The Paradox Of Minimum Wage In Contemporary Society

By André Faust (11/11/2018)

In our system of economics, the minimum wage is functional in controlling for inflation and for that reason, the minimum wage will always create a class working poor and create a loss of buying power in the higher wage earners.

What happens when the minimum is raised inflation goes up? As inflation goes up the bank of Canada increases the lending rate to control the rate of inflation. The consequence is that all the industries in the system raise their prices to offset the increase of wages and interest rates.

In essence, what we have is an endless loop which each time it cycles there is a loss of buying power.

How much one makes really isn’t a good measure of prosperity. A better measure is the buying power of wages earned. As buying power diminishes workers have to work more hours to pay for goods and services.

There was a time that a worker working for the minimum wage of 75 cents or less per hour had greater power buying power than today’s worker, who in New Brunswick makes 11.25 per hour. The loss of buying power effects every wage earner, the 20.00$ per hour wage earner wage doesn’t increase yet everything else increases so his/her wages gets closer to the minimum rate.

The result of the loss of buying power is that the supply and demand are also affected. Wage earners are buying less so the demand drops, and with a drop in demand, supply decreases as well. When supply decreases the frequency of layoff also increases resulting in less money to spend. This process will continue until the entire system fails.

Our economics is a system consisting of nodes, and whatever happens in one node affects all the other nodes of the system. An example nodes are the banking institution, industry, the wage earners, investors, the stock markets, human displacement technology and so on.

Our present system of economics is not sustainable and as a result, it will eventually collapse. To avoid the eventual collapse, we have to have the social and political will to change the system. In other words, we need to have the sociological imagination to resolve the wage issue as it relates to the consumer price index. The likelihood of such a change ever happening is possible, but highly improbable. The most likely reason why changes are highly unlikely is that they are too many stakeholders working for their own interest.

In summary, not including the price of fuel minimum wage contributes to inflation and a loss of buying power for the higher wage earners. While there are other factors which contribute to rising inflation such as willfully creating a shortage to boost prices the increase in the cost of production precipitated by increased wages is the dominant factor for the increase in inflation. Our system of economics is made of nodes, and each node can affect the whole system because whatever happens in one node cascades throughout the entire system. Lastly, each business is self-centered it only looks after its own interest and doesn’t acknowledge that it is part of a system.

The cycle of inflation is always greater than the cycle of deflation and if this process is allowed to continue the likelihood of catastrophic economic failure is possible.

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The full story behind the New Brunswick economy

The following is a speech that Premier Brian Gallant presented at the Economic Club of Canada in Toronto.

Did you know that New Brunswick has the largest, most sophisticated oil refinery in the country in Saint John?

Did you know that two of the largest exits in Canada in the tech sector in the last five years were right here in New Brunswick with Radian 6 and Q1 Labs?

Did you know that Fredericton, Moncton, and Saint John topped KPMG’s rankings of the most cost-competitive cities to do business in Canada?

You may wonder why you’ve never heard these facts before. You may be puzzled after reading those reports and columns that only talk about the challenges New Brunswick is facing. But those articles don’t tell the full story.

We are at times too humble as New Brunswickers. So on behalf of the people of New Brunswick, I’m going to tell you the other side of the story and explain why we are #NBproud.

We are #NBproud of the innovation that is happening in New Brunswick. We have a world class cybersecurity cluster in Fredericton with researchers, academics and businesses like IBM all contributing.

Large scale tech and innovation firms such as Salesforce, BMM Testlabs, Accreon, CGI, and Siemens all have operations in New Brunswick.

Out of more than 3,000 entries, Eigen Innovations, based in New Brunswick, was the only Canadian company to make it as a finalist in Cisco’s Grand Innovation Challenge. Eigen Innovations is a leading innovator in the emerging Internet of Things sector and is poised to modernize the manufacturing process.

New Brunswick businesses such as Sylvar Technologies, BioMatcan, MyCoDev Group and LuminUltra are making global strides in biotechnology.

New Brunswick has the best Internet access in the country by a significant margin over other provinces, with average download speeds of around 27 Mbps according to a new report from the Canadian Internet Registration Authority . Due to our connectivity and bilingual and skilled workforce, we are national leaders in business services.

To support our entrepreneurs and start-ups, we have the Pond-Deshpande Centre which was set up by innovator Gerry Pond and Desh Deshpande, who was co-chair of Barack Obama’s National Advisory Council on Innovation and Entrepreneurship.

Innovation is part of New Brunswick’s history. For example, NBTel, a pioneer in the telecommunications industry, was the first company to use a fully digital switching network, the first telephone company to provide internet service, the first company to offer all customers voicemail service and the first telephone company in Canada to be given permission from the CRTC to provide television services.

The snowblower was invented in Dalhousie and St. Stephen brought Canada its first chocolate bar. You’re welcome.

We are proud of our universities and what they contribute to our economy. The University of New Brunswick was named the Post-Secondary Institution of the Year at the Startup Canada Awards and was ranked as the most entrepreneurial university in the country as it does a fantastic job of commercializing its research.

