Tuesday, August 28, 2018

History of economic analysis

Ontario raised the minimum hourly wage to $14 in January 2018, with a raise to $15 scheduled for January 2019.  David Olive in the Toronto Star notes that most economic forecasters predicted the sky would fall.
In one of the more embarrassing incidents in recent Canadian economic history, the 2017 consensus of economic forecasters was that Ontario would suffer major job loss from the $14 Ontario minimum wage that went into effect Jan. 1, 2018.
To cite only a handful of the alarmists, the Bank of Canada, TD Bank, National Bank Financial and the Financial Accountability Office (FAO), the Ontario government watchdog, all predicted that Ontario would lose between 50,000 and 140,000 jobs because of the new $14 minimum wage.
As it happens, though, Ontario has gained so many jobs since Jan. 1 that by August, the Ontario jobless rate had dropped to an 18-year low, of 5.4 per cent, second-lowest in the country after B.C.
But Ontario elected a Conservative government this summer and it cancelled the second increase. So much for improving living standards, boosting the Ontario economy, and reducing unemployment.

The Globe & Mail is the paper of record in Canada, I know, but I suspect this is not the kind of story that will be highlighted in the Report on Business.
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