By Ryan McGreal
Published March 23, 2009
Councilor Bob Bratina sent a letter to local media after the labour rally of Saturday, March 21 to express outrage over the lack of leadership from governments at all levels over the closure of the US Steel facility in Hamilton.
He wrote, "The 2,000 or so men, women and children who attended the rally had two dominant issues: how will they survive layoff, and how do they get their jobs back. Shallow declarations by politicians should anger these people."
He blasted what he called "the indifference of governments present and past" for allowing the steel industry to be taken over by foreign corporations, "with all of the unfortunate outcomes so easily predicted, and now coming true."He called on the federal government to "bring the ownership [of the steel industry] back into Canadian hands."
We can't let others tell us how much steel we're going to be making. We have the ore, the production facilities, the basic steel requirements to fill within our own Country.
He called the sale of the Stelco plate mill to an Indian company "corporate vandalism" and "a disgrace" and stated that our governments are not doing enough.
Our workers shouldn't have to hear how we're going to set up food banks for them. They should be hearing how we are going to fight to get their jobs back and their factory operating again.
He will ask Hamilton City Council to write to the federal government and "demand that steps be taken to ensure that no further erosion of the Canadian steel industry takes place", including a prohibition on the sale, removal or demolition of steelmaking assets and a requirement that work be contracted to Canadian production facilities rather than offshore facilities.
By gullchasedship (registered) - website | Posted March 23, 2009 at 16:05:17
Bratina should know better. Governments should stay out and let these industries recreate themselves to better suit the new realities. What have government handouts ever done for these industries except kept them uncompetitive, except when steel prices are at their highest?
By A Smith (anonymous) | Posted March 23, 2009 at 16:45:24
Bratina wants to rape investors (figuratively speaking) and then he wonders why Hamilton doesn't get more love from the business community. Here's a better idea, why not be nice to the people with the money? If the city allowed businesses to keep more of what they earn (by lowering property tax rates), they would have more incentive to invest here. Capital flows to where it can grow the fastest, so until Hamilton and people like Bob Bratina figure this out, this city will keep chasing investment dollars away. It's really quite simple, be nice to investors and they will be nice to you.
By Bobin (anonymous) | Posted March 23, 2009 at 16:46:24
Oh Bratman - when will you ever learn!
We should stick to fighting evil developers and dirty slumlords. Hamilton's grime-fighting duo together at last! Bratman and Bobin - ready to save the city. Bif - Bam - BOOM!
By Brandon (registered) | Posted March 23, 2009 at 19:09:14
I'm not sure about this. Many people argued that the Canadian banks were too limited by restrictive laws, that they weren't big enough to compete with the US and other international banks.
Yet today, it's those very laws that have turned the Canadian banks into the envy of the world.
What's wrong with requiring a minimum percentage of local ownership? Does US Steel give a damn about Hamilton and the effect shutting the plant down will have? I'm guessing no.
If the workers were more invested in the process, they'd be less likely to have an adversarial relationship with management and would be able to contribute to keeping the plant alive.
We've seen the results of unfettered capitalism on the financial markets, even the dimmest of us should realize that it may not be the best approach. But maybe I'm an optimist...
By jason (registered) | Posted March 23, 2009 at 20:22:00
.....and remember, some people are 'dimmer' than others.
By Balance (anonymous) | Posted March 23, 2009 at 20:37:12
Read comment's from Courtney Pratt in tomorrow's Spec. The sale to US Steel was a saviour. This is short term pain for long term gain. Their decision to idle Hamilton and Nanticoke (albeit Nanticoke is far better off) will ensure the company is here in 5, 10, 20 years from now. I appreciate all the concern for laid off workers but what can they really do? If no one is buying then how can they afford to keep paying wages and making steel to sit and rust? Brattina needs to get his head out of the sand, the world and economics is a little more complex then he thinks, he should stick to radio. When will we get people with minds to run for City Council?
By A Smith (anonymous) | Posted March 23, 2009 at 21:33:18
Brandon >> What's wrong with requiring a minimum percentage of local ownership?
What is good about it? Just because a business is owned by Canadian citizens, doesn't mean that a business will be profitable. No profits = no jobs. Lots of profits = much better chance of producing well paying jobs. Therefore, if Hamilton wants to give it's citizens great opportunities for work, it needs to increase the total amount of profits being made in the private sector.
>> Does US Steel give a damn about Hamilton and the effect shutting the plant down will have? I'm guessing no.
Let's see, the people of Hamilton pay 1.6% of their property value in taxes, commercial businesses pay 4.6% and industry pays 6.4%. Does the city (and the people) give a damn about the fact that business have to pay 3-4 times more in taxes, simply because they are a business? How is this fair? If you expect investors to care about the workers of Hamilton, perhaps the workers and the citizens of Hamilton should return the favour by lowering the business tax rate. Unless of course you believe that investors owe the people of Hamilton a living?
