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Why Canada's productivity has been underestimated for decades
- otoburb 14y ago>>But he said the numbers could mean a lot to Canadian monetary and fiscal policy going forward. Although I tangentially understand there could be implications to "monetary and fiscal" policies I would suspect these possibly revised productivity numbers will only weakly influence such policies. The main thrust of Canadian economic policy since I can remember has been to control targeted inflation rates, which is presumably easier to measure, or at the very least uses a more widely accepted measuring process (e.g. basket of certain goods or other inflation indices). With a renewed interest to control unemployment as opposed to inflation (more in line with the USA), I find it hard to believe that revised productivity measures over the past 50 years will much impact cabinet, Parliament or Bank of Canada decision making. Can any HN economists comment on whether productivity measures would really have any impact on policies given overriding concerns on inflation or unemployment targets?
- deleted 14y ago[deleted]
- cryptoz 14y ago> Can any HN economists comment on whether productivity measures would really have any impact on policies given overriding concerns on inflation or unemployment targets? I'm not an economist, but I'm a Canadian. And I'm going to give you an answer that's not what you're looking for, but it's important: No impact. Our government has been very, very clear about this. Measures, data, and statistics are intentionally buried and ignored during policy making. So if they exist, no, they won't have any impact. I'll quote our government for you: "We don't govern on the basis of statistics"
- codewright 14y ago>"We don't govern on the basis of statistics" K, coming off my expat hot list.
- aroberge 14y agoPlease note that this is (hopefully) only a temporary aberration and that it will be changed following the next election.
- _delirium 14y ago> "We don't govern on the basis of statistics" For those curious, as I was, this quote seems to originate from: http://www.ctvnews.ca/justice-minister-defends-day-s-unreported-crimes-claim-1.539083 http://www.ctvnews.ca/justice-minister-defends-day-s-unrepor...
- refurb 14y agoOh lordy, I can see the politics in Canada isn't much better than the US: Liberal justice critic Mark Holland agreed that unreported crime is a legitimate phenomenon, but questioned Day's suggestion that it justifies expensive new prisons during an era of huge budget deficits. "Is this an absurd reason to spend $10- to $13-billion on Republican-style mega-jails? Do they propose to lock up people who aren't being charged? To round up anybody who looks suspicious?"
- jt2190 14y agoIt's actually worse, because in Canada, a government with a majority gets to pass all of their legislation, no matter how bad it is. In theory, this should not happen as Members of Parliament (a geographically representative body) "cross the aisle" (to borrow the US phrase) to vote against legislation that is bad for their constituents. This never happens though, because any majority member who votes against the party is immediately kicked out.
- refurb 14y agoIt's the parliamentary system, that's how it's supposed to work, no? If the legislation is bad enough, members can cross the floor and join another party. If the legislation is on something crucial (budget) it's a non-confidence vote and an election is held.
- jt2190 14y ago> members can cross the floor and join another party You're technically correct: The member could join the other party, however, this is not how it actually works in Canada. Members who vote against their party are expelled and are not able to join the opposition. They sit out the session as an independent. (Independents have essentially no power in the house.)
- cynicalkane 14y agoI'm not a Canadian, nor an economist, but: If the Canadian central bank is like any other central bank in the non-Euro world, it governs primarily on the basis of statistics. There's political influence, sure, but monetary policy revolves primarily around numbers. And depending on which version of mainstream economics you subscribe to, the importance of central bank policy in macro supply-demand equilibrium ranges from "all-important" to "almost all-important". Those macro figures are crucial in unemployment and inflation numbers, and are increasingly suspected to play a part in the labor-capital balance. TL;DR Medium-term macro numbers depend primarily upon the central banker manipulators of macro numbers.
- redthrowaway 14y agoIt's unfortunate, but true. Harper wants to be able to implement policy without pesky reality-based counterarguments getting in his way. I'm pretty heavily slanted towards the economic liberty side of things, but I simply can't abide a prime minister who so proudly proclaims his disdain for stats. Especially a PM who has an MA in Economics.
- jdougan 14y agoPerhaps his Econ degree is the reason Harper disdains stats...
- mef 14y agoSidebar, why didn't the reporters ask Statscan to respond to the allegations in this story? Seems a bit one-sided.
- sliceof314 14y agoThe article quoted the official response to the paper. Canadian government officials are routinely muzzled, the official response is all you get these days.
- deleted 14y ago[deleted]
- kennywinker 14y ago> The paper also challenges the reliability of official data from Statscan, which has been hit with deep budget and staff cuts in recent years. It said the agency is beset by “data problems.” Big understatement. The current government (incidentally, elected to a "majority government" by 37.65% of the popular vote... which is 23.1% of eligible voters) has completely crippled Statscan by killing the mandatory long-form census... the thing that gave their statistics a basis in fact (http://www.theglobeandmail.com/news/politics/statistics-canada-chief-falls-on-sword-over-census/article1320915/ http://www.theglobeandmail.com/news/politics/statistics-cana...).
- greenranger 14y agoThis article was chock full of hyperbole without a single iota of stastical number crunching. I suffered the entire article - because I'm a canuck - and I cannot for the life of me understand the point of this article.
- rpm4321 14y agoThis is a bit of a tangent, but I was wondering if anyone on HN has any experience moving from the US to Canada? I'd like to live in Toronto at least for a couple of years, but I'm not sure how involved the redtape would be, especially because I'm a freelancer and I won't really have a Canadian employer, clients, or a business purpose I can claim for my residency.
