It’s not every day they award a Nobel prize in economics on a topic directly relevant to the political discourse of Alberta, so it is our duty to note Monday’s announcement that Canadian-born economist David Card was accorded the honour for his pioneering work using “natural experiments” to show that raising the minimum wage won’t cause jobs to disappear.
Paul Krugman, the New York Times’ economics columnist and a former winner of the prestigious bauble himself, noted that Dr. Card got the prize for his methodology for how to study things like minimum wages, not necessarily what the effect of minimum wages might be, which has been a topic of lively discussion for a long time.
Dr. Card and his research partner Alan Krueger, who has since passed away, had the bright idea back in the 1990s of comparing what happened in neighbouring U.S. states when one raised the minimum wage and the other didn’t, and then thinking of it as a natural experiment.
Dr. Card teaches at the University of California, Berkeley. Dr. Krueger served as chair of President Barack Obama’s White House Council of Economic Advisors from 2011 to 2013. He was briefly President Obama’s assistant secretary of the treasury.
I’ll leave the fancy technical commentary to the professional economists. Nevertheless, what the two economists found, as Dr. Krugman pointed out in his column, “was that the increased minimum wage had very little if any negative effect on the number of jobs.”
So, Dr. Krugman went on, “these results make the case not just for higher minimum wages, but for more aggressive attempts to reduce inequality in general.”
Now, this isn’t exactly a shocker.
For well over a century a parade of iconic figures on the right have predicted civilization’s end as a result of higher wages – and every one of them has been proved to be wrong.
The preponderance of evidence, economics columnist John Cassidy wrote in a useful piece in the New Yorker in 2012, shows minimum wages in North America are low by historical standards, that there are no obvious links between rising minimum wages and unemployment, and that the potential costs of raising minimum wages are small.
Part of that evidence would have been Drs Card and Krueger’s 1993 study, which showed what happened at fast food joints in New Jersey, which raised its minimum wage, and eastern Pennsylvania, which didn’t. What happened was nothing – at least, nothing different – as far as the number of employees went.
But even back in 1865, two years before Canada became an official country, Karl Marx himself took time out from his busy schedule fomenting international communist revolution to write a pamphlet debunking the claims of those who insisted better wages for the working class would spell the doom of civilization as we knew it.
But you never would have known this was a topic of debate from local media coverage of the screechy claims made by business owners and their favoured political parties in Alberta after 2015, when the NDP came to power promising to raise the minimum wage to $15 (Canadian) an hour.
The piercing howls of outrage and horror from all the usual suspects on the right, including Restaurants Canada, sundry fast-food businesses that swore they would have to close up shop or at least have to stop serving Big Macs at 3 a.m., and, of course, the various Conservative parties of the day, are still ringing in our ears.
If they managed not to close their businesses, fast-food franchise owners threatened, they’d be forced to lay off workers and whip the ones they kept even harder to keep them pouring the midnight grease.
The president of the Chamber of Commerce in the town where your blogger resides said she was in “a state of disbelief” at the NDP policy – not surprising, I suppose, since she may never before have experienced a moment in her adult life when an Alberta government didn’t shout “how high?” when the business crowd yelled “jump!”
Restaurants Canada – the lobby group that got its start under a different name complaining about prime minister William Lyon Mackenzie King’s plan to keep a lid on menu prices as part of the fight against Hitler – begged the NDP not to raise the minimum wage until the economy improved, whereupon, of course, it would have come up with a new reason for delay.
A spokesthingy for the Canadian Federation of Independent Business darkly prophesied that if the minimum wage hit $15, many businesses would close their doors.
Of course, none of these dire predictions came true.
By 2019, after the NDP had implemented the $15 minimum wage, Alberta’s restaurant owners were in such dire straits that they were able to invest their hard-earned dollars in a high-profile PR campaign to make sure we all understood just how rough they had it – and to help Jason Kenney’s United Conservative Party defeat Premier Rachel Notley to put an end to rising minimum wages.
In the event, as Albertans now know, this province hasn’t actually been a booming economic nirvana since the UCP was elected that year.
If the NDP returns to power in 2023, as nowadays seems like something that could happen, those who want to argue for higher minimum wages will have another arrow in their quiver for the debate that will surely follow, thanks to the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, as the Nobel prize for economics is awkwardly known to those few who care about such details.
Never mind what Jason Kenney said, vaccine passports are here in Alberta, now
They still won’t call it a vaccine passport, but Alberta now has a vaxxport just the same. It even has a QR Code!
Officially now called an “enhanced vaccine record,” the vaccine passport announced yesterday by Premier Jason Kenney comes complete with an “AB Covid Records Verifier app,” so your COVID-19 vaccination records can actually verified.
