Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

It may be the ‘best place on earth’ but …

with 5 comments

can we afford it?

B.C. has been hit by the sharpest wage decline in Canada. We have less purchasing power now than we did in 1981, figures from 2006 census show.

And the article looks at some of the reasons why that it so. But what it does not say of course is that much of the recent decline has been due to government policies. The attack on the support workers in healthcare, the continuing privatization of what were once secure public sector jobs. Taxation has been shifted from progressive to regressive – that is what happens when you cut income taxes for the well off but raise all the other fees and charges to pay for services.

Since this region is also the most expensive in terms of housing many households have to have multiple wage earners. Not just Mum and Dad working – and not unusually more than one job, or longer hours – but the kids cannot afford to leave home. Or people hit by adversity later in life having to move back into the family home.

Immigration is the other big headline story – and we have more of that then other places too. And immigrants are paid far less than Canadian born, and their education and qualifications are ignored to “protect” the interests of those already established. This is a huge drag on the economy, as we need the skills and knowledge of the engineers and surgeons who are running 7-11s and driving cabs.

Add rising food and fuel costs to this picture and you begin to understand why people having been feeling more and more under pressure. What is distinctly odd is that this does not seem to affect the government’s polling numbers very much, and they continue to behave as though their re-election next year is in the bag.

Written by Stephen Rees

May 2, 2008 at 9:40 am

Posted in Economics, politics

5 Responses

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  1. On the radio – Brand-x – the two guest pundits, Palmer & Baldry, were somewhat surprised at the figures and the host agreeing. “Statistic’s Canada’s figures are not complete……..” & “There seems to be something missing here?”.

    Well I’m not surprised, as a small business type, I have seen a steady decline in average spending, for the past decade. People just don’t have the money, they once use to.

    Here is the real question: Can we afford building SkyTrain style light-metros, instead of much cheaper light rail?

    Canadian history reminds me that P.E.I. once bankrupted itself by building needless railways, could the same happen here? Well BC won’t be bankrupted, but much funding will be diverted from other projects, etc. to fund prestigious metro construction.

    And please don’t say P-3, out of the $2.4 billion RAV Line, less than $300 million, came from YVR or the Caisse, the rest from various levels of governments.

    Malcolm J.

    May 2, 2008 at 10:47 am

  2. No, Malcolm. I know it is a question dear to you, but it is hardly central to this issue.

    What the people responsible for the current policy environment seem not to understand is that impoverishing the majority of the population is not a good, long term strategy, especially if you measure success by GDP.

    As a retailer you have noticed a decline in discretionary spending. That is what I was pointing to when I wrote “that is what happens when you cut income taxes for the well off but raise all the other fees and charges to pay for services.” Not only have incomes fallen, but shifting to user fees and flat rate charges means ordinary people – faced with rising prices for essentials (food fuel and accommodation) have less to spend on everything else. So of course all local businesses suffer. Carbon taxes and profit taking from Hydro are part of that pattern.

    We might also note that education makes a huge difference in earning ability, but this crowd are cutting higher education spending – but making a song and dance out of changing the label on some places from College to University. All spin, no substance.

    Stephen Rees

    May 2, 2008 at 1:44 pm

  3. You are perhaps right, but you should definitely read this analysis by Urban Futures – there is a lot more to explore in the stats before debating the “why”.

    Urban Futures website:
    http://www.urbanfutures.com

    Direct Link:

    Click to access Income%20and%20Earnings,%202006%20Census%20Findings.pdf

    L

    May 2, 2008 at 3:13 pm

  4. Hmm interesting – but suspect. Why is the Urban Futures being so upbeat about all this? They seem to think that lots of people in the same household with a job is a good thing. But that assumes that all members of the household want to be there. In reality of course a lot of young people are very frustrated that they cannot afford to move out of the parental home and find an independent life. Equally a lot of boomers would like to be empty nesters and downsize – but can’t.

    Similarly I am only too well aware of the number of people who have multiple part time jobs. Or are forced to work as contractors rather than employees (a favourite way to reduce overhead costs). People who find they cannot get enough regular hours to qualify for benefits – or people who are subject to a constant cycle of “on call” or Layoff/recall. Indeed the UF finds that young people are earning more than they once did – but the vituperation seen on this blog about boomers who hang on to jobs and refuse to retire at 65 has to be seen to be believed.

    Now I recognise that is not the same thing as rigorous statistical analysis – but I cannot help but wonder why StatsCan would want to skew the data the way UF says they have. For the sake of headline?

    Stephen Rees

    May 2, 2008 at 3:50 pm

  5. Things are much worse then people realize, home owners from the 80s — 90s–and even earlier decades have used their home equity as ATMS, hundreds of thousands of bcers have used home equity to prop themselves up.

    That is what happened in the USA and when house prices stopped rising and went the other way, DISASTER . Millions of american have been thrust into poverty and if anyone thinks it can`t happen here their only fooling themselves.

    when the housing bubble bursts there will be tens of thousands of bcers with upside down mortgages, these prices are unsustainable, the afforability index in bc is off the charts and with food, energy ,(user fees) blowing past the rate of inflation,well you get the picture.

    The speculators will bail,prices will drop, goverment revenue will falter and their only option is to raise taxes or raise user fees which will ultimately exasperate the problem.

    Great post mr. Rees———————————–signed…………………bubbling for trouble

    grant g

    May 2, 2008 at 6:40 pm


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