Here’s why Doug Ford won’t congratulate the Ontario-born winner of the Nobel Prize for economics

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It’s not just noted by Doug Ford:

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The Nobel Prize in Economics has been awarded to Ontario-born academic David Card.

congratulations come first from Prime Minister Justin Trudeau, shortly thereafter a salute to the public from the leader Ontario’s loyal opposition, Andrea Horvath.

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Still, as of yet, there’s not a glimpse from the premiere. When I asked his office why not, no answer.

Why has Ford lost its tongue at the global victory? What’s not to like about the latest, greatest contribution to economics?

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After all, Ford is quick to boast about the province’s wealth of world-beating human genius. Is the Nobel Prize not a valid proof point or personal confirmation for a premier who tells the world that our classes produce world-class graduates?

Educated at Queen’s University, born and raised near Guelph (not unlike another famous economist, the late John Kenneth Galbraith), the card has been praised every quarter this week. Yet he remains unharmed in Queen’s Park.

Ford’s silence amidst the clock of the province’s conquest is a learnable moment, and a cautionary tale of a competing story.

The plain-spoken premier isn’t fond of “elite economists” locked in an “ivory tower” as he defied them in a remarkable 2019 speech. Yet it hardly describes the card, which was raised on a farm and now serves as a state-of-the-art field.

He broke new ground on the minimum wage, breaking the conventional wisdom that raising the hourly rate would prompt employers to reduce the number of workers.

Until then, old-fashioned economists relied on old econometric models based on arbitrary estimates that are as reliable as yesterday’s weather forecast or last month’s epidemiological predictions. The card’s masterstroke was to leave the confines of its UCLA Berkeley campus to use a more natural area without resorting to esoteric models.

He co-authored a study on the effect of the minimum wage increase on New Jersey’s fast food joints, comparing them to neighboring Pennsylvania, where the hourly rate remained stable. When they measured the results, employment did not decline when wages rose, as people like Ford continue to insist.

Card’s findings were greeted with skepticism in the 1990s, but are now widely accepted by economists who have repeated that use in other jurisdictions. In 2003, more than 650 US economists highlighted his work, echoed in 2017 by 40 Canadian economists who signed an open letter warning against “intimidation that is not in line with the latest economic research”. .

Truth be told, Card’s empirical research is an inconvenient truth for Ford.

Upon taking power in mid-2018, the premier quickly canceled a set increase in the minimum wage to $15 an hour and imposed a freeze for the next two and a half years (he also cut two paid sick days). When the freeze ended, the rate increased by 25 cents to catch inflation last year, and by 10 cents this year.

In fact, employment continued to rise and the unemployment rate declined after the previous Liberal government raised the minimum wage from $11.40 to $14 an hour. That’s because higher wages can reduce turnover and increase productivity, as employers are finding amid today’s mid-pandemic labor shortage.

Still, Ford sticks to its own distinctive economic compass. Elaborating his vision in 2019, he “resolved to ring the warning bell that the risk of a carbon-tax slowdown is very real.”

It never happened – Ontario’s recession came from COVID-19, not carbon. But on Friday, Ford was back in its imaginary economy.

“The carbon tax is the worst tax ever on the back of the Canadian people,” he told reporters. “I’m a strong believer in a different principle — put money back in people’s pockets. They’re going to be able to go out there and, you know, buy a refrigerator, renovate, go to dinner, and so on. That’s what drives the economy.”

Forgetting for a moment its intentional distortion of the federal carbon levy – completely exempted to motorists, not upheld by the government – ​​Ford’s view on “what stimulates the economy” may have been unintentionally instructive. Putting higher wages “back in people’s pockets” is exactly what increases the minimum wage for all boat-lifting.

Ford has long lost the battle over the carbon levy, but it’s not too late to wake up to wage rates. With a provincial election next year, the premier could restore the minimum wage trajectory he so hastily reversed (and eliminate permanent paid sick days).

Better late than ever, the premier can call on the professor for congratulations – and conversation. He still has time to learn a lesson from this “elite economist”.

The card may point him to Americans – not just on the coasts, but in conservative states and the Union – who have adopted minimum wages of US$15 and above. This works out to over $18.55 in Canadian currency and over $20 in some jurisdictions.

Ford’s favorite claim is that Ontario is “open for business.” It’s time to open their minds to something that works for both business and workers – based on award-winning research, not political rhetoric.

Martin Reg Cohn is a Toronto-based columnist focusing on Ontario politics and international affairs for Granthshala. Follow him on Twitter: @reggcohn
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