St. Thomas University is small but mighty as demonstrated by their innovative partnership with Harvard School of Business.

L’Université de Moncton is the largest French-language university in North America outside of Quebec.

Maclean’s has ranked Mount Allison University the #1 undergraduate university 18 times in the past 25 years. There have been 53 Rhodes Scholars from Mount Allison and 12 of them from the past 14 years; once again this is one of the best records in the country.

We also have significant success in our traditional industries. New Brunswick is the most forestry-based province providing both wood and value-added wood products across the globe. We are the third largest producer of maple syrup in the world, we are home to the lobster capital of the world and we are poised to be the largest wild blueberry producer in the world. McCain’s from Florenceville-Bristol has been serving up New Brunswick potatoes across the globe for over 35 years. Beausoleil Oysters can be found in restaurants from California to London. The salmon you are eating for lunch right now is from the New Brunswick business True North Salmon. It was harvested Tuesday off Grand Manan island in the Bay of Fundy. It was processed in St. George on Wednesday and on a truck Wednesday night to be delivered right here yesterday. Now that’s service. Now that’s fresh.

Saint John – with its infrastructure and deepwater ice free port – is an energy powerhouse that is an important piece of the puzzle to advance Canada’s energy industry through projects like the Energy East pipeline. A project which will create thousands of jobs and transport Canadian oil safely from Alberta to Saint John, New Brunswick.

NEW BRUNSWICK IS A GREAT PLACE TO LIVE, WORK AND PLAY.

Moncton is ranked fourth in the country as the best place to find a job. And from November 2014 to November 2015, New Brunswick saw the second highest wage growth in Canada.

In your free time you can go whale watching in the Bay of Fundy which has the highest tides in the world, fish salmon on the Miramichi or Restigouche rivers, swim in the warmest ocean waters north of Virginia in Shediac, surf on the Petitcodiac River, and hike, ski or snowmobile on our endless trails.

Our industries, business, cities, institutions and landscapes are innovative and world class, but our people are our biggest asset.

New Brunswick is home of the world renowned artist Antonine Maillet. New Brunswicker Willie O’Ree was the first black hockey player in the NHL. Jake Allen from Fredericton currently backstops for the St Louis Blues, Jockey Ron Turcotte from Grand Falls rode Secretariat to a Triple Crown, a year after he won two of the three Triple Crown races aboard Riva Ridge. Hero and ambassador Kevin Vickers calls Miramichi home. Donald Savoie, the country’s leading public administration academic is from Bouctouche. Singer Roch voisine is from a small community in New Brunswick called Saint-Basile. He’s my mom’s favourite.

New Brunswickers are renowned for their friendliness, warmth and hospitality. My family knows this firsthand. In 1952, my grandparents packed up their things in the Netherlands and immigrated to Canada looking for a better life. They arrived in Minto, New Brunswick with virtually no money, without the ability to speak English or French, and with 17 kids.

Thankfully, Oma and Opa chose a country that would not judge them based on where they were from, which language they spoke, or how much money they had. Canadians embraced them while New Brunswickers supported them in their time of need.

So it is no surprise that New Brunswickers have committed to bring in the most Syrian refugees per capita in the country. We have a rich cultural heritage from our Anglophone, Francophone and First Nation communities, along with the contributions of generations of immigrants from all over the world.

For all these reasons, I am #NBproud.

Premier Brian Gallant.

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Employment Insurance That Strengthens Our Economy And Works For Canadians

Justin Trudeau leader of the Liberal Party

Employment Insurance is an anchor of economic security for Canadian workers. Its benefits are there for people if they lose their jobs through no fault of their own or are temporarily out of the workforce to raise a child, provide care for a loved one, or to get necessary skills training. In challenging economic times, a reliable Employment Insurance system is vital to ensuring that Canadians get back on their feet and that our economy can recover from downturns.

Employment Insurance is a crucial social and economic policy – it must do a better job at both helping Canadians when they need it, and supporting a well-trained, highly skilled work- force.

Unfortunately, over the past decade, Stephen Harper has cut Employment Insurance benefits, and far fewer Canadians qualify for the benefits that they need. In 2012, Harper introduced changes which force unemployed workers to move away from their communities and take lower-paying jobs. At the same time, Harper has been reducing service levels at Service Canada for Employment Insurance claims, leading to serious delays in processing times. This has forced some Canadians to turn to food banks as they wait for the benefits into which they have paid. Harper has also frozen Employment Insurance premiums at artificially high levels – not to enhance benefits, but to pad his budget and provide benefits to the wealthiest few.

Liberals understand that we need an Employment Insurance system that reflects our changing labour market. This means a system that is flexible, that does a better job of getting benefits to Canadians when they need them, and that helps Canadians develop the skills required for their next job. We will reduce Employment Insurance premiums in 2017 from $1.88 to $1.65, reducing payroll costs for employers and employees, while also ensuring that we can invest in strengthening Employment Insurance. With our new plan, we will build an Employment Insurance system that supports Canadians, and will help boost Canada’s economic growth now and in the long-term.