“Albertans and businesses asked for a safe and secure app to make it easier to check proof of vaccination and today we have delivered,” Mr. Kenney said in the government’s news release yesterday. “Enhanced vaccine records with a QR code and easy-to-use validator app are important tools in support of our commitment to protect the health-care system, slow the spread and increase vaccination rates.” (Emphasis added.)
Alert readers will recall that Mr. Kenney didn’t always say this kind of thing. Indeed, just days ago he said the opposite.
In an old news clip circulating on social media last night, Albertans could hear their premier telling a reporter who asked if his government would support a vaccine passport: “Opposed! We have been very clear from the beginning that we will not facilitate or accept vaccine passports.
“I believe that they would in principle contravene the Health Information Act and also possibly the Freedom of Information and Protection of Privacy Act,” he glibly rambled on.
Nodding in the direction of an anti-vaxx protest nearby, the premier continued: “So these folks who are concerned about mandatory vaccines have nothing to be worried about, and there will be no vaccine passports in Alberta.”
While the introduction of the vaccine passport is no bad thing, it is nevertheless clear that Mr. Kenney will say whatever pops into his head without much regard for what he might say or do the next day.
Surely the Fraser Institute and their collegial deep thinkers at the University of Calgary Economics and Oilsands Department, along with Restaurant Brands International, the thinkers at Hamburger U sitting next to the neoliberal University of Chicago, Walmart HQ in Texarse, Amazon thinker sans excellence with ghoulish presence Bezos, plus Boris Johnson of Brexit and intellectual Greek Classics fame, can easily put together a short paper showing that Alfred Nobel was but a damn commie, and that his Economics prize award panel has recently been taken over by a cabal of Swedish socialists infiltrated by Putin stooges seeking to undermine society? Their definitive Rebuttal should be out by next week, latest. And as all small e entrepreneurs struggling to turn a Timmies into a gold mine with execrable sandwiches know full well, paying more than $10 an hour minimum wage is but charity, pure and simple — you don’t need no egghead to figure that out, and who believes a left-wing California prof anyway?
As for the great unvaccinated, I see that the rump of the far left that is anti-vax has decided that it is the WEF who wants a totalitarian Great Reset, based on digital biometrics for every citizen on Earth so everyone’s movement can be tracked, and that they and the Davos plutocrats are cheering for Covid passports, because they are wetting their pants at the thought that there is the breakthrough they needed to keep tabs on us all, while we cheer for it. Thus, don’t get vaxxed and don’t give in and you won’t be on a database! Plus the vaccine is experimental and people are dying like flies from the vaccination, not Covid which isn’t serious anyway, don’t you know. Yup, philosophy at its finest. These deep thinkers, none of whom have ever been as much as a hospital orderly or a paid coffee pourer, are as out of it as the right wing. What is most puzzling, however, is the phalanx of “healthcare” workers who have refused to get vaccinated — the only excuse they have is freedom of choice, including the freedom to be summarily dis-employed for being terminally stupid. Why choose to work in healthcare if you don’t believe in medicine? The disconnect is beyond my ken, much as it was a decade ago when I discovered the majority of staff at my mother’s long term care facility refused the annual flu shot, and that management gave not one damn, citing freedom of choice. Responsibility? None I could discern, and this was and is a non-profit.
I’ve been unable to find any Canadian stories beyond Rebel News claptrap about why some of our nurses won’t get the jab. Presumably it’s for reasons like this from an article about a nitwit nurse from New Hampshire’s reasoning for not getting the Covid vaccine, just SUCH a pleasure to read. Boiling it down to basics, she’s against putting a “man-made” vaccine into her bod, but accepts other vaccines for measles, etc. A loon. She needs some Astra Zeneca pronto, it’s not mRNA robo-poison, after all.
https://www.nhbr.com/why-are-do-some-nurses-speak-out-against-covid-19-vaccine-mandate/
Lastly, I wonder if Mr kenney has awarded himself a secret third jab, just to be on the safe side. There’s a man as keen on preserving his own hide as ever there was.
These pretend conservatives and Reformers don’t understand proper economics, funding the necessary services we take for granted, support deregulation and private for profit enterprise, unfair tax policies, and do the priciest shenanigans. It has been noted that Rachel Notley had similar attributes to Peter Lougheed, who had no appetite for these pretend conservatives and Reformers. We would be better off with Rachel Notley. In the next provincial election, smart Albertans will return to this.
” … Kenney will say whatever pops into his head without much regard for what he might say or do the next day.”