>> If the workers were more invested in the process, they'd be less likely to have an adversarial relationship with management and would be able to contribute to keeping the plant alive.
Exactly. If you can make it easier for business to make lots of profits, then it gives businesses a great reason to invest in the community. By working to make businesses as successful as possible, the citizens of Hamilton end up helping themselves over the long run. It's as simple as the Golden Rule, treat others as you want to be treated. It's simple and it works.
>> We've seen the results of unfettered capitalism on the financial markets, even the dimmest of us should realize that it may not be the best approach.
In a free market, you wouldn't have taxpayers funding trillion dollar bailouts. Instead, you would have banks fail and investors in those banks (the depositors) lose money. Furthermore, the banks that didn't make stupid decisions, would end up buying their assets on the cheap and there would be a massive transfer of wealth from the stupid to the smart. Moreover, the banks that made good decisions would be given a larger role in the economy and over time, the economy would benefit from their smarter investment decisions.
All regulation does is stop businesses from taking risk. However, by limiting failure, you also limit new discoveries. If you want to live in a safe world, where every business decision is signed off by a government employee, don't expect many great victories. In life, without some risk and pain, you simply will not be successful over the long term.
By grassroots are the way forward (registered) | Posted March 24, 2009 at 00:21:32
A Smith: Please explain how the people or should I say the workers have control over the business and property taxes imposed? Do the people or workers make policy or is it another entity that actually makes the policy that you should be blasting?
Anyways, look at this in this perspective, you are a capitalist, you have money to invest, but who is doing the work? Is it not the workers that you hire to produce the product? No workers, no profits, so to go along with your thinking there about treating others as you want ato be treated, I think it is very important to give recognition to the workers as well as to the capitalist side of things.
The rise of the labour movement was due to the fact that Mr Capitalist wasn't playing fair. I think you should be spending more time rethinking things in light of current events.
Is it not Mr Capitalist that has pushed for all these bailouts? Is it not Mr Capitalist that has influence the policy makers that have changed the very policies that you go on about?
By A Smith (anonymous) | Posted March 24, 2009 at 00:42:32
Ryan >> In a "free market", you would have a cascading collapse of financial institutions - including irresponsible and responsible firms alike - followed by a general collapse of the financial sector and then the economy as a whole.
This depends on how people reacted. If depositors realized that their money was actually locked up in the value of people's homes and businesses, they could simply choose to accept lower payments for a while, until such time that demand for homes picked up. It's only because people are led to believe that their money is actually stored as cash, that they have the expectation that they should be able to pull it out in full, whenever they want. Government backed deposit insurance helps foster this untruth.
>> Just look at what happened when the Fed allowed one company, Lehman Brothers, to go under - an instant dramatic credit squeeze and asset price collapse that vastly exceeded the size of the Lehman bankruptcy itself.
So what? A credit squeeze simply means that investors don't know who to lend money to. In an economy where there are transitions from one type of output to another (housing to something else), this takes time. However, if the government truly wanted to free up capital, it could cut its own spending, thereby increasing the capital available to businesses and individuals, thus making it easier for the private sector to make new investments.
Instead, Obama feels it necessary to be in "control" of where taxpayers money should flow, in particular to bad companies like AIG and other banks that screwed up. Take limited capital, give it to the banks that messed up, thereby reducing the capital that can flow to smart banks and businesses that didn't. Makes a lot of sense.
>> The current crisis is extensively due to the overexposure of an unregulated "shadow" banking system that borrowed and lent at high risk in complex and heavily leveraged arrangements of mortgage backed securities,
Yes, many banks made highly leveraged investments, so they should fail.
>> The crisis is a cascading spillout from what amounts to a stream of panics and 'bank runs'
Panic comes from a lack of knowledge. If the government told the truth about what banks really are, this would soothe many people's fears.
>> your prescription - big surprise, tax cuts - will do little to stimulate the economy since most of the money goes into low-risk savings rather than investments or spending.
The economy doesn't need stimulating. In fact, stimulating demand in an economy that isn't increasing real output simply leads people further into debt (paying for Chinese imports by borrowing from the Chinese people) and/or higher inflation. If you actually want to help the economy, you need to increase output and one way to do this is to increase the amount of work being done. This could be done by inviting back the people that left when the government started cracking down beginning in mid 2006. Alternatively, you could drop the minimum wage, thus making it easier for businesses to hire workers. With more workers, real output would increase, profit margins would increase and businesses would have money for new investments.
>> You're basically trying to push a piece of string from the supply side when you should be tugging on it from the demand side.
