What are the Think Tanks Thinking? (June 4)

Terrance Hunsley
Terrance Hunsley

This week we take a look at recent work by Social Europe, the C D Howe Institute, Brookings Institution, Income Security Advocacy Centre, Tax, Society and Culture, The Institute for Public Policy Research, and the Fraser Institute.

 

 

Social Europe… Sonja Bekker, Digital Welfare States: Boundaries and Opportunities

The article speaks to the use of information technology to assess eligibility, to intervene, to investigate fraud, to trace contacts or movements related to COVID. A court found SYRI (system risk investigation) violated European human rights legislation as invasive. She recommends principles of …transparency, purpose limitation and data minimization. Such principles also appear in the guidelines for contact-tracing apps recently promulgated by the EU’s eHealth Network.

Technology has great potential for welfare states .. eg .. targeting benefits even in advance of need, by predictive AI… also assessing the impact of prospective measures, or intervening with prevention initiatives. But there is a thin borderline between risk assessment and profiling. Data integration by governments brings concerns of big brother, yet express unlimited  permission is given to Google or Facebook or the bank or anyone else who requests it. (“accept terms and conditions”) Police can do far more investigating of private life using Facebook or ancestry.com than through CRA records or Employment Insurance records…. If they take people’s cellphones or laptops, they have access to an entire life in detail. So privacy needs to be redefined and in very clear terms… what are the desired results of privacy?

https://www.socialeurope.eu/digital-welfare-states-boundaries-and-opportunities

 

 

CD Howe Institute. 

Stephanie Lluis, Lessons from Employment Insurance for the CERB

The article suggests that taking up part time work will be an important factor, given the uneven kind of recovery expected. She points out that the EI provisions for permitting earnings while on claim, indicate that work behaviour is quite sensitive to the amount of earnings permitted, as well as the rate of clawback on earnings over a certain threshold. Permitting more earnings and clawing back less, result in more work behaviour. She suggests that the administration of part time work benefits be ported over to CRA and added to the CERB operation. She also suggests that individualized earnings provisions be considered based on individual work experience records, and that CRA might be best to do this. 

https://www.cdhowe.org/intelligence-memos/stéphanie-lluis-–-lessons-employment-insurance-cerb

 

 

Brookings Institution   Christopher Thomas, The Case for More International Cooperation in Education makes the argument that educating the entire population, mandatory at basic levels, and with equal access based on merit at higher levels, is one of the main drivers of success.

Indeed, the countries that educated their populations a generation ago are realizing the benefits now. Countries that moved up in the World Bank’s income group classification during the last 30 years educated a much higher proportion of their populations at the secondary and higher levels by 1990 than countries which remained “trapped” in their income group. They prepared more people to take on higher-skilled, higher-wage employment. They had a larger stock of professionals across many fields needed to build a well-functioning economy and society. And their transition to more educated and more prosperous societies has been accompanied by a transition to more sustainable population growth, greater peace and security, and more progressive social and environmental attitudes.

The challenge now is to up the game across vast populations, given the educational needs of the digital economy.

https://www.brookings.edu/blog/education-plus-development/2020/06/02/the-case-for-more-international-cooperation-in-education/?utm_campaign=Brookings%20Brief&utm_medium=email&utm_content=88878252&utm_source=hs_email

 

 

Advocacy groups are urging federal action to support low income people and those with disabilities during the pandemic. The Income Security Advocacy Centre, and the Ontario Disability Support Program Action Coalition, are circulating an open letter to the Prime Minister, as well as a petition to the same purpose. 

The letter can be accessed at:

https://mailchi.mp/fb999e7cc226/calling-on-trudeau-to-support-low-income-canadians-during-covid-19?e=04e74df02b

The petition can be accessed at: 

https://www.change.org/p/justin-trudeau-extend-emergency-gst-monthly-thru-september-e7fe1614-c6cb-4d9a-9c62-1188399ae57e?utm_content=cl_sharecopy_22394563_en-CA%3Av11&recruiter=36859111&recruited_by_id=c8aca1c0-2b85-0130-9edc-3c764e049c64&utm_source=share_petition&utm_medium=copylink&utm_campaign=psf_combo_share_abi&utm_term=share_petition,

 

 

C D Howe Institute

C.D. Howe Institute’s Crisis Working Group on Public Health and Emergency Measures. (Co-Chaired by Janet Davidson, Chair of the Board of the Canadian Institute for Health Information and former Deputy Minister of Health (AB) and Tom Closson, Co-Chair of the C.D. Howe Institute Health Policy Council)— address the situation of long term care and assisted living facilities, where about 80% of COVID deaths have taken place – a death rate much higher than most other nations.

The group points out that Canada systematically underfunds home and community care settings, especially relative to institutional settings like hospitals. The chart below compares Canada’s use of nurses and personal support workers with other OECD countries.

 They cite specific weaknesses that need to be addressed …

 the dependence on part-time and contract workers, consistent underfunding relative to hospitals, lower wage rates, among others.

Hong Kong is an example of successful containment and prevention, noted some members. Hong Kong has achieved zero deaths in care homes by employing rapid and rigid isolation protocols. In addition, every care home has trained infection control staff that regularly conduct simulation drills of an infectious outbreak. This practice is common in Canadian hospitals, but not in residential care facilities.