A Liberal government will accomplish this by doing the following:

• We will reduce the waiting period for Employment Insurance benefits to one week from two. In addition, Employment Insurance processing will be a starting point for our new commitment to higher service standards in government, including reduced waiting times. We will deliver Employment Insurance benefits quickly and reliably.
• We will end the higher 910-hour eligibility penalty for new workers and those re-entering the workforce, stopping the discrimination that makes it harder for some of Canada’s most precarious workers – including parents returning to the workforce, younger workers, people who have left the workforce due to illness, and new Canadians – from accessing the benefits that help them get back into the workforce.
• We will increase investment in skills training, through a $500 million annual increase in funding to the Labour Market Development Agreements with provinces. We will work with provinces and territories to ensure that these new funds support their training priorities, support initiatives that demonstrate real pathways to good quality jobs, and develop the skills that employers need to grow our economy.
• We will make Employment Insurance parental leave more flexible for family and work circumstances. This includes providing parents with the option to receive their benefits in smaller blocks of time over the first 18 months of their child’s life, or take a longer leave (up to 18 months) at a lower benefit level.
• We will introduce a more flexible and accessible Employment Insurance Compassionate Care Benefit so that six months of benefits are available to those who are providing care to a seriously ill family member, rather than only those caring for a loved one at risk of death.
• We will repeal the 2012 Harper changes to Employment Insurance.
• We will work with the provinces and territories to assess how successfully the Employment Insurance system is delivering its core mandate to provide income security to workers in a changing labour market. This will result in changes to the program that ensure more Canadian workers, particularly those in more insecure work, can get access to the benefits they need. We will make the appropriate legislative and policy changes to ensure that Employment Insurance contributions are only used to fund Employment Insurance benefits and programs, and are not used by the government to fund other programs.
• Our enhancements to Employment Insurance will apply to the 2017 calendar year.

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US stock market wavers as Europe’s economy slows

US stock market wavers as Europe’s economy slows.

Iraq SE source: internet

NEW YORK — Renewed worries about Europe overshadowed an encouraging U.S. jobs report on Thursday, leaving major stock indexes roughly where they started.

Germany’s economy shrank more than expected late last year, and the slowdown in Europe’s largest economy deepened the region’s ongoing recession. That’s a troubling sign for the U.S., because sales to Europe have been a boon for American companies.

The Dow Jones industrial average fell 9.52 points to close at 13,973.39.

After a strong start, the stock market has drifted sideways over the previous week with few major events to sway investors. That calm could disappear soon, said Doug Cote, chief market strategist at ING U.S. Investment Management.

With recessions in Europe and Japan, and weak growth in the U.S., he’s bracing for some turbulence. “Everybody is too complacent,” Cote said.

Cisco Systems fell 1 percent. The world’s largest maker of computer networking equipment reported earnings late Wednesday that surpassed Wall Street’s expectations, but the company predicted sales growth that was weaker than previous estimates. Cisco’s stock lost 15 cents to $20.99.

The Standard & Poor’s 500 index edged up 1.05 to 1,521.38. The Nasdaq composite index rose 1.78 to 3,198.66.

The S&P 500 index has climbed 1.6 percent this month and has already gained 6.7 percent for the year.

The number of people applying for unemployment benefits fell to 341,000 last week, the lowest level in three weeks, according to the Labor Department. Besides a few weeks last month affected by seasonal trends, that’s the lowest level in nearly five years.

Among the many deals announced Thursday, American Airlines and U.S. Airways agreed to merge, creating the country’s largest airline. Warren Buffett and 3G Capital, a private-equity firm, also plan to buy the ketchup maker H.J. Heinz for $23 billion. US Airways sank 67 cents to $13.99, while H.J. Heinz soared $12.02 to $72.41.

Constellation Brands soared 37 percent, the biggest gain in the S&P 500, after reaching a deal with Anheuser-Busch InBev. InBev agreed to sell a brewery in Mexico and rights for Corona and Modelo beer in the U.S. to Constellation for $2.9 billion. Constellation Brands gained $11.87 to $43.75.

In the market for U.S. government bonds, the yield on the 10-year Treasury slipped to 1.99 percent, down from 2.02 percent the day before.

The 10-year Treasury yield, used to set a variety of borrowing rates, began the year around 1.70 percent and has climbed steadily higher since then. As worries about a recession ease, traders have shifted money out of the Treasury market, driving yields up.

Among other companies making news:

Whole Foods Market slumped 10 percent. The grocery store chain trimmed its forecasts for sales and earnings this year, a result of its plans to open more stores and put more lower-priced goods on its shelves. Whole Foods lost $9.40 to $87.50.

General Motors fell 3 percent after the biggest U.S. carmaker said it made money in North America and Asia and nearly doubled last year’s fourth-quarter profit. But its earnings fell short of analysts’ estimates. GM’s stock dropped 92 cents to $27.75.

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