Demand is infinite, it doesn't need stimulating. Personally, I would be more than willing to buy 100 homes if the government gave me the money to do so, but this would mean that other people would have less money. If the goal is to take Chinese money, this eventually has to be paid back, so you are simply borrowing from future consumption. The only true way to increase economic output is to either bring in more workers, or increase productivity.
Increasing productivity requires access to savings, but it also requires good ideas. The government can take taxpayers money and give it to banks, but they can't give them insight as to where to invest to come up with these new ideas. This requires private sector expertise. If the government would just stop trying to force economic growth and let investors sort out the good ideas form the bad, the economy would re-balance itself automatically.
Furthermore, if you think that the Great Depression was caused by the free market, here is a 1932 quote from Herbert Hoover that dispels this idea...
"We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action…. No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times…. For the first time in the history of depression, dividends, profits, and the cost of living, have been reduced before wages have suffered…. They were maintained until the cost of living had decreased and the profits had practically vanished. They are now the highest real wages in the world.
Creating new jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has done more for … "the common run of men and women." Some of the reactionary economists urged that we should allow the liquidation to take its course until we had found bottom…. We determined that we would not follow the advice of the bitter-end liquidationists and see the whole body of debtors of the United States brought to bankruptcy and the savings of our people brought to destruction."
There you have it, so much for the free market. Hoover fought to help the "common man and women", to the extent of driving business profits to zero. The result was a massive reduction in private sector investment and a lot of pain for the very people he was trying to help.
By A Smith (anonymous) | Posted March 24, 2009 at 00:54:20
Grassroots >> Please explain how the people or should I say the workers have control over the business and property taxes imposed?
If the voters told their councillors to cut business property tax rates, I'm sure they would listen. If not, then we live in a dictatorship.
>> No workers, no profits, so to go along with your thinking there about treating others as you want ato be treated, I think it is very important to give recognition to the workers as well as to the capitalist side of things.
You're right. If companies treat their employees poorly, then they will lose them to those who treat them with respect. Respect on both sides is required for a positive relationship.
>> Is it not Mr Capitalist that has pushed for all these bailouts? Is it not Mr Capitalist that has influence the policy makers that have changed the very policies that you go on about?
Right again. So if you're a small business with a good track record, you are suffering from a shortage of capital because the government is giving it to AIG and the banks that made bad investment decisions. Once again, in trying to help the economy, the government is actually causing more problems than it solves. Capital doesn't grow on trees, so when government gives it to people who waste it, it hurts everyone else.
By omro (registered) | Posted March 24, 2009 at 05:23:46
Going back on topic.
In his blog, Mr Bratina references the speech of Rolf Gerstenberger without using quotation marks. How many of the comments which are being attributed to Mr Bratina are actually him paraphrasing the words of Mr Gerstenberger and thus representing the people from the rally as politicians should? The fact that they share opinions isn't relevant, it's the duly of elected officials to take note of and comment on what the people want and in that rally Mr Gerstenberger was stating what the people want.
Canada will need steel for current and future projects. It would be interesting to see where that demand for steel is being met from. Is this demand being met domestically or from foreign sources? If the latter, then the goverment should step in to protect it's own workers and industries. That doesn't mean that they have to stop buying foreign steel, just that they have to put their own people first and reduce the flow of money out of the country.
By A Smith (anonymous) | Posted March 24, 2009 at 05:31:31
Ryan >> Wrong. Given the amount of money leveraged into high-risk subprime mortgages that ultimately defaulted, a lot of the money is simply *gone*.
For every winner there is a loser. The people who bought these pieces of paper (CDO's) have simply transferred wealth to those who sold them.
>> You see, investment requires trust, and trust requires oversight. Without oversight investors are afraid to commit their money. Without investment, the economy sputters and slides into recession.
As this housing bubble shows us, investment only really requires greed. It's the reason why people convinced themselves that it was alright for the Nasdaq to go from 1000 to 5000 in four years and also explains tulip mania. When people believe that they can make money, they will invest.
>> What financial regulation does is establish oversight and prevent panics and runs
Bank runs represent failure and are a useful tool to limit the amount of capital that is wasted by bad investors.
>> I doubt there's an investor anywhere on earth who rolls in CDOs and credit default swaps and believes that their money sits in a vault somewhere when they deposit it.
So why do you care then? If these people were sophisticated investors, then let them eat their losses.
>> People with money are sitting on it because they're afraid to invest it. The appropriate government response is to stimulate spending through public investment - preferably in public infrastructure that will pay long-term dividends in higher productivity
The appropriate government response is to let private investors figure out how to invest their own money. Government has no unique insight into what investments produce the highest returns on equity, if they did, they wouldn't work for the government.
