Canada Kicks Ass
The Cost of Poverty

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BartSimpson @ Mon May 09, 2011 4:06 pm

cougar cougar:
I have no idea what portion of Canadian tax revenue comes from operations overseas. If a big corporation makes the money in lets say the Philipines and the taxes are paid in Canada, then obviously using this tax money for social programs in Canada will be like getting the rest of the World work for your citizens.


Multinational corporations do not pay taxes to Canada (or the USA) on the income earned by their international subsidiaries unless those profits are moved into the country. This tax policy helps out developing countries by channeling wealth to them, but there is no advantage to Canada or the USA in sending our jobs to India or etc. in terms of tax revenues.

cougar cougar:
Bart, I no longer know what I do for a living. I was successful in everything I pursued at university and never failed in my former jobs. Now I am out of work and scared shitless about my and my family's future. Period.


Then it is time for you to start your own business as you quite literally have nothing to lose by doing so. :wink:

   



Benn @ Mon May 09, 2011 5:19 pm

One of the better threads on here right now. Great points from everyone really. I'm still leaning to the invisible hand side of the argument where the market sets the wage and if it's too low you just won't find the workers, such as Bart's San fransico example. In Manitoba where they have jacked up minimum wage a fair bit over the last few years the only change I've heard about is rising prices that adjust to the extra wealth to buy them up. Unfortunately those of use making much more than Minimum wage don't always get corresponding increases in what we make, so when prices go up we can afford less, and those living on minimum wage seem to be able to buy no more than before. Who wins? Those who control the supply of products and the government in tax revenue. I've heard nothing of a better economy every time minimum wage goes up.

I'll toss this into the mix however. What about a system like Germany uses where minimum wage is set by sector, not flat across the board. This recognizes the effort and skill levels of certain jobs are different and to give a extreme example, a journeyman welder should not make the same as a Tim's coffee pouring jockey while still assuring exploitation does not take place against either.

   



Brenda @ Mon May 09, 2011 5:25 pm

That's unionisation! That's a dirty word!! :twisted:

(I agree tho, I like that system. The Netherlands uses it too. Collective Labour Agreements.)

   



fifeboy @ Mon May 09, 2011 5:37 pm

Brenda Brenda:
$1:
In BC 30% of people make $12 or less, that means that 70% of the people are doing better. Why aren't their wages driving prices up, only those people at the bottom?

Because it is bs. Companies won't go broke when minimum wage is raised. That 30% will have more to spend. It will all go back into the economy, the CANADIAN economy, as opposed to the top 30%, who (pulling numbers out of my ass) transfer their money to the Falklands, and don't pay taxes, and go on expensive holidays to Hawaii and the Bahama's.
R=UP

   



Bruce_the_vii @ Tue May 10, 2011 3:51 am

Benn Benn:
I'm still leaning to the invisible hand side of the argument where the market sets the wage and if it's too low you just won't find the workers, such as Bart's San fransico example.


In the main cities of Canada there's substantial immigration so there is no invisible hand of the market, only central planning by the government of the labor level. Economists consider immigration a backward of economics, and drop out the effect of immigration on supply and demand in the destination cities. Immigration is not a backward, it's actually the national economic plan. The question is how would the economy perform without immigration. In fact wages would inflate and people would move up to the jobs that could handle the freight. The worst jobs would disappear. However that's a bit radical.

   



Benn @ Tue May 10, 2011 8:40 am

I see that point, under our present immigration system, not under one done right where we bring in only those with skills we need and that can be transferred to Canada. However that's a bit radical as well unfortunately. Changing family class immigration to only spouses and kids under 18 won't fly with the electorate I figure.

   



andyt @ Tue May 10, 2011 9:19 am

Sector by sector bargaining won't work in Canada unless we unionize all the workers. And in Germany, the companies and unions actually co-operate - I guarantee you that the pay scales are much higher than our minimum wage. The people proposing this here are likely the same ones arguing against unions.

The point of the posting is that poverty costs all of us money. Either way. Business people are starting to talk about it and point out that for instance housing the homeless in supported housing costs way less than letting them wander the street to get involved with our health and justice systems. That people earning shit wages have low productivity and cost the government way more in output than they pay in taxes. That poverty is a huge stressor that shows up in the healthcare system, no matter how much health care we provide. That having better health outcomes comes about by decreasing poverty rather than putting more money in the health system. If we pay those at the bottom more, shave a little off the top to do it, we actually all come out ahead financially.

   



Benn @ Tue May 10, 2011 9:41 am

andyt andyt:
Sector by sector bargaining won't work in Canada unless we unionize all the workers. And in Germany, the companies and unions actually co-operate - I guarantee you that the pay scales are much higher than our minimum wage. The people proposing this here are likely the same ones arguing against unions.



This is true on all accounts actually. They do cooperate (as they should here) and pay scales are higher. Many working as restaurant service staff actually make a living (although meager) at it as a career because it pays "enough." If I recall teens are not allowed by law to work so these jobs have to go to all adults as well. Which did make for much better service IMO.

