Trends Leaders Cannot Ignore

In September I am doing six workshops at Tamarack’s Community Change Institute. One of the workshops is: Ten Trends Leaders Cannot Ignore. I am gathering data right now, investigating trends identified by others; there are so many trends we have to pay attention to that I am not yet certain of the ten I will showcase.  But here are a few trends I am tracking right now that I believe qualify for some substantive, authentic attention by our political, economic, and community leaders.

All the charts below are all based on data from Statistics Canada. Ask yourself what the implications are of these trends and what options we have to address them. While you might take issue with my commentary, the data is the data. Do you think these trends and patterns suggest good news for our society going forward?

wealth
I have written before about Wealth and Income Inequality. While the gap in Canada is not yet as severe as the worldwide trend, the gap is significant and it’s getting wider, as the chart below indicates. Continue reading

Signals of Coming Disruption

Big change doesn’t just click on. It occurs over time, starting out often as weak signals of the change to come. Sometimes it’s like the old frog in the boiling water story. Put the frog in when the water is cool and turn up the flame and eventually the frog realizes its plight, just too late to adjust, to escape.

For years, donor giving has been changing. Charities have become increasingly dependent on larger gifts from fewer donors. As the economy has served to increase the income and wealth gap between the small numbers of wealthy and the rest of everyone else, we have seen food bank use escalate and a growing number of workers living pay check to pay check. Job security is no longer a reasonable expectation for a growing number of people, much less the chance for advancement. Employee supported pensions are no longer the norm and health and dental benefits are harder to come by for low income workers and many who do not yet qualify as “low income” workforce members.

imagenoise_signalmlab2The adaptations charities have taken have been focused on how to grow revenues through different sources of revenues. Funders are looking at alternatives too, given their inability to fund all the good things that come their way. Crowdfunding, social enterprise, impact investing, social purpose businesses are among the more recent options in financing social good.

GDP growth has been slowing, 80% of Canadian incomes are not increasing or if they are, at far less a rate, the restructuring of the job market is creating more insecure and benefit-less employment. the ratio of workers to seniors is dramatically decreasing. Key drivers like oil prices are in turmoil. Consumer debt keeps increasing. The numbers of people making $15 or less are growing as businesses work harder to cut back on expenses in order to feed more profits to investors. Continue reading

Higher Minimum Wage: More Gain than Pain?

The debate about having a living wage has many voices. A colleague recently shared a public letter that a chef wrote to the Premier, expressing how a minimum wage of $15.00 per hour would jeopardize his plans to open a restaurant. He makes many excellent points and does so in clear and respectful language.

My colleague also suggested I remember that in Edmonton we have far more small businesses than large corporations and the former may be hard pressed to survive such a rise in the minimum wage. I am sure small businesses will be impacted, which very well may call for an innovative way to introduce a new way of delivering a minimum wage, perhaps in gradations, or by age of the employee.

But also as I wrote in my previous posting, I think there a point where the subsidies our governments provide directly to the poor (transfer payments, child subsidies), also are a type of subsidies for profitable businesses who keep wages below what they should be in order to boost profits for a minority of the population.

There are many, many articles in our newspapers and many statements put out by groups like the Chamber of Commerce that offer dire warnings about increasing the minimum wage. Lost jobs, higher consumer prices, bankrupt businesses, and smaller profits that will hurt the economy are among the warnings. These warnings are often attached to projected numbers of jobs lost, which often don’t seem to be based on any real research.

There is a growing number of research reports that indicate these warnings and fears are unfounded or at least far less severe as some make them out to be. For example the Canadian Centre for Policy Alternatives released Dispelling Minimum Wage MythologyHere are two excerpts:

There are other reasons why higher minimum wages will not generally translate directly into reduced employment,…First off, an increase in the minimum wage will translate only partially into an increase in the average wage, since minimum wage workers, and those better paid workers whose wages are still linked to the minimum make up only a portion of total employment.

A higher minimum wage is shown to be associated with higher labour productivity for several potential reasons, including greater loyalty and work effort by better compensated workers, more attention to performance standards by employers, and more investments by employers in innovation and technology instead of relying on cheap labour as their core business strategy. Another benefit of a higher minimum wage is documented reductions in labour turnover, which leads to lower recruitment, training, and retention costs for employers. All of these factors imply that any final increase in nominal unit labour costs facing employers will be much smaller than the initial increase in the statutory minimum.