Furthermore, any capital the government invests today, takes away from future private investments. The U.S. currently borrows 1.6% of it's GNI. In 1991, during a recession, it saved 4.1% of it's GNI, while in 1998, it saved 6.5% of GNI. In the fifties and sixties, it saved over 10% of GNI. If there is a correlation at all between savings and growth, it is that that a higher savings rate is more favourable..."tinyurl.com/cdk65e".
>> responsible financial institutions suffer when people lose confidence in the banking system.
Then they should change their business model to account for this. Become a bank that charges people to store cash in liquid form, but also offer them longer term investments in which they are paid for the use of their money.
>> Demand is what people want to buy with their money. During a financial crisis, people save money rather than spending it. If you cut taxes, they'll just save more of it.
Savings are good, they act as a pool of capital to draw from for future investments. Since good ideas take time to come to fruition, spending all of people's savings today means that truly good ideas won't have the resources they need tomorrow.
>> Stimulating demand through countercyclical spending *does* bring in more workers, specifically those workers being laid off by the private sector.
Paying workers to do unproducitve tasks destroys capital. An extreme example would be to pay people for digging a hole and filling it back up. You're better off just giving people cash to spend at local businesses. At least that way, the businesses that deliver the most value to people will get the most resources to reinvest in new tools and equipment. This still is borrowing form future consumption, but at least it's not as bad as investing in projects that are based on politics rather than the bottom line.
>> Instead of increasing spending, he cut taxes (particularly the top marginal rates), which drove the government deep into recession without spurring demand (since the wealthy beneficiaries of the tax cuts put them into savings
Under Hoover, federal spending went from 2.6B in 1929 to 4.1B in 1931, an increase of 57%. During this same period, GDP fell from 103.6B to 76.5B, a decrease of 26%. Therefore, in percentage terms, federal spending in 1929 accounted for 2.51% of GDP, however, by 1931 it was up to 5.36%. This means that federal spending doubled in two short years. Also, just to be accurate, Hoover didn't cut tax rates, they were dropped to 25% in 1925, under Calvin Coolidge.
Furthermore, under Hoover, net saving as a percentage of gross national income went from 9.6% in 1929 to -7.2% in 1932. If the rich people were saving their money, it didn't show up in the numbers. In fact, this correlation between a reduction in savings (as a percentage of gross national income) and the collapse in GDP, is evidence that Obama should start accumulating a huge surplus and not run a deficit as all the "experts" suggest.
By zookeeper (registered) | Posted March 24, 2009 at 08:12:51
C'mon people, what have I been saying about feeding the troll?
When you feed the troll, however well-intentioned, this causes them to reproduce with much more fecundity than the natural state of affairs. As a result we end up with far more trolls than the environment can naturally sustain, which strains the environment and crowds out other indigenous species.
Please, people, I beg you: Stop. Feeding. The. Trolls.
By paul astere (anonymous) | Posted March 24, 2009 at 09:46:08
A Smith-- the International Monetary Fund (IMF) has long believed like you that what struggling economies need is austerity, discipline and liberalization. Even the IMF's own economists are finally admitting that their austerity measures are a failure and lead to deeper recessions, slower recoveries and lots of needless suffering. So I wonder, do you _enjoy_ seeing people suffer? You sure seem to enjoy punishing people for their perceived sins.
By seancb (registered) - website | Posted March 24, 2009 at 11:16:58
Give it up Smith... At the rate that you continually spew this junk up, I can't believe you haven't starved to death. It's time to sit down and digest for a while.
Ryan, we need comment threading and voting asap!
By A Smith (anonymous) | Posted March 24, 2009 at 16:30:19
Ryan >> Trillions of dollars have simply disappeared - from both 'careless' and prudent investors, not to mention millions of lost jobs and disappeared retirement savings.
If you bought a home, or lent money to someone to buy a home from 2002 onward, then you have lost wealth. However, if you were smart and did not get involved in the bubble, you haven't lost anything. If you were sitting in cash and bonds, you are now able to buy stocks and other assets pretty cheap. Therefore, the pain that the bubble people are now feeling, is offset by the joy felt by the non bubble people.
As for the job losses, I told you before that when government increases spending it hurts the economy. Case in point, from 4th qtr 2007 to 4th qtr 2008, government spending has risen 11.4%, while the economy has grown 1.2%. Government has spent 10x faster than what the economy has produced in output. The result is a crowding out of the private sector, which leads to job losses.
>> Greed is not self-regulating and does not function as some kind of economic karma.
If government could help people understand that an asset bubble was forming, I suppose then that would be a good thing. However, why didn't the Democrats tell the American people that from 2002 onward? Even if Republican deregulation was causing too much investment in housing, I don't remember hearing the Democrats complaining about increasing levels of home ownership. If I am wrong, feel free to correct me.
