The world of work is changing and creating anxiety about jobs and incomes. There is some overlap on how the major parties contesting the Canadian federal election propose to deal with these challenges, but the Conservatives are definitely the outlier. The Greens score high on vision but low on feasibility, both the New Democrats and Liberals put a list of reasonable proposals on the table, with the Liberals offering a bigger vision that is also feasible. The Conservatives don’t seem to propose anything to address the world of work, imagining citizens as consumers, and implicitly offering a smaller role for government in the workplace.
The “changing nature of work” has to be—right up there with climate change—one of the hottest issues facing Canadians, a big cause of uncertainty and insecurity that underlies the middle class malaise that all of the parties contesting the Canadian federal election are hoping to address.
And quite rightly so. The future of work and globalization should raise a lot of anxiety. Richard Baldwin’s latest book, The Globotics Upheaval: Globalization, Robotics and the Future of Work, argues that as powerful innovations in digital technology meet globalization many higher paid workers in service jobs will be confronted with the disruptions that workers in manufacturing jobs had to deal with during the first wave of globalization during the 1990s.
If, as he argues, its “coming faster than most people believe,” then what should the politicians vying for our votes be doing about it? The first step for public policy is to foster higher and more secure incomes, and to offer better insurance.
How well do the platforms and promises stand up? I offer a review of the four major parties in the same spirit as the excellent review by Trevor Tombe and his co-author on climate change policies. Read “How The Four Federal Parties Climate Plans Stack Up” published in Chatelaine, and you will notice that my labour market and social policy scorecard is essentially the same.
The Canadian federal government should enhance the human and financial capital of children in less wealthy families, enhance market incomes of lower paid workers, and enhance the security of working incomes by adapting three existing programs to new realities: widening their scope, making them more flexible, and making them easier to obtain.
The changing world of work is also a changing world of pay, a world that will likely lean toward greater wage rate inequalities, lower or stagnating incomes for the bottom 40 percent, and greater income insecurity for the broad majority.
I suggest three changes to current public policies that take incremental, but important, steps toward fostering capital accumulation among children from less wealthy families, increasing market incomes earned from that capital for the working poor, and finally enhancing income security for the broad majority.
These policies lean toward encouraging inclusive growth, in which the benefits of the new world of work and pay are broadly shared.
In this post I discuss the first policy proposal, which is:
Enhance human and financial capital by making community colleges tuition-free, and making the Canada Learning Bond more flexible
There is a movement afoot, and there is an election in the offing. Always a great dance to watch, no matter what the issue.
The latest show is taking place in Ontario, where “$15 & Fairness” is the rallying call for raising the minimum wage, and has found a willing partner in the province’s Premier who will go to the polls in the spring, but in the meantime has legislated significant increases in the minimum price for an hour of work. The same dance plays out in the United States, and in many cities and states a minimum wage of $15 per hour is becoming a reality.
The big question in Ontario is exactly that raised by The New York Times during the 2015 primaries when Bernie Sanders was battling Hillary Clinton for the Democratic nomination: “As the campaign for a $15 minimum wage has gained strength this year, even supporters of large minimum-wage increases have wondered how high the wage floor can rise before it reduces employment and hurts the economy.”
Something to think about, but how would you think about it if you were an economist? Here are four rules of the road that might come in handy regardless of which dance you might be watching next time.
The Pope has strong views about inequality because he has a theory, and doesn’t need data.
One of Canada’s most prominent pundits has strong views about inequality because he has data, and doesn’t need theory.
I’ll probably never convince either of them to change their views, but maybe I can convince you with both theory and data.
Give me the chance by reading my just published paper, “Inequality is the root of social evil,’ or Maybe Not? Two Stories about Inequality and Public Policy.”
I tell two stories about inequality. The first is from the perspective of those who feel it is not a problem worth the worry, and the second from the perspective of those who see it as “the defining challenge of our time.” I tell these stories to clarify their underlying logic, but also to clarify both the challenges facing Canadians and our understanding of what public policy should do about them.
But I have another motive. I would like you to appreciate the value of economic theory and statistical methods to a public policy discussion of this sort. It seems to me that without an appreciation of some basic elements of theory and measurement, it is too easy for the policy conversation to go astray.
A common way to think about social mobility is in terms of “rags to riches” movement, a type of mobility that is central to the great defining metaphor of the United States, “The American Dream.” Indeed, policy makers often frame their discussion of social mobility in these terms, as for example in a May 2016 speech by the Chairman of the Council of Economic Advisers.
Upward movement is a natural way to think about social mobility, and Americans should have more of it. But this won’t happen without lowering the chances of intergenerational cycles of poverty, and promoting inclusive economic growth.
Social policy in Canada faces three challenges having to do with income inequality, income insecurity, and the imbalance between work and family life. My presentation at the Queen’s University conference, “Social Canada Revisited,” begins by outlining three facts that illustrate these challenges:
The share of total market income going to bottom-income Canadians has fallen
Workers with steady employment suffer significant and long-lasting income losses after a layoff
Families have changed to help cushion and support middle incomes, but the family-work balance is titled
I suggest that there are precedents in the existing Employment Insurance program that can be enhanced and built upon to more fully offer Canadians the social insurance they need and want, and put forward three enhancements that will move social policy in this direction.
Enhance Working While on Claim and integrate it seamlessly with the Working Income Tax Benefit to offer steady and increased income support to lower-income Canadians in a way that mimics some versions of a Basic Income
Introduce wage insurance that would top up weekly earnings for workers with a steady employment history who have suffered a permanent layoff
Expand so-called “Special Benefits” by creating individual accounts over which individuals have complete sovereignty