Politics for Joe 24
For: Lake Superior News
By: Hubert O'Hearn
For those who missed my previous column, I'm doing the heavy lifting that the national media has shirked. They care about chicken suits and poor seating at Harper rallies...I'm looking at the policy proposals at of the Big Three parties. My goal is to re-engage the electorate with the election before the only people bothering to turn out to the polls are the candidates, their friends and family, and some guy named Pete who had to use the washroom.
Last time we looked at the Parties' plans for your Family. Today: Jobs.
The Job Situation at Present:
Canada's unemployment rate is a lumpy and mediocre 7.7%. Economists have knife fights over what constitutes 'full employment' - there will always be a certain percentage of employable adults who step back for various family reasons, are between engagements, or have just told the Boss to take the paycheque, fold it five ways and put it where the moon don't shine. Basically, any number under 6% is Good. An unemployment rate over 8% is bad. So Canada currently is in transition, but it remains to be seen (the favourite phrase of the bet-hedging journalist) which way the needle will move next.
But, there is a deeper problem and it is one you have heard at the coffee shop, at the bar, or at your dining room table. We are leaking industrial wage jobs, those that pay +$18 per hour, and replacing them with jobs that require name tags, paper hats or both. 9.4% of Canadians are defined as living in low-income situations i.e. earning less than $20,000 per year. And if you've never tried living on $1500 per month ... don't.
So what are the Parties proposing to preserve what we've got, and expand the number of jobs that will provide economic security?
The Parties Speak!
Sunday afternoon, the NDP finally released their platform, replacing the 158 words re-printed in the previous column. That required some late revisions to this column. I'm starting to think Jack Layton has it in for me.
Nonetheless, the NDP platform has 10 direct references to Jobs. As you will see, that is the least of the Three Big Parties, but our interest is in the quality rather than the quantity. So, what are their proposals?
A specific recommendation is reducing the small business tax rate from 11% to 9% as an offset to the corporate tax rise that the New Democrats also propose (albeit they do promise to keep Canada's corporate tax rate below that of the U.S.). That, plus a year-long exemption from EI and CPP premiums paid for new hires, along with a $1,000 non-refundable tax credit for new hires who last a full year at their job add up to a maximum $4,500 incentive. On a $25,000 entry level job, that works out to an 18% Federal subsidy in one form or another.
The NDP project that the above proposal would add 200,00 jobs to the economy. Instinct tells me that the number sounds high, and there is no guarantee that these would be other than name tag & paper hat jobs (is the NDP subsidizing Wal-Mart and MacDonald's?), but it would go a long way towards off-setting the 113,000 jobs lost between October 2008 and October 2010.
For Northern Ontario, the NDP would double the funding for FedNor. Foreign Investment would be examined at a $100 million or higher threshold and such investment would have to meet a 'net benefit for Canada' test.
That really is about it in terms of direct job creation, although the NDP commitment to retro-fitting homes to be more energy efficient will (they say brightly) 'create local jobs'!
To be brutally honest with you, the program feels rushed and slapped together. But judged purely on its merits...
O'Hearn's Grade: C
As to the Liberals, their Red Book platform when searched has 41 references to Jobs. They frame the debate with statistics. In 2006, when Paul Martin's last Liberal government was defeated, unemployment was at 6.4%. Five years later, despite a 43% increase in Federal Government spending, Canada is at the aforementioned 7.7%. Meanwhile, Canadian's personal debt has risen from 123% of annual income in 2006 to 150% today. In other words, Canadians are borrowing and borrowing heavily to make ends meet, hoping for something better to come along.
So how do the Liberals define 'something better'? In a nutshell, there is a hard emphasis on training and hiring of youth. Why? Because of all we baby boomers who will be appearing soon at a nursing home near you, today's whippersnappers are going to have to earn big bucks in order to pay for our bedpans. That may be crude, but accurate.
The Liberals propose a revitalization of the Investment Canada Act in order to preserve our innovative companies (Nortel, we hardly knew ye) and encourage foreign investment where it will provide solid, secure jobs. If you hear the Trudeau years calling, I think you're right. And I think that policy is right.
Regarding Youth hiring, the Liberals propose an EI holiday for small businesses hiring new employees. At a current 1.73% of the paid wage, that is a reasonable incentive for business. Not a great incentive, but better than a kick in the head with a steel boot.
Finally, the Liberals express a desire to increase productivity. There is a caveat that needs to be injected here. Increases in productivity do not equal increases in jobs. For that reason, Pierre Trudeau never paid much more than lip service to direct investment in productivity. That said, I do heartily agree with the targets of the Ignatieff Liberal investments: municipal rail and high-speed rail. I have always thought it slightly insane that we live in a country whose major cities essentially line up in a row coast-to-coast and yet we do not have high speed rail service. Imagine if a shopper in Thunder Bay could hop a train to Winnipeg in the morning and be home in time for dinner? Better yet, imagine the opposite.
I have some concerns about this Jobs agenda, but overall...
O'Hearn's Grade: B
The Conservative platform has 92 references to Jobs. The quick summary is that the Tories are adopting the classic Laffer Curve/monetarist/Reaganomics approach to jobs. Keep taxes low and business will invest the savings in jobs. Now to me, laissez-faire government is lazy-unfair government, but as I've been clear from the start, I bring my own opinions and prejudices with me. And I'm always right. So there.
What is remarkable is how even within the platform, the Harper Conservatives take every opportunity to scare-monger and name-call. The ogre of "high-tax" Liberals is waved about more than any real agenda. And I am honestly trying to be fair to the government here.
In terms of the concrete, the Tories offer almost the same EI benefit as the Liberals, except that the former offer it as a tax credit. Personally, I prefer the simpler approach of 'don't pay EI' rather than 'collect it back at the year end provided you made money and you haven't already maxed out whatever credits can be applied against income and...'
Accountants must love the Tories.
As I said, this is a monetarist policy. Harper's team is bound and determined to have the lowest corporate tax rates in the G7. (Say, what happened to the G8? Did someone retire?) But do lower corporate tax rates actually result in re-investment and jobs?
Since 2001, when Paul Martin as Finance Minister began cutting tax rates, business investment has actually fallen in Canada. (link here) Now, we have also had a minor national recession and a near-worldwide financial collapse in that 10 year period, so that may have had a mitigating influence.
There is one other telling contrast between the Conservatives and Liberals. While the Grits are doin' it for the Kids, the Tories are goin' for the Grey. Harper's team proposes incentives for hiring older workers, to keep them in the workforce longer.
Hmmm...and Hmmm again.
While I count as an Older Worker and as such am part of the target group, damn I really don't want to be hauling my ever-wearying butt out the door when I'm 68. Plus, there is that baby boom problem which the Liberals are addressing while the Tories are not.
Tough call on a Grade. If you're a fan of the late Milton Friedman, you'll love it. Me, I'm a John Kenneth Galbraith man through and through.
O'Hearn's Grade: C+
Next time: Health.
Go Rory McIlroy!
Be seeing you.
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