Well, that’s the whole game right there! Nothing more complicated than that.
Might as well follow the leadership and direction of a wind-soc. Complete randomness! How about some old bones or tea-leaves?
I’ve always wondered if there is a connection between those who despise higher wages for the poor and the priests mentioned in spotlight, the Jeffrey Epsteins, and Jerry Sanduskys of the world who have all more or less admitted that their favourite thing in this world is children who live below the poverty line. Since there has been no complaints about the expansion of the dow chemical plant in Edmonton, I’ve taken it as a sign that antivaxxers either want more c8 in their blood or they’re just ignorant and scared.
We in Ontario are committed to regular minimum wage hikes. The Ford Government may have killed the proposed $15 per hour raise after they came to power in 2018 but they still want workers to be paid more. According to ontario.ca, from October 1, 2020 to September 30, 2021 the minimum wage was $14.25. Showing its compassion for the little people, the Tories on October 1, 2021 upped the rates by 10 cents to $14.35.
Suppose you work a forty hour week, what can you get for an extra $4? According to costfindercanada.ca, a McDonald’s Big Mac (no meat) can be had for $4.19. However should you not be so hungry and want to cover both food and the sales tax, you can wolf down a Double Cheeseburger for only $2.39, small fries extra.
If course the scanner app is for businesses to scan your QR code. Unless I am missing something, the “Government of the Province of Alberta” app is not for individuals who want to show their QR code to those businesses. No, that would be too easy. So for now, I’ll use my paper printout of my QR code, folded up in my wallet. Some people, having the foresight to know they would need it for a long time, have already laminated theirs. Like the previous vaccination record, this is not wallet-sized, either. Luddites are clearly in charge. They probably code with paper and pencils.
FYI: Manitoba’s vaccine passport comes in the mail. It is like a plastic credit card and is obviously designed to last a long time.
As I have mentioned in a comment to a previous blog post, the Nobel Prize in Economics is not a true Nobel prize. It was invented and funded by the Swedish Central Bank to provide credibility to some dubious and extreme economic right-wing theories promoted by Friedrich Hayek, Milton Friedman, and others, including the notorious James Buchanan (see https://www.theatlantic.com/magazine/archive/2017/07/the-architect-of-the-radical-right/528672/). More recently, I suppose, to redeem the reputation of the Nobel Prize in Economics itself, the selection of winners has been a bit more balanced. The latest choice is another step in the right direction.
Interestingly, Buchanan was not a fan of raising the minimum wage or the research of Drs Card and Kreuger:
“The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the presupposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.”
Yet, the evidence presented by Drs Card and Kreuger against these assertions is powerful. The research caused a lot of fallout, including the breaking of friendships and relationships previously enjoyed by Dr. Card. One economist characterized the fallout as such:
“In economics and theology, where orthodox theory is widely taken to be self-evident truth, it tends to be the contrary evidence which is discarded.” (https://www.abc.net.au/news/2021-10-13/nobel-prize-in-economics-2021-david-card-minimum-wage/100531994).
If you look at countries such as Australia and NZ where the minimum wage is relatively high and people in the service industry can really make a wage that is sufficient to live on, you do not see lots of unemployment. Quelle surprise.
Regarding the vaxxport. I printed mine off today. Is this amateur hour? Can we not get an app that would display the QR code? Instead, we get something we can only directly print off. If you want to save it as a file, you have to send it to a pdf printer. There is no option that I can see for downloading the QA code to a file.
I wonder how many seniors are going to be able to cope with this if they want a digital copy to add to their smart phones. You really have to know what you are doing to be able to add a short cut to the QR code to the home page of your smart phone. At the very least, the web site could provide some step-by-step instructions for Apple and Android devices to save the QR code to those devices and add it to the home page. But, as I said earlier, an app would be better.
If you want to use a paper copy, you are warned not to create a fold through the QR code or to reduce it in size. Guess if you want to use the paper copy, you better get it laminated and hope that the reflective surface does not create too much difficulty for the QR code readers.
The whole AB government vaxxport still feels like a last ditch and rushed effort.
That’s because the whole AB government vaxxport IS a last ditch and rushed effort. It’s designed not to work very well, and it’s intended to be discarded with relief. DJC
It is hard to disagree with this view. I am sure that the IT managers (we do have competent people in the civil service) provided a range of options to the minister and the cabinet for consideration for the vaxxport with the typical caveat: good, fast, or cheap; pick two. It is likely the latter two options nicely and conveniently aligned with the other agenda.
