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Structural Regression, the Energy Boom, and Deindustrialization

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I want to encourage folks to look through the CAW’s detailed submission to the federal government’s panel on competition policy (headed by Red Wilson).  Here is the link: http://www.caw.ca/whoweare/CAWpoliciesandstatements/pdfs/CompetitionInvestmentPanel.pdf I think it’s a major statement about the structural transformation occurring in Canada’s economy as a result of the global commodity boom.  Basic summary: high global commodity prices have boosted the […]

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Manufacturers Call for “Buy Canadian” Policies

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Neo liberal orthodoxy is crumbling in the wake of the ever-deepening manufacturing crisis. Witness yesterday’s call from the Canadian Manufacturers and Exporters Association for domestic procurement policies linked to major public investments in infrastructure and transit projects – long advocated by labour and derided by mainstream types as a return to dreaded “industrial policies.” As the CME point out, there […]

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The Commodity Price-Exchange Rate Transmission Mechanism

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Well, it happened. The petro-fueled loonie broke parity with the greenback yesterday, and is headed higher still. I can’t believe that so many people still interpret this as a symbol of our national renaissance.  In fact, the reverse is true.  The dollar’s flight both reflects, and simultaneously reinforces (in fine Kaldorian fashion) our regression into serving once again as a […]

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Exchange Rate Appreciation and Manufacturing Investment

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An interesting article just published by my friend Robert Blecker (American University) reinforces our concerns regarding the long-run impact of the loonie’s recent appreciation on the size and competitiveness of Canada’s manufacturing industry. Here’s the formal citation & abstract: The Economic Consequences of Dollar Appreciation for US Manufacturing Investment: A Time-Series Analysis Author: Robert A. Blecker a Affiliation: a American […]

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Alberta Distortions

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I am big on big investment spending.  I’ve argued for years that weak business investment undermines our job creation, our productivity, our incomes, and our competitiveness.  I’ve proposed lots of policy measures to stimulate more investment spending: public as well as private. But what’s happening in northern Alberta is enough to nauseate even a Soviet-esque advocate of mass capital accumulation […]

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Spill-overs from Loss of Good Jobs

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=978399 A new NBER Working Paper from Beadry, Green and Sand of UBC looks interesting.. Spill-Overs from Good Jobs PAUL BEAUDRY University of British Columbia – Department of Economics; National Bureau of Economic Research (NBER) DAVID A. GREEN University of British Columbia – Department of Economics BENJAMIN SAND University of British Columbia – Department of Economics April 2007 NBER Working […]

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An Update on Canada’s Two Economies

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What follows is a revised and extended version of the comments I made at a panel on the Canadian economy organized by the Bank of Canada and the IMF at the recent Canadian Economics Association meetings. An Update on Canada’s Two Economies – Implications for Workers and for Monetary Policy Andrew Jackson Chief Economist Canadian Labour Congress The Hidden Jobs […]

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TILMA: A Report from the Front Line

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On Tuesday, I testified before the Saskatchewan Legislative Assembly’s Standing Committee on the Economy, which is holding public hearings on joining TILMA. The Legislative Assembly is broadcasting the hearings and promptly posting the recordings. To see my presentation, click “Video 1” for June 5 and use the bar immediately below the screen to advance the time to 48.5 minutes. A […]

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The Keystone Pipeline

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The National Energy Board is holding hearings into the proposal to ship Alberta tar sands bitumen to the US for further refining – something of a reductio ad absurdum in terms of resource-led development. Fred Wilson from CEP is writing  a daily blog from the hearings where his union, the Parkland Institute and other Alberta progressives are intervenors. If you […]

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How can the feds support innovation?

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Asks David Crane in today’s Toronto Star. Between the lines I read that the feds need to stop listening to whining corporate elites, whose cries inevitably come back to tax cuts, deregulation, more “free trade” (investor rights) deals and reduced public services as the means to “competitiveness”. Crane suggests a federal approach based on a little thing we used to […]

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There’s blood on the factory floors: where’s Ottawa?

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For once the headline-writers at the Globe gave my latest column (on continuing job losses in manufacturing) a better headline than the one I suggested (which in this case was a bland one: “Why manufacturing matters” zzzzzzzzzzz). Mind you, even their “blood on the floor” headline was not as eye-grabbing as Philip Cross’s year-old quote about carcass-hackers in Brandon Manitoba. […]

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The Dubious Quality of New Jobs

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I spent the better part of this morning sifting through the latest release of Statcan’s Employment, Earnings and Hours release to get a bit of a fix on what’s happening to all of those displaced manufacturing workers. We in the labour movement tend to see a big shift from reasonably good manufacturing jobs to bad private service jobs – which […]

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Hewers of Minerals, Drawers of Oil and Gas

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Yesterday’s International Merchandise Trade Annual Review from StatsCan confirms the Mel Watkins thesis that Canada is rapidly reverting to its historical role as a commodity producer for the global economy. http://www.statcan.ca/Daily/English/070508/d070508a.htm From 2002, the Canadian dollar began to appreciate rapidly against the US dollar (and Asian currencies tied to the US dollar) in response to a commodity price boom, itself […]