   



andyt @ Tue May 10, 2011 9:54 am

Benn Benn:

This is true on all accounts actually. They do cooperate (as they should here) and pay scales are higher. Many working as restaurant service staff actually make a living (although meager) at it as a career because it pays "enough." If I recall teens are not allowed by law to work so these jobs have to go to all adults as well. Which did make for much better service IMO.


But these people aren't worth that wage, they're getting overpaid. And we know that paying low scale workers too much will cause the country to go down the road of ruin as has Zimbabwe. And we know that economists have proven that paying low skill workers higher wages will cause massive job losses and inflation that eats up all of the worker's wages. One poster here said paying a decent min wage will recreate the conditions of the Wiemar Republic - something you'd think Germans would try to avoid. Germany must be one hellhole to live in, have massive unemployment, super high inflation. They must be the "sick man of Europe" with all the other EU countries having to put in money to bail out those crazy Germans, paying a living wage to people who don't deserve it.

I don't see the difference in effect of sector by sector bargaining and setting a decent minimum wage if the former way actually sets higher wages than the latter.

What does happen in Germany is even the lowest paid workers earn enough to live a decent life, and there are fewer high rollers at the top. Sounds good to me.

   



Benn @ Tue May 10, 2011 10:09 am

andyt andyt:
Benn Benn:

This is true on all accounts actually. They do cooperate (as they should here) and pay scales are higher. Many working as restaurant service staff actually make a living (although meager) at it as a career because it pays "enough." If I recall teens are not allowed by law to work so these jobs have to go to all adults as well. Which did make for much better service IMO.


But these people aren't worth that wage, they're getting overpaid. And we know that paying low scale workers too much will cause the country to go down the road of ruin as has Zimbabwe. And we know that economists have proven that paying low skill workers higher wages will cause massive job losses and inflation that eats up all of the worker's wages. One poster here said paying a decent min wage will recreate the conditions of the Wiemar Republic - something you'd think Germans would try to avoid. Germany must be one hellhole to live in, have massive unemployment, super high inflation. They must be the "sick man of Europe" with all the other EU countries having to put in money to bail out those crazy Germans, paying a living wage to people who don't deserve it.

I don't see the difference in effect of sector by sector bargaining and setting a decent minimum wage if the former way actually sets higher wages than the latter.

What does happen in Germany is even the lowest paid workers earn enough to live a decent life, and there are fewer high rollers at the top. Sounds good to me.


What you get is one of the top 5 economies in the world now and top 10 over the next 50 years. Aweful ;)

   



andyt @ Tue May 10, 2011 10:18 am

Benn Benn:
In Manitoba where they have jacked up minimum wage a fair bit over the last few years the only change I've heard about is rising prices that adjust to the extra wealth to buy them up.


Your argue against this in your later posts. BC just raised the min wage from $8 to $10.25. Do you really think the workers this affects won't have more money, that our cost of living has also shot up 28%? That's just bullshit. And yes, people who earn more will wind up paying a little bit more for services affected by that wage increase. Your Tims coffee might cost you a nickel more. But that's the point, people here seem to be arguing that they're living quite well, but don't want to pay a nickel more for coffee so that the person serving it to them can also have at least a minimally decent life. The way to stop min wages from getting eaten up by inflation is to index them to inflation - problem solved.

If min wages all get eaten up by inflation, that would be true in Germany as well, as each sector bargain for a wage increase - ooops, no further ahead because inflation takes it all. So no point to getting a wage increase, really. People should be arguing for a wage decrease.

   



Khar @ Tue May 10, 2011 11:15 am

Bruce_the_vii Bruce_the_vii:
Benn Benn:
I'm still leaning to the invisible hand side of the argument where the market sets the wage and if it's too low you just won't find the workers, such as Bart's San fransico example.


In the main cities of Canada there's substantial immigration so there is no invisible hand of the market, only central planning by the government of the labor level. Economists consider immigration a backward of economics, and drop out the effect of immigration on supply and demand in the destination cities. Immigration is not a backward, it's actually the national economic plan. The question is how would the economy perform without immigration. In fact wages would inflate and people would move up to the jobs that could handle the freight. The worst jobs would disappear. However that's a bit radical.


Which economists actually state that it is a backwards thing for economics?

I have provided you with more than a few links effectively demonstrating the benefits, especially in the long-term, for immigration. For example, in one of (well, the only) example you use, Toronto, a million more people were working in that city at the end of a downturn. Not living, but working. These immigrants were also responsible for buying goods, bringing in capital from other countries and supporting the Canadian economy. Not only do they come here for the wages, they also come here and spend money. Toronto was in a bubble before then, and would not, should not move back to that level of output, immigration or no. It was not normal, irrelevant of what you believe.

