Changing the channel on the economy

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At the 2012 CUPE division conventions, National President Paul Moist and Sr. Economist Toby Sanger hosted a series of economic literacy breakfasts to talk with CUPE members about less often discussed economic issues, and why they matter to Canadian workers.

Their presentation helps starts a new discussion on the economy - one where we talk less about what’s in the interests of banks and corporations, and more about what’s best for Canadian workers, their families, and their communities.

CUPE members need to change the channel of the economy.

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Changing the channel on the economy

  1. Changing the Channelon the EconomyCUPE NATIONALMAY 2012
  2. The economy matters... and the economy is you! Close to two-thirds of Canadas economy driven by consumer spending, 1/4 by public spending and only 1/8 by business investmentConsumer spending &investment in housing Public spending & investment Business investment Net exports Average share of Canadas GDP for past ten years 2002-2011. Statistics Canada Cansim Table 380-0002
  3. What is the economy...what is GDP? GDP Spending = GDP Income = + Consumption + Wages, salaries & other income + Investment + Corporate Profits + Government Spending + Taxes + Exports – Imports + Depreciation
  4. Bigger share to profits,smaller share to wagesCANADA: WHERE THE MONEY GOES Depreciation Taxes Corporate Profits Wages, salaries and other incomeSource: Provincial and Territorial Economic Accounts, Statscan Cat # 13-018X
  5. Inequality growing:Top 1% take larger shareTOP 1% SHARE OF TOTAL INCOME IN CANADA Over $100 billionSource: The World Top Incomes Database, http://g-mond.parisschoolofeconomics.eu/topincomes/
  6. Corporate CEOs rake it inINCOME IN 2011 +$5,000,000 Retention Bonus Calin Rovinescu, CEO Air Canada Canada Average Annual Wage Canada Minimum Wage full year earnings full year earnings $3,999,027 $37,630 $18,500Sources: Canadas CEO Elite 100 , Hugh Mackenzie CCPA January 2012; Employment, Earnings and Hours,Statistics Canada cat# 72-002; HRSDC Minimum Wage database.
  7. Public pensions gold-plated? NOT!ANNUAL PENSION Don Stewart, ex-CEO Sun-Life Average CUPE Member
  8. Wage increases fallingbelow inflation againAVERAGE ANNUAL WAGE INCREASE AND INFLATIONCANADA NEGOTIATED WAGE SETTLEMENTS BY SECTORSources: Statistics Canada, Consumer Price Index; HRSDC Annual Wage Settlement Data.
  9. “Social Wage” equal to $17,000 a year - 60% of average incomeANNUAL VALUE OF SOCIAL WAGE – PUBLIC SERVICES--PER PERSON Total value of public services per person: $16,952Source: Hugh Mackenzie and Richard Shillington, Canada’s Quiet Bargain, CCPA2007
  10. Public spending shareof economy at recent 30-year lowTOTAL PUBLIC SPENDING AS SHARE OF ECONOMY CANADA Public spending by all levels of government Source: Statistics Canada, Provincial and Territorial Economic Accounts Data Tables
  11. Tax system becoming more regressive:top 1% pay lowest total rate of tax TOTAL TAX RATE AS A SHARE OF INCOME BY INCOME GROUP CANADA 1990 -2005Source: Marc Lee, Eroding Tax Fairness, CCPA 2007. All federal, provincial and municipal income, payroll, sales,property and other taxes
  12. Fair taxes could eliminate federaldeficit without damaging cutsFEDERAL GOVERNMENT REVENUEPROGRESSIVE REVENUE OPTIONS $ BillionsFair taxes for corporations-Restore federal corporate tax rate to 21% $10.5-Financial activities tax on bank profits and compensation $5.0Progressive tax on high incomes-Tax incomes over $250,000 at 35% $3.5Broaden tax base and close ineffective andregressive tax loopholes- Eliminate and restrict regressive and ineffective federal tax loopholes and subsidies $10.0+Total of above measures (billions annually) $29.0
  13. What we needMore investment in public services • They benefit everybody, reduce inequality and grow the economyFair and progressive taxes • To reduce inequality and pay for public services • Corporate and high income tax cuts haven’t workedHigher wages for workers • Economic growth depends on household spending, workers wages and public spending.
  14. The economy matters!It should serve peoples’, not just corporateinterests.Inequality has increased as a result of governmentpolicies, cutbacks and regressive taxesEquality matters – for the economy, too.We are the 99%More public services, fair taxes and higher wages forworkers are good for the economy
  15. It’s time to take back our economy
  16. Thank you!For more information:cupe.ca/economicsCanadian Centre for Policy Alternatives:policyalternatives.caProgressive Economics Blog:progressive-economics.ca/relentless

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