The CCPA report is worth a read if you are serious about considering the potential pros and cons of higher minimum wages. Much of what is there can be applied to the Living Wage debate.

In 2013, The New Yorker published The Case for a Higher Minimum Wage. While their data is based on experience in the United States, here is an interesting quote from the story:

… [T]here is no obvious link between the minimum wage and the unemployment rate. During the nineteen sixties, when the minimum wage was raised sharply, unemployment rates were sharply lower than they were in the nineteen eighties, when the real value of the minimum wage fell dramatically. If you look across the states, some of which set a minimum wage above the federal minimum, you can’t see any sign of higher rates leading to higher unemployment. In Nevada, where the national minimum of $7.25 an hour applies, the jobless rate is 10.2 per cent. In Vermont, where the minimum wage is $8.60 an hour, the unemployment rate is 5.1 per cent. What these figures tell us is that other factors, such as the overall state of the economy and how local industries are doing, matter a lot more for employment than the level of the minimum wage does.

The article goes on to say that  “there are also a number of studies that show minimum-wage laws having no effect at all on employment, and even some studies showing a small positive effect.”

What to do about a minimum wage or a living wage is not an easy challenge. We want a strong economy, but one that benefits a minority in lopsided ways is not, I suggest, a sustainable economy. The more economically vulnerable people become the less able they are to be full-participating consumers. In other countries where the minority benefit far more than everyone else, we see increased polarization and intolerance, more prison sentences given to the poor and struggling, more health problems for the majority, and so on.

For those who “side” with the business argument against the minimum wage or a living wage because such programs will hurt business, how do you explain to the thousands and thousands of people earning less than they can live on how the economy benefits them as is?

More food for thought.

Guaranteed Minimum Annual Income in Alberta?

The Mayors of Edmonton and Calgary are talking about it (read). Many agree with them and I am one; it’s worth a good look. In fact, I suggest that a guaranteed annual income be considered as a foundational strategy to lift hundreds of thousands of people out of poverty. Whether or not it will work depends on a myriad of factors that I do hope we will aptly include in a comprehensive approach to poverty elimination.

I won’t pretend that I know what the answers are for what ails us. I have opinions, of course, some of which are based on experience and understanding of poverty’s causes and effects, but I do have a litany of questions – perhaps better called wicked questions — that I suggest our government, community, and business leaders should consider when contemplating how to end poverty or how a GAI might markedly improve things throughout our province.

How will the “minimum” be determined and by whom? Our tendency nation-wide up until now has been to set poverty lines (e.g. LICO) that many agree sets its low income lines far lower than reality would dictate. This means we have many who are actually living in poverty that we do not recognize to be poor.A low cut off keeps the numbers we report lower than they actually are. A Guaranteed Annual Income may work if minimum income is actually sufficient income to live a life.

What other changes are required that together with a GAI will leverage our collective ability to end poverty? How would the housing market and its economic impact on people be factored into a GAI? For example, as mentioned in my recent posting, The Twist on the Minimum Wage Debatethe cost of rental accommodations rose on average by 75% between 2000 and 2010. How would we adjust the GAI to reflect that huge increase in housing costs? Continue reading

The Twist on the Minimum Wage Debate

There is a twist of sorts at the end,
but reading your way might better than just
scrolling down to the end. Just saying.

There is an article in the Edmonton Journal called, Opinion: Don’t Rush to Boost the Minimum Wage (read it). The topic is front and centre in the minds of many because of the NDP’s stated objective to raise the minimum wage from $10.20 to $15.00 by 2018. It’s a big jump and of course has a range of implications.

Just what those implications are is contextual to what lens we are looking through. Small businesses, for example, may have a hard time paying $15.00 per hour, especially when they are small business entrepreneurs are trying to build a business and make their own living from it. As the Journal points out, fast food places worry about the wage hike and how it might affect prices and consequently their businesses.

What about the impact on students trying to find summer work or part-time work during the school year? What about restaurant servers that get a wage plus tips. Should they get the same minimum wage as someone who does not get tips?

One suggestion mentioned in the article has to do with exploring the notion of a gradated minimum wage that increases with a person’s age. For example, the wage might be lower for 16 to 18 year olds but be higher for 22 to 26 year olds. This is done in the Netherlands and might we worth a review by our government. Continue reading