Two Canadian macro articles diverted me from my best laid plans today. Side by side, the two make for some interesting observations on the state of the Canadian economy, as well as some fodder for thinking about what drives investment. The first, a Statscan piece by Phillip Cross, is a demand-led investment story, with most attention on the resource sector, […]
Read morehttp://www.cepr.net/index.php?option=com_content&task=view&id=1122&Itemid=77 This is a very nice piece from Dean Baker of the CEPR on the delinking of real worker pay from labour productivity growth in the US. I’ve argued for years, with much of the left, that average worker pay has lagged productivity growth mainly because of the increased bargaining power of capital vis a vis labour due to “globalization”, […]
Read moreNeil 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 […]
Read moreThe following note, including tables, is available on the Canadian Labour Congress website: Free trade was promoted to Canadians on the famous promise of “jobs, jobs, and more jobs†and is widely defended on the basis that Canada’s large trade surplus with the US contributes to Canadian employment. Meanwhile, American commentators are concerned that the US trade deficit displaces American […]
Read moreKen Georgetti and leaders of major manufacturing unions just finished meeting with the Prime Minister about Canada’s ongoing manufacturing crisis. The Canadian Labour Congress briefing note quoted by The Globe and Mail online follows: The Manufacturing Crisis Overview Canada’s manufacturing sector is in crisis. High energy prices, a high dollar, and worsening trade deficits with Asia have caused many Canadian […]
Read morehttp://www.statcan.ca/Daily/English/070223/d070223a.htm Philip Cross of Statscan has writen an interesting analysis of our very weak labour productivity performance in 2006. Output per hour growth has been very slow – a result of weak output growth combined with fairly strong job growth. The key factor highlighted here is declining productivity in the mining sector as production shifts to less accessible resources, and […]
Read moreIn 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 […]
Read moreI have posted below a response by a senior Government of Caanda official to my earlier post on why the Canadian econmy is operating below capacity – the core subtance of which is to suggest that wages are too low to stimulate needed productvity gains. A somewhat usuual, out of mainstream response… > This was a nice note Andrew. I […]
Read moreA couple of weeks ago, I suggested that someone ought to publish a comparative ranking of OECD countries by productivity per HOUR of work (rather than the more common, but utterly misleading, measure of GDP per capita). Turns out the Economic Policy Institute in Washington has done exactly that in their latest version of their flagship publication, “State of Working […]
Read moreI wrote a recent column for the Globe and Mail on the issue of working hours. It was a repsonse to a report from the Institute for Competitiveness and Prosperity that bemoaned that Ontarians worked significantly less hours than Americans (about 130 hours less per year, on average). In the Institute’s view, this makes Ontarians $3700 less “prosperous” per year […]
Read moreTD Economics has posted this manifesto, penned by Chief Economist Don Drummond, in the belief that it represents a broad consensus among economists on how to raise the rate of productivity growth in Canada. http://www.td.com/economics/special/dd0906_prod.pdf The manifesto – unsurprisingly – closely reflects the mainstream (Bay Street, Department of Finance, OECD) focus on “sound” macro policy, free trade, de-regulation and tax […]
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