>> When banks are allowed to mismanage money and fail, both the guilty and the innocent are hurt in equal measure.
If you regulate where people can invest their money, they will simply find ways around it. For example, there was nothing stopping a group of private individuals from starting a limited partnership that only financed mortgages. It could have pooled billions of dollars from individuals all around the world and financed the housing boom instead of the banks. If you truly want to stop bubbles, which is another term for over allocation of capital in one area of the economy, it's better to appeal to people's sense of caution. If the government had thrown up a chart like this one... ( static.seekingalpha.com/uploads/2008/8/3/saupload_jq3.jpg ) , it would have done more good than any banking regulation.
>> The appropriate government response, when the private economy has lost confidence in the financial system, is to increase liquidity
In other words, people's desire to save money after they have suffered great losses is irrational and so the government needs to take their savings and spend them further into debt. Where is the evidence that suggests that decreasing savings in favour of consumption is good for increasing output? Here is a link that shows the complete opposite...tinyurl.com/cdk65e
As you can clearly see, decreasing the amount of savings as a percentage gross national income hurts output, it doesn't help it. If the Obama wanted to increase the savings, he could keep taxes where they are and simply cut spending. Problem solved.
>> If there's not enough money in circulation to allow people to spend and invest, the answer is to put more money into circulation. This very policy in one form or another has been responsible for ending every single recession during the postwar period.
People have money, but they don't want to spend it, they're saving it. That's why Obama is frustrated, because the people aren't doing what he is telling them to do. As time marches on, people will get tired of saving and they will automatically feel more confident about spending. It just takes time.
>> I have no idea where you're getting your numbers.
tinyurl.com/czdw74 tinyurl.com/dz4xtm tinyurl.com/dlymef
>> Every economist from Milton Friedman to the left argues that Hoover's failure to increase lidquidity and inject countercyclical spending is precisely what allowed the 1929 crash to cascade into the Great Depression.
>> In 1929, before the crash, Hoover cut the top marginal tax rate from 73 percent to 24 percent. Again, not sure where you're getting your information,
>> There you go again. Correlation != causality. Please, do yourself a favour and learn some actual economics - not this voodoo economic karma you keep peddling, but actual, empirical, evidence based analysis of how real economic systems work in practice.
I have shown a clear link between decreasing savings as a percentage of GNI and a reduction in real output. You have only provided unsubstantiated claims and appeals to authority. Show me some numbers and stop dropping names. Otherwise you argument in favour of big government is nothing more than folk wisdom.
By A-Idiot (registered) - website | Posted March 24, 2009 at 22:25:09
By A-Idiot (registered) - website | Posted March 25, 2009 at 10:29:59
bleat bleat bleat bleeeaaahhhhggghhhht http://www.youtube.com/watch?v=SbRnQRILH...
By Steel (anonymous) | Posted March 25, 2009 at 11:50:24
Soooooooo, getting back to Councilor Bratina's point.....
What do people think about it? SHOULD politicians play a bigger role in protecting the steel industry? Will protectionism in the name of saving jobs just make the economy even worse (at least that's a reference to the Great Depression which seems to fit here)? Is public infrastructure spending with CanCon rules enough to provide fresh demand for US Steel Hamilton and get the plant back up and running?
It seems this "LRT made in Hamilton" idea would be a great way of pulling off a win-win-win-win for Hamilton - direct jobs making LRT systems, multiplier spinoff jobs for suppliers (including steel), more property tax for the city, and great marketing PR for taking the lead on light rail.
What do people think?
By UrbanRenaissance (registered) | Posted March 25, 2009 at 12:13:55
Steel, I think you are absolutely correct. Attracting LRT systems manufacturers to this city should be one of council's top priorities for exactly the reasons you state above.
By UrbanRenaissance (registered) | Posted March 25, 2009 at 13:35:26
Nicholas Kevlahan's draft proposal makes a very good case to the city for bringing the LRT industry to Hamilton. It really strikes me as something that so obviously benefits the city as a whole and it boggles my mind why we aren't already moving on this.
By A Smith (anonymous) | Posted March 25, 2009 at 15:09:38
Steel >> SHOULD politicians play a bigger role in protecting the steel industry?
The best thing Hamilton politicians can do if they want to help the steel industry, or any business, is to cut their property tax rate. In Hamilton, industry currently pays 6.44% and commercial properties pay 4.57%. In comparison, the next highest industrial tax rate in the GTA is Oshawa at 5.2%. The rest of the GTA industrial tax rates range from 2.69% to 4.52%. For commercial tax rates in the GTA, they range from 2.25% to 4.1%.
