Alberta’s NDP, Unions, and the Minimum Wage

When analyzing public policy, one must typically ignore stated goals and understand the economic incentives that make groups favor certain forms of economic intervention.

Unions, as a group, tend to favor market restrictions that prop up their higher wage rates.

Alberta’s NDP, led by Rachel Notley, favors unions.

evilnotley

This an important factor in the NDP arguing for a 50% increase to Alberta’s minimum wage, despite protests from the business community and anyone with an understanding of basic economic law. NDP goal to hike minimum wage has nothing to do with helping less productive workers make more income, regardless of what their stated objectives are.

Minimum wage laws are a classic form of monopolistic grants of privilege that benefit some groups at the expense of others. Despite the proclaimed objective of minimum wage laws, which is to increase incomes of the most marginal workers, the actual effect is the exact opposite — it makes them unemployable because they are not sufficiently productive to be employed at the legal wage rates. This means that minimum wages will always cause more unemployment than otherwise — any economist who denies this is either a liar or a fool who doesn’t even understand the basic principles of price controls.

Who benefits from such laws? Certainly not the marginal workers, for it becomes illegal to hire them at the wage justified by their productivity. On the other hand, anyone employed above the minimum wage benefits because their competition is reduced. In particular, unions benefit from minimum wage laws. Unions despise cheaper labor competition. Minimum wage laws remove competition of less productive workers by forcing them to be unemployed.

And there is another reason why unions love minimum wage hikes — it is a devious way to increase their own wages. This can work in many ways depending on the labor agreement. Some agreements trigger mandatory wage hikes when statutory minimum wages increase (because wages are based on a percentage above minimum wage). Others have provisions to open wage negotiations if minimum wages go up.

I am not making this up. Economic theory informs us that we should expect nothing less. But consider also a 2004 study in the Journal of Human Resources by economists William Wascher, Mark Schweitzer and David Neumark. They clearly showed that lower-wage union workers usually see a boost in employment and earned income following a mandated wage hike. And those non-union wage workers who are now unemployed or unemployable? Who cares! The union members already have higher wages and protected jobs. So what if this cruel policy leaves in its wake desperate workers who can no longer legally work?

As for the NDP, there should be no doubt that Premier Rachel Notley is a union hack. Most of her career has been in the service of unions. Consider a few facts from her personal history:

She is married to Lou Arab, a communications and public relations staffer for the Canadian Union of Public Employees[2] and a campaign strategist for the party. She lives with him and their two children in the historic district of Old Strathcona located in south-central Edmonton.[17]

After law school, Notley articled for Edmonton labour lawyer Bob Blakely, and went on to work for the Alberta Union of Provincial Employees representing members with Workers’ Compensation cases.

She worked for a short time for the National Union of Public and General Employees (NUPGE),[20] worked at Athabasca University,[21] acted as volunteer co-ordinator for the Friends of Medicare “Romanow Now” campaign, and finally as a labour relations officer for the United Nurses of Alberta.[1]

Can there be any doubt that Notley will seek to benefit her union friends at the expense of other groups in society? Of course not.

Rachel Notley and the NDP are looking to empower unions. They don’t care if they hurt society’s least productive workers, like teenagers, people with disabilities, workers with language barriers, anyone without much experience for any reason, and ethnic or racial groups that may face discrimination.

Some will argue that forcing minimum wages higher makes employers invest in more equipment and develop new technology and this will increase productivity of labor. Therefore, this improves the economy. But this is a silly argument. Capitalists are always seeking ways to increase productivity, so to think they are just sitting around waiting for the government to force price floors on labor to do so is a joke.

But even assuming the employer doesn’t just reduce his quantity of labor demanded, his investment in new capital is limited by savings in the economy. Increasing minimum wage does not increase the total supply of capital available. If anything, capital will merely be shifted from some industries to others in an attempt to offset an artificially higher cost. Capital is not being reallocated because of a market requirement, and so this is not an economic improvement.

Don’t be fooled by anyone who says they want to increase the minimum wage to help the poorest workers. The main concern motivating the NDP to increase the minimum wage is helping unions.

Anyone advocating a higher minimum wage should be ridiculed and shamed out of public office on account of sheer ignorance.

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Politicians Are Bad for Your Health

In politics, a classic strategy for dealing with legitimate criticism is to ignore the real issue and just whine about “personal attacks.”

This is a common tactic relied upon by both the right and the left. We see this in the reaction to Conservative Party VP Jordan Lien’s criticism of Alberta Health Minister Sarah Hoffman’s ban of menthol cigarettes.