The current system creates a perfect petri dish to spread uncontrolled infection, in the view of some members. The working group noted the system depends on relatively low-paid workers, many without sick leave benefits, possibly with limited access to personal protective equipment, working in multiple facilities with immunocompromised and vulnerable populations. Group members also noted that limited job security, retirement benefits and other factors contribute to the generally lower quality of employment in the residential care sector, relative to hospitals. Rather than blame long-term care residence operators, group members noted that contract rates paid to these providers by government have not kept pace with increases in case complexity and inflation.

 

 

Tax, Society and Culture

Professor Allison Christians of McGil University Law School talks about the potential for a Global Excess Profits tax. Professor Christians talks about the work of the OECD, and how excess profits might be assessed. The discussion addresses companies which have made huge profits because of COVID 19 and the distortion of the overall market. She also speaks to current work being done internationally to try to develop a fair tax system for global corporations. 

Also the question is addressed if after COVID, will countries revert to a model of seeking international consensus and collaboration, or will they begin to act unilaterally?

Go to:https://www.allisonchristians.com/blog/designing-a-global-excess-profits-gep-tax

 

 

The Institute for Public Policy Research (UK) has launched a project to re-imagine the future welfare state that should be sought, coming out of the COVID criis: 

It is clear that we need to ‘future-proof’ our welfare state, but historically, welfare states in the UK and across Europe have remained ‘frozen’ in the face of new social risks.

The lesson from shocks like Covid-19 would seem clear: that we must ‘future-proof’ our welfare state now to ensure we are ready for them. However historically there has been institutionalised resistance to reforming the welfare state among key voter groups. Contrary to popular belief, it is the middle classes who are the greatest beneficiary of social security entitlements in the form of pensions and health spending. Combined with the fact that older people are more likely to vote, this creates a powerful political coalition and can crowd out the fiscal space to respond to new challenges (Pierson 2011), making reform of the system highly challenging. Given that younger people and the most disadvantaged are typically disproportionately affected by recessions, with lasting ‘scarring’ affects, this raises important questions about how we can best ensure our welfare state is serving each and everyone of us. 

The challenges are laid out in the graphic below. 

https://www.ippr.org/files/2020-05/the-decades-of-disruption-may20.pdf

 

 

The Fraser Institute has published an interesting work entitled Reducing the Work Week Through Improved Productivity, written by by Steven Globerman and Joel Emes.

Specifically, if labour productivity growth averages 2 percent per year from 2018 to 2030, Canadian workers in 2030 could work a four- day work week year-round while enjoying a higher material standard of living than they enjoyed in 2018.

The document  indicates that a 2% annual growth rate would be substantially higher than recent trends. In fact, from 200 to 2018, annual average wages increased by about .9% per year, while, average annual hours worked decreased by a total of about 4%. 

In earlier periods, labour productivity rates did exceed 2%, so the challenge is theoretically achievable. We will take a closer look at this challenge and post an article on it in the near future. 

https://www.fraserinstitute.org/sites/default/files/reducing-the-work-week-through-improved-productivity_0.pdf

2 comments

  1. These are all based on industrial age thinking and have, at best, a passing relevance to a successful future. The Fraser Institutes’s labour productivity study is based on the industrial age labour theory of value which has been thoroughly superseded for some time. Binary economics, or the two factor reality of production, rightfully gives automation, or capital, its own domain. With machines increasingly producing other machines, capital or automation is no longer merely an adjunct to labour. Economic policy must be designed around this reality. And not with some mandated doling out of universal basic incomes, but an ownership society, where each and every individual is an active, not passive, recipient of automated production.

    Where does the money come from? Where did the money come from the fight WWII, when there was none during the Great Depression? Read Moulton’s Formation of Capital if you need the technical jargon.

    And the 2% growth rate? Growth in what? Even Kuznets warned against using the GDP to measure wealth.

    ‘Future Proof’? Well for starters, there is no such thing; but to take baby steps in that direction, the subject matter would be ecological sustainability and asteroid defence.

    For the economy, it’s cybernetics 101 there is no planable future with a positive feedback loop in the monetary system. You can’t design strategies around a debt based, compounding interest system, unless the strategy is to have a catastrophic collapse. It looks like sanity is being to prevail again with 0% interest rates, but it’s not nearly enough for another temporary, capricious cessation.

    Anything physically possible is financially possible, with the only constraints being ecological and psychological. Kilowat hours, moving into a full resource based symbol, is a beginning of a monetary system that moves beyond the industrial age. And design a sensible GDP while you’re at it (and none of this happiness index, centralized design, nonsense – happiness comes from within, not without). Again, an ownership society is the way forward.

    Anyways, more like tar pits, than think tanks, when very smart people design around a dead industrial aged system. For some information age economic and social progress possibilities, see gjmer.org

    Like

  2. I love this kind of comment. Opens the imagination. An ownership society was George W Bush’ slogan. Obama referred to it as a “You’re on your own society.” Gotta be careful what you wish for. And ask the question, How do we get there from here?

    Like

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