A point occurs to me that might explain why raising the minimum wage doesn’t affect employment—at least in fast-food restaurants. How many business owners who rely on low-wage labour will voluntarily hire MORE staff than they need? If the average burger joint has more than two “extra” employees to cover absence due to vacation and illness, I’ll be surprised. Cutting staff when there’s barely enough hands to do the work is a great way to go broke slowly. Of course, the CFIB et al will never admit this.
First of all, I doubt Kenney, the pseudo populist, cares much about the Nobel Prize for Economics. Unlike his former boss Harper, he doesn’t even have an economics degree.
Second of all, if I were running Restaurants Canada, I might be asking for my money back from whatever PAC I contributed to in support of Kenney in the past. Probably by now they have figured out not to rely on Kenney’s word and have at least stopped contributing. Yes, Kenney campaigned on how the NDP’s increase to minimum wages was damaging, but he doesn’t seem to have completely gotten rid of it yet. Perhaps he was too busy with other things, like destroying health care, the Eastern slopes and unveiling greatest summer ever signs.
While I doubt studies will sway him, I am hopeful at this point Kenney will not be around that much longer to do much more damage. I suspect Restaurants Canada has found, or is in the process of finding, some other Conservative to provide money to that is not as politically toxic, but also does not pay attention to reputable economic research.
It should be noted that it took Stephen Harper about sixteen years to get his MA Econ. It should also be noted that he obtained it while he was director of the National Citizens’ Coalition. As well, the supervisor for his degree was one of the U of C academic staffers who was on the NCA’s payroll as a consultant.
I doubt that Harper’s economics degree is worth anymore than Kenney’s lack of any degree.
yes, Kenney’s government did not roll back the minimum wage – only for younger people IIRC.
We can be thankful that this is one of the many things that was planned for the “summer of repeal” that did not get done completely, or not at all. For instance Kenney and co kept the progressive tax brackets the NDP brought in (and which Prentice was proposing to bring in anyway in a slightly different form), and stopped indexing the brackets to inflation (effectively a tax increase for some people) – this is a far cry from the campaign promise to go back to a flat tax, and indicates (possibly) that in spite of their pretence that we only have a spending problem (and their directions to the McKinnon panel) there is an acknowledgement that the revenue side is important as well. Or maybe I am being too generous.
Plus we hear today that the AUPE has reached an agreement and sent it for ratification to its members, and that this includes some modest pay hikes instead of the 4 % rollback that the government was trying to bully them into taking. Is hell freezing over, or have the UPC decided they might have to play nice now that an election is less than 2 years away ?
Welcome to Alberta!
The only jurisdiction in the civilized world where the government actually rolled back minimum wage. Then, to add insult to injury, enacted legislation to make it easier for employers to skirt overtime premiums.
In this province democracy is a privilege that only the billionaire class enjoy.
I expect that when Albertans have suffered enough, they will act. I guess we’re not there yet.
Of course every CON will swear up and down that wages can’t go up, but can only go down, because we are in competition with placed like the Belgian Congo and Madagascar for their cheap labour. As much as I am sure that the labour costs in those locales are considerably lower, that doesn’t mean that every single factory and shop is suddenly going to set up shop there. I recall having this discussion in my youth with the CONs I once associated with. They would swear up and down that investment goes where the greatest return is possible, and that return is achieved quicker if labour costs are as close to zero as possible. I would, sheepishly, point out that these places where labour is cheap are, more often than not, economic, political, and social disaster areas. Of course, the gathered CONs would response with a rousing “So what?” as if investors love to throw their money into unstable train wrecks. They had this uncanny ability to ignore the fact that places like Sweden, Norway, Denmark, France, and a host of other places with secure social-welfare structures and predictable political cultures are the most desirable places, regardless of the labour costs. In anything, the race should be to the place with the fastest rising wages and most improved social welfare conditions.
CONs routinely are quick buck artists. They are much more interested in a fast flip and a quick turnover for a marginal gain, then actually building something that represents improvement in the human condition. Restaurateurs, the over whelming majority of them, fit into the category of quick buck artists, riding the backs of their low-cost, easily manipulated and abused workers, while they skim cash wildly so they can pay for their latest expensive toy. The last thing they ever want to pay for is improved working conditions and better pay for their staff. Currently, it’s claimed businesses are crying for employees to fill the labour demand. Yet, few of these business have even bothered to consider that perhaps they are the problem for their shortages? The the race to improve their bottom-lines is only a race to the worst of everything.
It’s interesting to note that, since COVID has gripped Alberta, it has been revealed that the place is no more than a third-world despotic hell hole. Or as Donald Trump would call it a “shite hole country”.
Sorry Joe,
To the contrary, Trumpians would call Alberta the promised land. This is exactly the kind of place they dream about.