Ithe end, the impact is likely not as significantly negative as you may believe and the simple fact is that immigration is happening, has been happening for decades and has yet to destroy Canada (in fact, since most of us are children of immigrants, I am sure we can see the benefits in ourselves). More likely, economists can easily percieve the positive benefits of immigration. Nothing remains static, Bruce -- assuming wages drop means that the economy doesn't expand, those immigrants don't spend money and so forth, fairly radical assumptions indeed.

More likely, Canada's wages would be the same, but there were be fewer people in Canada overall, making fewer products and reducing our economic and political sway on an international level. The worst jobs would not simply disappear, because those jobs would still need to be done. As has been shown, the people coming to Canada are typically closer to the top end of the education scale, and do more to reduce inequality than if we did not have them. Indeed, the ideal that immigrants are all uneducated people who take jobs at the bottom end of the pay scale should be dropped.

@andyt, you have already been shown that the wages of workers do not impact price, but profits. Bringing it up as if it is a salient point after having this mentioned six or seven times speaks more about your position than your post does. Pricing, in simplistic terms, is defined by the demand of that good and the availability of that good. Not the wages of the workers making those goods.

Once again, remember that it is the low-end CPI, and not the entire market, which comes up in price. Second, remember that few people were actually earning that 8 dollars an hour, since the "market price" for some level of labour was likely above that for most positions. Assuming that those at minimum wage were earning exactly minimum wage is, once again, a radical assumption. Third, remember that deleterious impacts of unemployment could also appear. Finally, it does not happen immediately, but will happen with time, and eventually they will be back in the same position they were previously.

With minimum wage, you are forcing the pay rate above what those workers are actually worth for those positions, so the market self-corrects. With raises at the minimum wage, demand for money actually changes, and this is what causes inflation (they need to spend more). In Germany, a change in the union pay rate (designed to keep real wages consistent, I stress, which you should note is a difference right there) does not necessarily change the demand for money, but can also easily change investment and savings. Union members likely won't be at the very bottom of the scale, so they are less likely to toss any new earnings directly back into the market -- likewise, as mentioned, with unions it is more about keeping real wages consistent. Also remember, one is negotiated between workers and employers... the other is not.

Are there negative impacts from unions? You know it. Exclusivity breeds unemployment, and there is always the latent possibility that in rough times, there could be a rather large sum of inflation as people's demand for money rises. If you try and play the market, it's going to play back, and there are going to be repercussions. Unionization is better than minimum wages, but there are negatives there. Unionizations can impede economic growth, for example, and artificially inflate the costs of some goods.

There is no such thing as free charity. To help someone, someone else has to pay. It is as simple as that. Minimum wage has more negatives, but unionization has it's own share too. Likewise, minimum wage is also across the board, whereas unions debate from industry to industry. As your own source showed, the restaurant industry reacts differently from other industries to changes in the minimum wage, and unionization like it is in places like Germany can actually reflect that. Therefore, economic damage and so forth industry by industry can be somewhat reduced, and wages can more accurately reflect the skills and atmosphere of various industries.

Likewise, unionization actually does protect workers to some degree, and has benefits beyond a simple "increase in pay" for the work force. There are more incentives to provide improved education. It can help maintain the employment figures so as to maintain a somewhat better efficiency within these industries, which is one thing I mentioned was a positive of frequently adjusted wages on the market. It actually can help in cases where workers are being gouged, and is not simply a static price floor in the same way minimum wage is. It's worth noting that, in Germany, an economic giant, unionization also does not extend all the way throughout the economy, and minimum wages only exist in a few small parts -- this could be accredited for assisting the German economy.

Unionization is definitely a step up from minimum wages. That does not mean unionization is perfect, and does not have negatives.

   



Benn @ Tue May 10, 2011 11:37 am

Benn Benn:
Your argue against this in your later posts. BC just raised the min wage from $8 to $10.25. Do you really think


Actually Andy I said I was leaning that way, after saying I saw good points from both sides, so was not making an argument, just mulling things over. If I was arguing against you I would not be helping you make your points :P

   



andyt @ Tue May 10, 2011 11:43 am

Benn Benn:
Benn Benn:
Your argue against this in your later posts. BC just raised the min wage from $8 to $10.25. Do you really think


Actually Andy I said I was leaning that way, after saying I saw good points from both sides, so was not making an argument, just mulling things over. If I was arguing against you I would not be helping you make your points :P


Ok, smarty. But how can you lean that way when your own arguments statements go against it?

   



Benn @ Tue May 10, 2011 11:48 am

The priorities of both the rich and the struggling can both be messed up. SOME of the top rich say "if you work for it you'll get it so why should I share" while SOME of the struggling (like my future brother in law) say minimum wage is too hard to live on and wishes he could afford to live at home, meanwhile he goes to work in a $40,000 car. Until we can make priorities straight on both sides and convince everyone what a happy standard of living is then no middle aged person with two degrees a wife and 3 kids and in their second career will want to make $5 an hour more than the guy pouring his coffee who is 18, some things don't mesh with Human Nature, no matter how noble the principle is.

   



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