If we're trying to help businesses, how does charging them the highest tax rates in the GTA help? Businesses, including the steel industry, need profits in order to invest in new equipment, so by limiting their profits, the city is ensuring that they become less productive then their foreign competitors.
If Hamilton politicians made our tax rates the lowest in the GTA (capped at 1%), we would be the most attractive place (by a wide margin) for business to locate. Just like people like to shop at stores (like Walmart) that give them the best deal, we need to give businesses the best deal. If we became the Walmart of cities, we could soon become the the most profitable city in the country
and also have the highest tax revenues for government to spend.
Therefore, the message to Hamilton politicians is to be nice and let the private sector keep more of their money. If they can reduce their greed, they will be rewarded with more investment and tax revenues than they can currently imagine.
By Steel (anonymous) | Posted March 25, 2009 at 15:14:32
^^ Eff off A Broken Record Smith. I wasn't talking to you when I posted my questions.
By A Smith (anonymous) | Posted March 25, 2009 at 15:41:55
Steel, Whether you were addressing me or not is irrelevant, you are ignorant and you need to be shown the truth. Drop the misguided anger and start using your brain, then you will realize that Hamilton politicians are the very people who have turned Hamilton into what it is today, a city that scares away businesses.
When Hamilton was attracting huge amounts of investment earlier this century, tax rates and government spending were a fraction of what they are today. Therefore, our own history shows us that if you want a strong private sector that produces lots of jobs, you need to shrink government.
Are you that stupid to think that by punishing the very people you need (private investment), you will make them want to invest in the community? Yes or No?
By UrbanRenaissance (registered) | Posted March 25, 2009 at 15:49:04
No need for anger Steel, the law of averages just caught up with A Smith and he made his usual point in a discussion where it actually applies. Decreasing the tax rates for businesses is an easy way to encourage industry to come to Hamilton. It wouldn't have to be an across the board, permanent property tax cut necessarily, it could be a short term tax rebate for desirable industries, or for any company who meets certain criteria (i.e. taking over and refurbishing brownfield lands or currently neglected and vacant buildings or meeting certain environmental standards). Lowering tax rates is the main weapon in the city's arsenal for attracting new industry and it along with the others (like our proximity to the border, airports, highways and one of the best deep water sea ports on Lake Ontario) should be exploited as best we can if we're going to bring new businesses to this city.
By Steel (anonymous) | Posted March 25, 2009 at 15:51:28
Angry? Don't confuse me with someone who cares. I don't need to be shown the truth, you need to be shown the door. Your sad sack has been beatdown again and again by everyone and anyone who could ever be bothered to take the time and poke the holes in your broken record bullcrap but you keep coming back for more, maybe you like the abuse. Go learn something more than tax-rates-tax-rates-tax-rates-tax-rates, there's a whole world out there it'll do you good to get some fresh air.
By Steel (anonymous) | Posted March 25, 2009 at 15:54:36
@UrbanRenaissance, we -already- do all those things, this city's crawling with business tax breaks, brownfield incentives, cheap downtown loans and overall taxes that are lower than other GTA cities pay but none of that matters to our mister broken record.
By Mike B (anonymous) | Posted March 25, 2009 at 15:55:03
Though I stopped reading most of A. Smith's misguided and tiresome novel a while back, he does have one very good point:
"If Hamilton politicians made our tax rates the lowest in the GTA (capped at 1%), we would be the most attractive place (by a wide margin) for business to locate."
I think it's hard to argue that Hamilton's relatively higher tax rates are a "positive" or selling-point for the city. What Hamilton does have going for it (proximity to Toronto and other urban centres in Southern Ontario) can cut both ways: It's just as easy to pick up and leave, especially when there is very little financial incentive for businesses (and residents in some cases) to stay here. I love this city and all, but it's not like the level of services that residents receive for their taxes is superior to other nearby municipalities, and it doesn't yet have the social dynamism of Toronto that might attract those who are willing to pay a tax premium.
That's not to say that, though, that lowering taxes will help anything: there's no guarantees that these revenues could be made up through other means, and impoverishing the city in the hopes of attracting business to the area during a recession is a rather large risk.
By UrbanRenaissance (registered) | Posted March 25, 2009 at 16:06:38
Steel, I was not intending to defend A Smith, I was merely pointing out (like Mike B above) that even a broken clock is right twice a day. And that lowering tax rates in a responsible manor would be a good way to attract business.
By Steel (anonymous) | Posted March 25, 2009 at 16:24:44
@Mike B - Across the GTA property tax rates are negatively correlated with property values so that most cities end up charging about the same amount for a similar house and hence bring in around the same property tax dollars per person. A Smith thinks this proves that lower tax rates CAUSE higher property values. People who know how to think recognize that property values get steadily higher the closer you get to downtown Toronto, so the real situation is that closeness to downtown Toronto is what causes higher property values and cities just charge whatever rate will earn them enough money to run a city.
