It is election time in Ontario, and Tim Hudak, leader of the PC party, says he’ll produce more jobs by cutting 100,000 public sector jobs. There’s a variety of good arguments against this magical thinking.
The method by which balancing the budget will lead to more jobs is obscure but seems to be focused on the idea that a balance budget will bring more confidence in the economy. Jim Stanford challenges that assumption:
For example, an oft-cited belief of budget-cutters is that business investment will increase, thanks to greater “confidence” about Ontario’s “economic fundamentals.” This is far-fetched: surveys of business executives (such as those conducted regularly by the Bank of Canada) list many factors hampering business investment spending (despite the super-strong state of corporate balance sheets), but the size of the provincial deficit is never listed among them. (Business lobbyists tend to support austerity, of course — but because they favour the resulting reductions in government programs, not because it will “allow” them to invest more capital.)
Thomas Walkon, of the Toronto Star, points out that all parties are trying to bribe factories to produce jobs. The NDP do it with tax incentives for machinery investment and wage subsidies for new employees. The Liberals do it with subsidies.
Progressive Conservative Leader Tim Hudak’s solution is more 19th century. He has flirted with labour law changes aimed at reducing whatever union power remains in Ontario. That would be his bribe to employers.
But the Tory leader’s real focus is on balancing the budget. To that end, he proposes axing 100,000 public servants, including teachers. The net gain from firing these 100,000 people, he insists will be one million new private sector jobs.
It is an optimistic calculation based entirely on faith.
Think of it as human sacrifice.
But the rebutal I like best is this:
“Hello, I am a Nigerian Prince and I have 1 million jobs for you. To complete the transfer, first send me 100000 jobs.” – Tim Hudak #onpoli
— Michael Green (@lifebettergreen) May 9, 2014