AltAusterity Digest #28 December 28, 2017 - January 3, 2018

The Bank of Canada has released a report predicting a loss of about 60,000 jobs due to minimum wage hikes. With Ontario raising its minimum wage, and with Alberta, Quebec and PEI expected to follow, economists and business leaders have argued over the impacts the wage changes will have on the economy. Additionally, despite wage increases around 20%, the Bank of Canada is only predicting a 0.1% rise in inflation. The positives of increased purchasing power and smaller income inequality may be offset in the short term with job losses in low wage sectors.

With youth unemployment above 40%, and receiving a disproportionate influx of refugees, Greece is looking for ways to tackle both problems. As Greek youth have migrated from rural areas to the cities in search of work, it has presented an opening for refugees from rural areas to take up the work left behind. The Omnes Volunteer Association is working to establish cooperative farms to give refugees a stake in the Greek economy.

The number of governments in default to private creditors in 2017 fell to its lowest levels since 1977, according to the Bank of Canada. Only two countries, Venezuela and Mozambique failed to meet creditor payments. According to Gabriel Sterne of Oxford Economics, this trend is in part due to emerging economies increasingly borrowing in their own currencies. Of 54 emerging markets, only 11 have foreign-currency bonds worth more than 20% of their GDP. Instead of defaulting on local-currency bonds, countries now have the option to depreciate currency by printing more to service their debts to themselves. This has had a major impact in Venezuela as food is becoming unaffordable, medicines are being smuggled in from Colombia, and the currency lost 60% of its value last month.

In David Dayen’s piece for The Intercept, he examines the rise of center-left American think-tank the Economic Policy Institute (EPI). The EPI started as a joint project between the labour movement and a group of prominent liberal economists, intending to fill the ideological gap within the American policy debate. The EPI were one of the first American organizations to point of the increasing bifurcation of productivity and wages, which has now become conventional wisdom and entered centrist debates. Additionally, the EPI’s work has covered the relationship between socioeconomic status and student achievement, automation and inequality, and the role of tax cuts and lower wages.

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