According to the internet, the following Facebook comment is very bad:

bigboned

The reaction to this was extremely unfavorable to Lien. People called it “dumb,” “sexist,” “insensitive,” “irrelevant,” “misogynistic” (!), and so forth. One PC party drama queen named Warren Mitchell even declared he was ripping up his membership card in disgust. “I’m done with this *$@%^ party.”

Well, it is a *$@%^ party. But seriously, let’s look at this issue in some detail.

Lien actually raises a completely legitimate point that is lost amidst the chorus of inauthentic outrageHere is the issue:

If it is justified to ban menthol cigarettes for the sake of “public health,” shouldn’t we ban other tasty but unhealthy things? Obesity, like smoking, also uses up resources in the health care system. A 2010 report estimated that direct costs of overweight and obesity represented $6 billion — which is 4.1 % of Canada’s total health care budget.

Serious money.

So, following the logic of Health Minister Hoffman and the Alberta government, perhaps things like candy, soda, fast food, and other wonderful treats that make life worth living should be banned as well.

If not, why not?

A wannabe social engineer like Hoffman cannot provide a reasonable answer. The problem with social engineers, whether they are on the left or right, is that there is no limiting principle to their philosophy. Once a person accepts intervention as an acceptable policy, then any limitation to the intervention is essentially arbitrary. So why not ban everything that is unhealthy, and force everyone to be healthy? Wouldn’t that be wonderful?

To be consistent, Sarah Hoffman should want to ban all the things that have made her obese on the same grounds as her ban on menthol cigarettes. Otherwise, we will have a less healthy society.

“Every Albertan should be able to enjoy a life free of preventable tobacco related disease,” Hoffman pontificated as she announced her government’s menthol cigarettes ban.

“Every Albertan should be able to enjoy a life free of preventable tobacco obesity related disease,” she could be saying on the exact same grounds.

“These changes will help make smoking less attractive to youth,” she declared.

“These changes will make smoking eating too much less attractive to youth,” she could have said.

If not, why not?

Most people realize that it is absurd to ban everything that is unhealthy, but they lack principles and are happy to ban things they don’t like — but don’t ban anything unhealthy they like, oh no.

Sarah Hoffman may not smoke menthol cigarettes, but her variety of unhealthy lifestyle is also subsidized by taxpayers and also unpleasant for other people.

The only justified solution to this problem is the government should neither ban menthol cigarettes nor unhealthy foods. This is the only consistent and sane conclusion.

Behavior controls are a type of socialism where the negative effects on society are often neglected. Yet it is irrefutable that such controls lead to economic impoverishment. However, even most economists fail to understand this.

Firstly, behavior controls directly concern the use one can make of his or her own body. If the government imposes restrictions on how one can use one’s body, then one will value one’s body less than otherwise. It is important to understand the incentive here: if the government restricts the ways in which one can use one’s own body, it reduces the degree of ownership one has over oneself. Real ownership means exclusive use and control. One way to think of it is like leasing one’s body from the government, and not owning it oneself. You can use the body for approved activities only.

The actual consequence of this is that people will be less likely to invest in themselves, and they will be more likely to “consume their human capital” — in other words, a person will tend to treat his body less well than if one had “full ownership” of it. It is this economic truth that underlies the idea that giving people freedom makes them more responsible (something many find counter-intuitive).

Secondly, and in a more general sense, as with all forms of political interference, this form of regulation hurts one group and benefits another. The group that can no longer perform certain (non-aggressive) activities is worse off than before, while the group that does not want to tolerate the objectionable behavior (like smoking or eating too much fast food) is better off. More specifically, the producers and users of the things whose consumption is now restricted are the ones who suffer. The ones who benefit are the non-producers and non-users of the goods in question. This encourages people to allocate their efforts towards non-productive activities and discourages productive activities. This makes society poorer.

And it is not a good argument to say we need to ban something because it costs the health care system more money. The very nature of socialized health care is to subsidize unhealthy lifestyles. It is impossible for socialized health care not to do this. So you must either accept that this is an inherent feature of your precious public health care or you must reject public health care. Either way, one must reject banning unhealthy choices for this reason.

At this point, someone might even accept this basic economic argument but protest, “Hey, that’s fine but he shouldn’t have said she was morbidly obese! That’s not nice!”

If a woman said the same thing but health minister was a fat man, the outrage would be virtually nonexistent. People would probably think it was funny. But that’s not the point.

Lien could have made his point with no reference to her physique, that is true. Rhetorically, it was very effective to do so. No one would actually deny that the health minister is obese. Obviously, Sarah Hoffman is a rather large woman. It even seems highly plausible that she is morbidly obese if we use the roughest definition, which is simply 25% above a woman’s “ideal weight.”

