Roundup: Reducing chances of a wage-price spiral

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There have been a lot of misleading things said about the Bank of Canada’s concerns around a potential wage-price spiral, most of them from left-wing economists or union leaders (as well as Jagmeet Singh and Pierre Poilievre), who have wrongly said that either governor Tiff Macklem was blaming wages for inflation (false), or that he told business leaders not to raise wages (also false). What Macklem said was that when negotiating contracts, to remember that they were determined to get inflation back to two percent as quickly as possible, so don’t keep high raises out for too long, because that is what could drive a wage-price spiral. What that means is that because wages would be above the rate of inflation, it means that prices—particularly for services—would need to be raised to pay for those wages, which then keeps inflation higher for longer. It’s also why it’s not just price controls that have happened in the past, but wage and price controls, to try and keep that impetus in check.

Payroll data has been released, which demonstrates why the concerns about a wage-price spiral are abating. Kevin Milligan explains:

https://twitter.com/kevinmilligan/status/1618678055396081665

https://twitter.com/kevinmilligan/status/1618679010099359744

https://twitter.com/kevinmilligan/status/1618680872106086402

https://twitter.com/kevinmilligan/status/1618691478653644800

Ukraine Dispatch, Day 338:

Russians fired more missiles at Kyiv and places like Zaporizhzhia, killing eleven civilians in the process.

Good reads:

  • Justin Trudeau has appointed journalist and human rights advocate Amira Elghawaby as the special representative to combat Islamophobia.
  • Anita Anand announced that we are sending four Leopard 2 tanks to Ukraine, but that includes spare parts, maintenance and training, with possibly more to come.
  • François-Philippe Champagne says he’s in no hurry to sign off on the proposed Rogers-Shaw merger, and wants more assurances around the wireless deal.
  • Canada’s UN Ambassador, Bob Rae, says that the government is sharing information on sanctioned Haitians to convince other countries like France to join.
  • CSE is calling for increased cyber-security vigilance as Russia may choose to retaliate for the decision to send tanks to Ukraine.
  • The Privacy Commissioner issued a report detailing how Home Depot was sharing customer data with Facebook without consent.
  • A new report shows that COVID misinformation cost 2800 lives and $300 million in hospital expenses over a nine-month period in 2021.
  • The dumbest, most parsimonious story of the week goes to the pearl-clutching that some MPs were *gasp!* expensing home internet! And now they’re being forbidden!
  • VIA Rail executives and others were before the Commons transport committee to explain themselves over the holiday travel meltdown.
  • The Liberals are currently holding their caucus retreat, and their Indigenous caucus has some specific items in mind.
  • A few Liberal backbenchers are disappointed to see Trudeau describe Doug Ford’s private healthcare delivery announcement as “innovation.”
  • Liberal MP Kirsty Duncan is taking a leave of absence for a “physical health challenge.”
  • Alberta is looking at changes to rules to ensure oil sands companies pay to clean up mine sites, but their proposals have been panned as severely lacking.
  • Shannon Proudfoot looks back at the start of the occupation in Ottawa, one year later, and talks to some of the participants.
  • Kevin Carmichael explains the coming legislative change to the Bank of Canada’s mandate around retaining earnings so they can cover pandemic losses.
  • Susan Delacourt reflects on one year since the occupation in Ottawa began, and the effect this has had around the prime minister.
  • Paul Wells notes the legitimate feeling of frustration around fairly intractable problems, which makes for difficult political discourse.

Odds and ends:

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2 thoughts on “Roundup: Reducing chances of a wage-price spiral”

  1. Thank you again for clarity on BoC and support for that institution.I shared your you tube video on CHA on my Twitter feed and I am small potatoes, but had over 100 likes and retweets- so thanks for that.

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