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The China Syndrome

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The following, from today’s Toronto Star, includes some commentary from yours truly: The China syndrome: A new condition characterized by the apparent reluctance of a certain national government to embrace an emerging, global economic power May 05, 2007

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New report links economic success, investment in training

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http://www.ccl-cca.ca/NR/rdonlyres/F6226BEA-0502-4A2D-A2E0-6A7C450C5212/0/connecting_dots_EN.pdf Based on the Executive Summary, this report seems worth a read. It seems to go beyond the common rhetoric on the need for more ‘human capital development in a knowledge-based economy’ to take a serious look at economic returns to firms from training – though the scale of the suggested benefits seems rather high. I’ve always leaned to the […]

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Reynolds on Manufacturing

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Neil Reynolds has discovered that a fraction can be increased by reducing its denominator. Because labour productivity equals output divided by employment, he claims that “In manufacturing, you measure success by the number of jobs you eliminate.” By definition, a given volume of manufacturing output produced by fewer workers implies higher manufacturing productivity. However, it does not follow that lost […]

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Spill-overs from Good Jobs.

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  This paper from Beaudry and Green seems highly relevant to the currently hot issue of community economic impacts from manufacturing job losses.  Manufacturing jobs generally pay above average wages, and recent research suggests displaced industrial workers experience average wage losses in the range of 25%. http://papers.nber.org/papers/W13006   NBER Working Paper No. 13006 Issued in April 2007 NBER Program(s):   LS  Does […]

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Policy Conference Presentations

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The presentations from the Ottawa Economics Association’s 2007 Policy Conference are now available online. They include a fascinating exposition on China’s manufacturing sector, a business perspective on Canadian manufacturing, Buzz Hargrove on the Canadian economy, and the Fraser Institute’s take on global warming.

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The Vehicle Efficiency Incentive

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I’ve posted below an interesting commentary from Dennis DesRosier in favour of gas tax increases as an alternative to the proposed incentive increases. His chart shows a near perfect correlation between monthly gas prices and % monthly auto sales going to entry level ( fuel efficient) vehicles. It strikes me that – to reduce the emissions intensity of motor vehicles […]

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Corporate Tax Cuts

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The Globe Report and Business has a story today (can’t find it online) to the effect that the federal Budget will improve depreciation rates for new capital equipment investment, but not lower the general corporate income tax rate beyond already planned levels. As noted by Erin in an earlier post, this reflects Finance thinking as reflected in the recent report […]

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Back-of-Envelope Math on R&D

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To flesh out the cost-effectiveness issue outlined below, consider the following figures. McKenzie estimates that a 10% decrease in the cost of R&D due to a tax credit increases R&D by 2% in the short term and 7% in the long term, but that a 10% decrease in the effective tax rate on production increases R&D by 3% in the […]

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Research and Development

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This afternoon, I attended Kenneth McKenzie’s presentation at Industry Canada on “Taxes, R&D and Enterprise Formation.” To a large extent, it was based on his C. D. Howe Institute Commentary. His main message is that governments seeking to promote R&D can “push” by reducing its cost through incentives (i.e. subsidies) or “pull” by increasing its benefit through lower taxes on […]

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Policy Implications of the Jim/Stephen Debate

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In terms of pure economics, Jim’s most interesting comparison may have been of investment to GDP, which has sparked a discussion about how to properly measure investment. For public policy, I think that Jim’s most interesting comparison was of investment to business finance/profits. If one accepts Stephen’s interpretation, then falling capital prices have allowed firms to make adequate or appropriate […]

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More On Investment: “Real” and Real

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My note on the weak investment spending of Canadian businesses earlier this week sparked several comments, including one from me on the methodological problems encountered in trying to measure “real” investment effort.  Here’s some more grist for the mill of how we understand “nominal” versus “real” business investment.  Point 1 is empirical, and Point 2 is more theoretical. 1. Capital […]

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Canada’s Underperforming Corporations

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In neoclassical economic theory, corporations are supposed to “work”, just like the rest of us do.  Their economic function is to organize production, innovate, and grow.  This process, when it happens well, generates jobs and incomes (which is not to say there are not better ways to generate jobs and incomes).  One way to measure the “work” of corporations is […]

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Wage Reductions for Laid-Off Workers

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http://www.statcan.ca/Daily/English/070116/d070116a.htm One thing we don’t know about the current round of manufacturing job losses is what is happening to laid-off workers – though employment rates are slipping for older male workers in Ontario and Quebec, and even a supposedly “tight” job market is generating little if any real wage growth for most workers. This suggests that many affected by layoffs […]

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Chavez to nationalize electricity and telecom

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I recently read somewhere a commentary that Venezuela’s Hugo Chavez was not really that radical, that his populist rhetoric was largely limited to expanding social programs for the poor, and that behind the scenes he was still playing nice with US businesses. Unfortunately, I seem to have lost the link to that article. Perhaps Chavez’s latest announcement will alter that […]

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