His comment simultaneously highlighted the arbitrariness of the law and the hypocrisy of a person with one unhealthy tax-subsidized lifestyle banning someone else’s tax-subsidized unhealthy lifestyle. A reasonable person who is not desperate to be as offended as humanly possible should understand this. So it is good to point out the inconsistent principle to illustrate the point.

It’s like people who like to drink alcohol for whatever reason and want snorting coke to be illegal, or vice versa. Such principles are arbitrary, cruel, and hypocritical. “So let me get this straight,” someone says, “this coke-snorting politician wants to ban alcohol? Give me a break.”

The nature of socialist health care is that it functions as mandatory medical insurance where everyone is pooled together, so people acting in healthy ways will always be pooled with people acting in unhealthy ways. If you want socialist health care, you need to shut up and deal with it.

Anyway, the whole incident reminds me of the classic South Park episode, “Butt Out,” where the comically compulsive over-eater Rob Reiner campaigns fanatically against smoking.

Jordan Lien should have stood up for himself, but instead he gave a pathetic apology like a whiny loser.

If people were serious about public health and justice, they would focus on the substance of the issue. Instead, they are complaining about evil conservative men trying to “keep women down” and “fat shaming.” A dumb politician guy said something mean… on the internet. The horror! And everyone is in a competition to be more and more offended than everyone else, which is how one gets street cred in the attention-seeking world of social media. Apparently, that’s all that matters.

A Billion Barrels of Bakken Oil: So What?

The headline says: “BAKKEN OIL FIELDS MARK BILLIONTH BARREL OF OIL.”

Wow, sounds impressive. But how impressive is it really?

oil consumption

The world consumes 87 million barrels of oil per day. A billion barrels of oil is merely 11.5 days worth of global oil consumption.

Well, okay, but that’s still pretty good, right? After all, 11.5 days of oil is 11.5 days of oil. But then we read:

Drillers first targeted the Bakken in Montana in 2000 and moved into North Dakota about five years later using advanced horizontal drilling and hydraulic fracturing techniques to recover oil trapped in a thin layer of dense rock nearly two miles beneath the surface.

Oh, darn.

In comparison, Alberta produces about 2.1 million barrels per day. That’s roughly a billion barrels every 16 months.

A billion barrels is just a drop in the bucket of world oil consumption, especially when you’re talking about production since 2005 and the oil is extremely challenging to actually get out of the earth.

— Read more at Yahoo News

Alberta Floods 2013: RCMP Invades High River Homes, Seizes Guns

The RCMP is acting like an occupying army in High River.

RCMP officers working in High River, Alta., on June 25, wear protective masks to prevent toxic dust from entering their lungs. The RCMP took some guns from homes they searched that they said were not stored safely and the Prime Minister's Office issued a statement Friday saying it wants them returned.

Governments invariably use emergencies to extend their powers and subject the citizenry to greater abuse. Natural disasters are no exception.

High River was devastated by the flood. The entire town was evacuated.

It has been eight days since residents were forced from their home. As the waters recede, people want to return home and see the status of their property.

“No way,” says the RCMP.

High River is effectively under a state of martial law so intense the citizens cannot even enter the town at all. The RCMP set up a roadblock with 30 officers to prevent residents from entering. Dozens of police cars with flashing lights lined the streets menacingly. A spike strip was deployed to cripple the vehicle of any outlaw who dared to enter the town.

But it is not enough for the RCMP to use threats of violence to keep out residents. Some High River residents have firearms in their home, you see. So those homes had to be invaded, and the firearms had to be confiscated.

“People have a significant amount of money invested in firearms … so we put them in a place that we control and that they’re safe,” said one RCMP sergeant.

Oh. They are taking guns to do those owners a favor. See? No problem.

“It’s like Nazi Germany,” says a resident. Yes, it is sort of like that. It’s also sort of like New Orleans and Hurricane Katrina. FEMA confiscated civilian firearms during that disaster in the name of “safety.” That’s the real template for what’s going on here.

This kind of behavior by the RCMP was entirely predictable because of the lessons of Katrina. Memories of the scandals surrounding FEMA’s gross incompetence during Hurricane Katrina’s aftermath informed us how big, bureaucratic government agencies with police powers behave during emergencies. The RCMP is not particularly less malevolent just because they have funny uniforms.

Based on their actions, every level of government involved in the Alberta floods seems desperate to be as incompetent and harmful as FEMA.

The RCMP says they will return the guns to owners “after residents are allowed back in town and they provide proof of ownership.” Something tells me the occupying forces will make it difficult for the gun owners to provide such proof. “Oh, your proof of ownership was destroyed in the flood? That’s a real shame. No gun for you.”

