Wednesday, May 5, 2010

Fraser Institute Sees Glass Half Empty

The Fraser Institute posted this tweet this morning:

If public sector incomes were equal to private sector, gov't deficits would fall by at least $19-billion #cdnpoli

But here's this pesky fact, oh Guardians of the Wealthy: If private sector incomes were to equal public sector incomes, then government deficits would fall. Why? Because government would then have substantially increased revenue from income and consumption taxes.

But don't let facts get in the way of preserving inequality.


Herbert Grubel said...

Chrystal Ocean displays a disturbing ignorance of economic realities. If the government mandated private sector compensation to be increased to that of the public sector, private firms would go bankrupt, unemployment would soar, investment in Canada would stop and government deficits would go through the roof.

Chrystal Ocean said...

Herbert Grubel displays a disturbing ignorance of human behaviour. Were every employer required to raise wages, none caused by this legislation would go bankrupt, unemployment would NOT soar, investment in Canada would remain unaffected and government deficits would go down.

Chrystal Ocean said...

The same argument as put forth by Herbert Grubel is used ad nauseum against increases in minimum wages. Yet businesses do not go out of business when minimum wages are raised, not unless they are already poorly managed and hence at risk. In which case, they use the minimum wage increase as an excuse without acknowledging the ultimate cause.

When legislation applies to all, no business, no competitor, is advantaged over another.

Herbert Grubel said...

I urge Chrystal Ocean to talk to some employers and ask them what they would do if they would have to pay their workers 40 percent more starting tomorrow. Their business would become so unprofitable, they would quickly look for a job with the government.

Chrystal Ocean said...

No legislation would require a 40 percent jump in wages "starting tomorrow." An adjustment period would be provided, during which wages went up gradually until parity was achieved.

Mark Francis said...

And exactly what jobs are being compared here anyway? Give me a private sector equivalent to a cop or a fireman or a CSIS employee or a passport examinder.

And so what if some businesses couldn't afford to pay the higher wages. That doesn't make the wage wrong.

For quick a few people, wages in real terms have declined during the past generation while incomes for the upper crust have accelerated. Perhaps there's an adjustment to be made there as well, eh?

ADHR said...


Hey, look: data. US data, but still interesting. One wonders what a similar Canadian analysis would look like.

A guaranteed minimum income is probably more feasible than relying on individual employers to provide a living wage. (Compare to relying on individual employers to provide health insurance or pensions.) But the latter is obviously preferable to our current system, where many don't have enough to live on, and many others have more than enough. Income could be redistributed to employers who genuinely can't pay higher wages, perhaps in the form of tax reductions, perhaps in the form of subsidies. (The awkwardness of redistributing to employers in order to pay employees -- rather than just redistributing to the employees directly -- is one reason in favour of a minimum income scheme.)

Of course, these are obvious points. So, either the Fraser Institute didn't think of them, and they're stupid; or the Fraser Institute is hoping like hell no one else did, and they're dishonest. If either is true, why listen to 'em?

Kim said...

The Fraser Institute, along with the CD Howe, are right wing corporate organizations, masquerading as non profit organizations (thus evading taxes) whose sole purpose in this country, is to provide bogus "studies", that the MSM can publish Front and Centre to excuse the government from any progressive social advances.

Try the Progressive Economics Forum or the Centre For Policy Alternatives for refuting studies. Unfortunately, they go almost unreported by CanWaste Media. Looks like you hit a nerve Chrystal ;) Go girl!