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Originally posted by Stephen Gordon:
I don't know. Not that it matters: Look at figure 4 in this paper (45-p pdf). Inequality in market income in Sweden is about the same as in the US, and higher than in Canada. Disposable income is much more equal, thanks to the transfers.

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I find this hard to believe, but I understand what it's saying ... in general. I'll have to comprende for now. I can't find anything on market incomes or wage floors in Sweden, but the web material in general says that Swedes have the highest rate for wages decided by collective bargaining units. And corporations are obligated to pay into workers' social and development funds. And low wage philanthropists like this company are kept at bay by strong trade unionism in Sweden.

I'm pretty sure this is not the case in U.S. states where Taft-Hartley right-to-work laws have intervened in labour markets on behalf of employers for many years. In Canada, 175 restrictive pieces of labour legislation were passed by governments across the country since 1982. I just don't think we can trust either of the two oldest political parties to deliver on social transfers or poverty reduction programs in general. British Labour is reducing child and adult poverty, and they admit now that multifaceted approach is what's needed. Here in Canada there have been so many Liberal and PC Party election promises that just weren't worth the paper to print them.

eta: In other words, the Swedes have governments and labour unions bargaining on their behalfs for living incomes in general. Here in Canada we have a lot less of both.

Here's what economist Andrew Jackson says about minimum wage:

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The cry from business and the right that decent minimum wages come at the cost of jobs flies in the face of the simple empirical reality that countries with relatively high wage floors compared to the national median wage do not necessarily have low rates of employment or high rates of unemployment. The proportion of full-time workers with low-wage jobs (less than two thirds of the median hourly wage) is 22% in Canada, but just 7% in Sweden and 9% in Denmark.(pdf)

In 2005, the employment rate (the proportion of the 15-65 age group with jobs) was actually higher in both Denmark and Sweden than in Canada. And there is, according to the OECD, no relationship between the incidence of low-wage jobs and low unemployment in OECD countries. In short, the argument of the right that countries cannot have both a decent wage floor and high employment/low unemployment is simply wrong.

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So there were have it, Canada has an unusually large low wage workforce compared with Scandinavian countries and Europe. If there was a country with a need for a decent wage floor and freer labour markets, meaning less restrictive labour legislations favouring private and public sector employers, it's Canada. And it might actually help if the feds and provinces were to remove their big business-friendly jackboots from the necks of lowly-paid workers in this country as a very first step towards Scandinavian and European-style poverty reduction.

Does anyone have an international graph of lowest wage labour costs as a percentage of median for each country?

[ 14 January 2008: Message edited by: Fidel ]

And I've come to the conclusion that Stephen's Plan Sweden won't work here in Canada. We don't have the same rate of unionized labour, and unless the 175 restrictive pieces of labour legislation passed across the country since 1982 are stricken, truly free labour markets will not be a feature of Canadian economics.

Canada's two governing parties have only reduced corporate taxation. Raising overall labour costs are not in the red or blue book plans for natural resource-rich Canada any time soon.

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Originally posted by Erik Redburn:
Not me, but I have heard that our manufacturing sector is bleeding jobs, even from sources economists might listen to. Like themselves.

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Although it's not clear why it's a problem. Clearly, a decline in employment caused by massive layoffs would be a cause for concern. But that's not what's happening: those job losses are occurring by attrition. Layoff rates in the manufacturing sector are have actually declined, while quit rates are up. What's happening is that hiring has almost completely dried up. The number of unemployed manufacturing workers has actually been falling over the past five years.

Manufacturing job losses more than double in 2007 January 11

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Georgetti notes that Statistics Canada’s Labour Force Survey for December 2007, released today, defied even the most pessimistic forecast. The country posted an overall loss of jobs. Young workers are leaving the job market. Private sector creation of paid employment is particularly weak.

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