- mcrider 14y agoI did the move for school. In that case, it is very easy (and working after school is easy as well). For you, you'd probably need to find an employer sponsor your work permit. This is difficult unless you're highly qualified since they can find employees without the extra paperwork in Canada (and Canadian companies are legally obligated to fill slots with Canadians unless they can't find any, which is easy enough to get around but still a PIA for employers). Your other option is to have a canadian partner/family member sponsor you to move to Canada (not super complicated, but takes over a year). There are more options, such as 'skilled worker' immigration, but I forget the specifics. Basically you'll need to wait a long time (unless you can cough up half a million dollars for business class immigration). I am back in the US for a couple years but I intend to move back using my Canadian partner to sponsor my immigration (I miss Canada!).
- aroberge 14y agoWhat is it that you miss about Canada? Much of what I read on HN would point to advantages of being in the U.S. compared to pretty much everywhere else.
- idm 14y agoThe "skilled worker" immigration is the ticket for anybody trying to move from the US. However, to qualify for this, you will probably need an employer to sponsor it. This route also depends on credentialing, so academic transcripts and whatnot will be scrutinized.
- afterburner 14y agoSkilled worker or some such, don't need a job to sponsor you, takes 16 months (sometimes less, although probably sometimes more).
- redthrowaway 14y agoIt'd be nice if we gave StatsCan, our National Boffins, the ability to make mathematically justifiable claims about the nature of Canada. Unfortunately, the current government decided that voluntary surveys were a perfectly sufficient form of data collection for our national bean counters, and has proudly proclaimed their disinterest in the use of stats to form policy. Don't worry though, the guy who came up with the previous idiocy has a Masters' in Econ. Joy.
- cwan 14y agoSarcasm notwithstanding, can you explain how the long form survey would have helped here? Adding to this, the short form survey is still mandatory where "mathematically justifiable claims about the nature of Canada" can still be made particularly with respect to demographics. Furthermore, compared to the census requirements elsewhere, the long form was unnecessarily intrusive (which included mandatory questions like how many rooms in your home have "missing or loose floor tiles.") The decision to cancel the mandatory long form survey and make it voluntary was made June 17, 2010. The issue raised by Diewert suggests "that Statistics Canada has badly underestimated the growth of so-called multifactor productivity as far back as the 1960s."
- cwp 14y agoIt's only related insofar as both problems stem from the Harper governments general disinterest in, and declination to fund, accurate data collection and analysis.
- Ramonaxvh 14y agoAm I reading it right that America has to import skilled workers, but Canada has so many they try to keep them out?
- gavingmiller 14y agoAnecdotally that appears to be correct. My company tried to sponsor a graphic designer to come up from the States. We were denied because the gov't said there were more than enough skilled graphic designers available.
- blindhippo 14y agoTo be fair though, there really are enough skilled graphic designers around - especially in the cities. Software developers on the other hand...
- gavingmiller 14y agoCompletely agree with you. It's a good time to be a software developer! :D
- alsocasey 14y agoObviously depends on the market, but... in Vancouver for example, median wages are simply not competitive when compared to what's available 3 hours south of the border.
- Someone 14y agoCan anybody explain how that could happen? The difference between "shrinking since 1977" and "growing a percent a year since 1977" is so huge (at least 50% productivity) that I cannot believe that this is true. Are people working fewer hours than the statistics bureau is aware of? If so, what do these people do in their spare time that does not show up as a "hey, that's funny" at the statistics bureau? Or are there scores of 'died, but still reported as working' workers? Alternatively, if the productivity is in "output per unit of capital": how do they hide using fewer resources from the government? Stockpile oil amd machinery? Or do they produce more, but sell on the black market? For at least one of these, the estimates that the statistics bureau makes about them would, by now, have to be off by at least 20% or so. I think they would have noticed that. On the other hand, I can easily see them as underreporting productivity growth by a few tenths of a percent each quarter, especially when reporting shortly after each quarter ended.
- jt2190 14y agoFrom the article: > Statistics Canada issued a response... saying the > agency follows international guidelines and practices. > Given that Canadian productivity is frequently compared > with that of the U.S., the methodology behind the > estimates for Canada “should be comparable to the > largest extent possible to that used by the U.S. > Bureau of Labour Statistics,” said Wulong Gu of > Statscan’s economic analysis division.
- yummyfajitas 14y agoMost likely mistakes were made when calculating inflation rates. This is actually a pretty easy thing to do and will easily go unnoticed. As evidence that this can occur, consider the US - inflation was known to be overstated by 1.3%/year before 1996. https://en.wikipedia.org/wiki/Boskin_Commission https://en.wikipedia.org/wiki/Boskin_Commission We probably do better by now, but there are still fairly well known upward biases in our inflation calculations. For example, consider the lack of hedonic adjustments to medical care in CPI. If an laparoscopic surgery today costs more than living in pain in 1970, the BLS counts the cost increase in "medical care" as inflation. http://www.bls.gov/cpi/cpihqaitem.htm http://www.bls.gov/cpi/cpihqaitem.htm
- mcartyem 14y agoCan anyone who read the article say in less than ten words why Canada's productivity has been underestimated for decades?
- otoburb 14y agoClaims of multi-factor productivity underestimated in labour productivity calculations.