While I’m thankful for another scholarly proof that raising minimum wages isn’t a bad thing —in fact, it’s good for the whole economy right-winger fundamentalists are always genuflecting to—I always go the simpler route: there’s more than a whiff of hypocrisy when business says it can’t pay the lowest-paid workers of all else its whole sector goes tits-up: if all those businesses are so close to the edge, doesn’t subsidizing them on the backs of the lowest-paid (actually, underpaid) workers offend the bottom-line rule of capitalism that competition must be allowed to weed out the weak enterprises so that the stronger prosper? Well, of course it’s hypocritical, but with studies like this one—and many other examples—it’s getting harder not to point to blatant greed, too, again on the backs of the least-paid workers of all.
Having been proprietor of a few small businesses myself, I can sympathize with the small proprietor. But we, most of us individually, gladly pay our taxes because we like our universal public health care (not least for the healthy workers it supplies us with), the public roads that bring us supplies and customers, the police who protect our businesses from crime, and the fire departments which protect us from fire. But if the Fire Marshall found any of us violated standards that voided our insurance, or if we neglected to even buy insurance because we’d go bust if we did, nobody else of our tribe would like the extra premiums they’d have to pay to cover such perfidy, or that shady operators undercut law-abiding ones by not meeting standards everyone else has to, et cetera, et cetera, et cetera. Why is it business associations expect individual businesses to effectively pimp their workers? I just don’t have any sympathy for that. What’s next? —protection rackets? Driving down wages (some jurisdictions don’t even have a minimum wage) is effectively extortion. We all suffer when that happens.
Like meeting minimum safety standards, if the cost of paying workers a minimally livable wage (and $15/hr isn’t even that in many cities) really does force a business to close, then, according to the capitalist rule of competition which businesses otherwise cite as holy whenever it’s to their advantage, that business should be allowed to fail—especially because it can’t accommodate certain standards. I suspect some of these associations do not speak for all businesses—just like I know lots of proprietors who vote NDP. During Covid, lots of businesses have accepted government help, but when they start up again, they can’t find enough workers and complain they’d rather collect the dole—yeah, rather than return to a job that was underpaid to start with. Minimum wages need to go up even more—that seems plain.
Finally, I have an old gripe: Canadian workers have been generally underpaid for at least three decades by now—starting when neo-right governments started kicking the stilts out from under unionized public sector workers and this social disease spread to private employers—you know: workers actually became relieved they got zero, zero, zero and zero contracts only to have working standards and, most heinous of all, pensions trickle down the drain. I worked in the woods for over 30 years, the last 15 of which saw my wages reduced by almost half (taking inflation and other costs-of-living into account). That’s a long time to be shorted; imagine that money invested and compounded for as long—would housing be so unaffordable now for so many—and so many living in tent cities? Would so many have to keep working past 65 years old just to live in poverty? Is it any wonder youth gets angry enough to subscribe to extremism, to scapegoat, to give up?
It’s a long way back to the fork in the road we missed.
Okay, my gasket needs to stop sputtering. I’ll take the silver lining of this report—and the fact that the neo-right is now so discredited it’s odds of forming pay-to-play, crony-insider governments are shrinking every day.
That? Oh, don’t worry —that’s just the tea kettle. I’ll sip in my dotage and reminisce of the days when I worked in Port Alberni—back, way back when it had the highest per capita income in Canada for several years running…back before the crashes of ‘81 and ‘97 and 2008 and 2020…and…and…and
Thnx for this reporting.
Nobel prizes are a funny thing. Currently they appear to be awarded much like a popularity contest, or as they are currently know as the Obama piece award.
Funny how globalists and socialists want to increase minimum wages and low and behold a nobel prize is awarded for a strategy that might show under limited conditions, minimum wages might not drop employment in all cases.
However, a much bigger test has been made. Lower wages in Mexico and China have siphoned off all the higher paying manufacturing jobs, but that is just ignored to push an agenda that can get majoritarian politicians elected in populous states.
It will be funny when stagflation really hits, and those pushing bad economic policy will only have themselves to blame.
BTW, the brainiacs at Reason have judged your economic study spurious:
https://reason.com/2021/10/14/natural-experiments-make-the-case-for-liberty/?utm_medium=email&nowprocket=1
BRET LARSON: Minimum wage increases aren’t the cause of economic problems, including inflation. Ironic how Alberta used to have the lowest minimum wage in the entire country, yet had the highest rate of inflation in Canada. Trade agreements with the federal governments of different countries are just a way to support corporate greed, and exploit workers, so that CEO’s can reap bigger profits for themselves.