@UrbanRenaissance - Hamilton already did what mister broken record wants and it didn't do much aside from shift more tax burden onto residences. What Hamilton needs is not more bottom feeding companies attracted by low taxes but something to differentiate us from both downtown Toronto and from the surrounding areas that can sell closeness to downtown Toronto. So far we haven't figured out what that something is and bleeding ourselves dry in the meantime is no substitute.
By Mike B (anonymous) | Posted March 25, 2009 at 16:51:30
Yes, I understand what you're saying, especially in regards to residential taxation, but we're talking about commercial and/or industrial properties. In these cases you also have business taxes and development charges and engineering fees etc. Toronto has the lowest development chargest in the GTA, for example, and almost no charges whatsoever for industrial development.
By UrbanRenaissance (registered) | Posted March 25, 2009 at 17:30:55
Steel said "What Hamilton needs is not more bottom feeding companies attracted by low taxes..."
Which is exactly why I said we wouldn't necessarily have to have a blanket drop on all business taxes, but rather a system of targeted tax rebates which could be given to only those companies which meet specific criteria. Short term rebates which would only be present for the first few years of a company's existence to help it get started, and ones that would hopefully need to be re checked each year to ensure compliance.
By A Smith (anonymous) | Posted March 25, 2009 at 18:23:25
Steel >> People who know how to think recognize that property values get steadily higher the closer you get to downtown Toronto, so the real situation is that closeness to downtown Toronto is what causes higher property values and cities just charge whatever rate will earn them enough money to run a city.
Barrie, Ontario is 67 minutes in driving time away from Toronto, here are their tax rates (2008)...Residential - 1.36%, Commercial - 3.32%, Industrial - 3.3%.
Collingwood, Ontario is 110 minutes from Toronto and they charge R-1.28%, C-2.86%, I-4.02%.
Burlington, our next door neighbour. is 42 minutes away from Toronto and their rates are R - 1.07% C - 2.55%, I - 3.82%.
Hamilton, which is 49 minutes away from Toronto, has these rates, R -1.65%, C - 4.57%, I - 6.44%.
If distance from Toronto is the determining factor in determining tax rates, then why doesn't this theory apply to Collingwood or Barrie. Furthermore, does an additional 7 minutes of driving time really explain why Hamilton's residential tax rate is 54% higher than Burlington's, , or why our industrial rate is 69% higher., or even better, why our commercial tax rate is 79% higher?
Perhaps there is a point at which tax rates become too low, but seeing that Hamilton currently has the highest tax rates around, we have a long way to go before that happens. Even at first, if we just brought our rates close to Burlington levels, I can't imagine why the city would have a problem managing it's budget. Something like R - 1.15%, C - 2.82%, I - 4.15%. All rates would still be higher than Burlington, to account for the "closeness factor" (assuming it even exists), but not unreasonably higher.
By seancb (registered) - website | Posted March 25, 2009 at 18:45:35
"You're like one of those Chatty Cathy dolls except I'm not pulling the string, you are. Blah! Blah! Blah!" -Neal Page
By Taxes (anonymous) | Posted March 25, 2009 at 19:19:26
Location to Toronto is not the only determining factor of property values. It makes no sense to simply look at tax rates. Because the tax rate is multiplied by the assessed value of the property. In order to do a proper comparison you need to compare the assessed value of the same type of building, multiplied by the tax rate to determine the property taxes paid in each municipality. Taxes paid within a municipality vary as well. Look at the taxes a 2000 square foot home in Ancaster would pay compared to the exact same house on the exact same sized lot in the old City of Hamilton. I've done it and it is amazing how much more an Ancaster homeowner would pay for arguable less services.
A Smith, you need to compare apples to apples and look at the whole picture not just a portion of it.
By JonC (registered) | Posted March 25, 2009 at 23:23:42
This was my favourite quote yet "you are ignorant and you need to be shown the truth"
Of course, once again, I will remind everyone that taxes are paid in dollars and not percentages.
By A Smith (anonymous) | Posted March 25, 2009 at 23:56:21
Seancb, if Hamilton was a roaring success, then you would have justification in supporting a government that takes about 50% more of people's assets than surrounding communities. However, Hamilton is not a success, it's falling apart, save for the recent commercial developments that have sprung up since commercial tax rates were reduced.
Instead of attacking me personally, why not be open to the possibility that what Ryan talks about may be true, namely that incentives affect people's behaviour. Ryan makes an excellent point when he talks about subsidized roads promoting suburban development and higher transit subsidies promoting increased transit ridership. Therefore, if the city wants to attract more property investment, the city needs to lower the rate at which it taxes this investment.
