not sure what will.

So kids- get to school and develop those speculative skills so that you too can join the math people out there in the finance industry who create value from thin air- yet somehow when a government wants to build a road, hospital or school- it somehow defies the logic of austerity!! Bitcoin just went from being worth a total of 100 million US dollars to over 900 million in just 2 months. And not a single constructive value adding act was completed- in fact it wasted over 70,000 Megawatts hours of power consumption on computers dedicated to decrypting the next encrypted mining algorithm to release a Bit nugget- I wonder if the staples theory would be applied to this- I guess one could set up server farms in the arctic and dedicate them to mining bitcoins.

Marx would have had a field day with the labour theory of value on this one!

See the Bitcoin stats here- this was all invented by a math student who just thought about an algorithm that would slowly release money- and the higher the demand the longer the more complex the algorithm would be to unlock or print the next dollar. But I wish for the life of me I could actually get it! Cause I do not- but the money launderers and the tax haters love it! And hey if you were in that space- I am sure you would love Bitcoin as well- as you probably are not much into society – an anarchists free riding monetary fantasy come true.

http://blockchain.info/stats

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