Lorraine Hjalte / Postmedia News

Premier Redford defended the actions of the RCMP. “I really hope that we can focus on more important matters at hand, like getting 12,000 people back into High River than continue to circulate this story,” she said. She seems to overlook that the government has utterly failed in High River. The more they focus on getting High River residents back to their homes, the longer it is likely to take.

When will residents be able to return home? The RCMP tells us: “People much higher up are going to make those decisions.” That sounds efficient. The mayor of High River says no one can return home until Home Hardware and Shoppers Drug Mart are  open. 

In a rare moment of sanity, the Prime Minister’s Office said the RCMP should return the guns. By this I think they mean, “Make it possible in theory for the owners to get the guns back.” Since the Minister of Public Safety is in charge of the RCMP, the Prime Minister can essentially just order the RCMP to return the guns immediately. Yet this has not been done.

But the RCMP never claimed it would keep the guns forever. They’ve maintained the pretense that the guns will be returned. But it’s unlikely that process will be easy.

Will every owner get their guns back?

These are the guys the RCMP is so afraid of?

— Read more at the Calgary Herald, the Globe and Mail, and CBC — 

Alberta Flood 2013: Redford Promises “Whatever It Takes.” Uh Oh.

Premier Redford will help Alberta “no matter the cost.” How generous. But the Alberta government has no money. It’s all spent.

So what her promises really mean is the people who have already suffered enough from flooding will suffer further when Redford taxes them more and grows a bigger debt to dump on them. She would never in a million years cut any spending to free up cash because of unforeseen circumstances.

She will probably use this opportunity to push her darling PST for which she desperately yearns. Of course, it will be promoted as merely a “temporary measure,” but nothing is more permanent than a temporary tax.

Government policy is going to turn this “state of emergency” into a permanently worse Alberta.

Alberta Floods 2013: Calgary Flood Fascism

A crisis always brings out the best in people.

And it always brings out the worst in government.

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Alberta Floods 2013: Zero Connection to “Climate Change”

(Updated! See below)

Various manipulators with socialistic agendas have emerged in the aftermath of the epic Alberta floods to make unscientific declarations about how these floods were caused by “climate change.”

What kind of climate change? Probably global warming, but they don’t actually say so. Global warming ended about 17 years ago.

Global warming propaganda suffered a devastating blow in November 2009 when hackers released emails from the UK’s Climate Research Unit. These emails revealed the depths of deception on the global warming issue. These emails turned the subsequent  Copenhagen meeting on global warming into a big joke and the movement has never recovered. Now propagandists rely on the phrase “climate change” to try and deflect attention from the fact that there is basically no evidence for global warming.

Back in 1975, scientists blamed heavy rain and flooding on global cooling. So who knows?

In any case, it is unlikely that the epic Alberta floods have any connection whatsoever to “climate change”. Downtown Calgary is built right between two rivers — we’re lucky this kind of thing doesn’t happen more often.

Evidence suggests that it used to happen more often. Here are some historical cases of extreme Calgary flooding:

CALGARY (June 1897) Bow River rises about five metres turning downtown into a lake, washing out bridges, short-circuiting electricity and cutting Canadian Pacific’s line to Vancouver.

CALGARY (June 1915) The Bow washes away Centre Street Bridge, nearly drowning two city officials. Sheep Creek floods Okotoks and cuts gas mains, leaving Calgarians without cooking fuel.

CALGARY (June 1923) The Elbow River breaks the 1915 record by 20 centimetres when it rises to 2.9 metres. The Bow River, though it rises 1.5 metres above normal, is still about .6 metres under the 1915 record height.

CALGARY (June 1929) Bow, Elbow and Highwood rivers overflow to submerge High River as well as southwest and northwest city districts under a metre of muddy water. It takes a heavy toll on zoo animals.

CALGARY (June 1932) On June 1, 1932, Calgary receives 79.2 mm over a 24-hour period, just .6 mm less than the average rainfall for the whole month. The empty reservoir of the recently completed Glenmore Dam prevents major damage.

It might seem obvious, but High River’s name didn’t come from nowhere:

HIGH RIVER (May 1942) The town lies under two metres of water after rains swell the Highwood River, forcing evacuation of homes.

And here is a picture of the 1932 Calgary flood. Looks a bit familiar, doesn’t it (note the water level relative to the Centre Street bridge)?

flood

UPDATE: A crushing blow to the climate change propagandists: We are informed by the Weather Network that before the 2013 flood, the eight worst recorded floods in Alberta history occurred before 1933. In 1879 and 1897, the floods were about 35% worse.

floods 

Read more at the Calgary Herald

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