Most great cities in the world have strong private sectors, Hamilton does not. Hamilton has chosen the way of big government, high tax rates and the result has been a steady decline in our prosperity relative to surrounding communities. There's no reason why the city couldn't reduce spending to population growth plus inflation, thus allowing the real per capita GDP growth filter directly to the people who produce it. If this happened for a decade or so, there would be a massive transfer of spending power from elected officials and city employees, to the average person and business owner.
Each person would still get the city services they do today, since government spending would be adjusted for inflation, but any new programs or grand ideas would be left up to the people and not the politicians. Instead of a Red Hill Expressway or a new stadium, there would greater spending on home renovations, or at local stores and restaurants. By cutting tax rates, you would be handing the power back to the people who earn the money and taking it away from the people who don't. Less central planning and more free enterprise.
Even former communist China, Russia and Eastern Europe have discovered that low tax rates and less government spending helps grow the economy and increase investment. Furthermore, many countries in Europe also understand the positive effects of lowering taxes on investment, for example...Sweden has a corporate tax of 25% on profits, Denmark 25%, Netherlands 25.5%, Norway 28%, Finland 26%. They all understand that incentives matter and that you can't expect to get something for nothing.
As soon as the City of Hamilton allows people and businesses to keep a HIGHER PERCENTAGE OF THEIR NET WORTH, you will see a stop to the exodus of investment this city has experienced over the last few decades.
By seancb (registered) - website | Posted March 26, 2009 at 09:30:41
Smith, I have intelligently responded to you many times over, and have not personally attacked you. Yet you still smash us in the face with your one-note orchestra. None of us have the time or energy to bother with you anymore since it's clear you do not think about what we write in our responses. Your knee-jerk canned answers are so old now that they appear to be going supernova.
I wasn't attacking you personally, I was just posting a movie quote that popped into my head for some unknown reason.
By A Smith (anonymous) | Posted March 26, 2009 at 10:46:40
Seancb, I don't want to smash anybody in the face, I just want people to stop looking to government to fix Hamilton's economic malaise. Government is not good at producing wealth, since it has no way of knowing the true value of the goods and services it provides. Without this knowledge, it can't know whether or not an investment has increased wealth, or destroyed wealth. There is simply no accurate feedback.
By lowering tax rates, you limit the amount of these economic black holes, thus increasing the proportion of investments that actually do produce value for society. Therefore, unless you first understand the necessity of having accurate feedback with regards to the allocation of capital, the city's local economy will continue to be filled with high hopes and nothing more.
Information is power, so by failing to use the feedback given to us by the role of prices, we are actually gambling more than we are planning.
Developing lots of ideas on how government should help the economy misses this point entirely. Therefore, instead of looking at how many ideas we can produce, we should focus on the right ideas, namely increasing the number of informed investment decisions. The only way to do that is to let the free market allocate capital.
Power to the people!!! :)
By seancb (registered) - website | Posted March 26, 2009 at 11:27:55
You just did it again... "I don't want to smash anybody in the face..." followed directly by a paragraph starting with "By lowering tax rates..." Are you even listening to us OR yourself?
WE GET IT. WE UNDERSTAND YOUR POINT. Your ONLY point. Your single, solitary point. You can stop telling us. Because we get it.
I have said it before. If you want to talk about lower tax rates and your related ideas, write a coherent, researched article and let the comments fly -on topic- underneath it. But for the love of mercy, please stop hijacking every single flipping thread with your same-old.
By A Smith (anonymous) | Posted March 26, 2009 at 15:40:58
Seancb, as soon as I hear more people talking about turning Hamilton into a hotbed for investment, then my job here will be done. As it stands today, all I read are articles and comments that promote the idea that wealth is created by politicians, rather than the real heroes, the private sector business owners and employees.
In fact, I believe that the views held by yourself and others are keeping this city poor and I don't like it. Furthermore, if I did what you wanted, to stop "hijacking" threads about big government, it would make it easier for you to spread your poverty producing ideas. So, while I appreciate your offer, until you and others come over to the dark side, I will keep making your time here uncomfortable.
By JonC (registered) | Posted March 26, 2009 at 18:01:52
not uncomfortable, annoying.
By seancb (registered) - website | Posted March 26, 2009 at 18:24:08
You have ONE idea for "turning Hamilton into a hotbed for investment". And we all get it.
Why don't you step back for a bit and actually absorb the articles on this site. They are all about making Hamilton a better place to live, and most are about how to encourage good development and curb bad development as well as reducing wasteful spending.
Nobody on here is talking about increasing government handouts and raising taxes. Everyone (except you) is talking about reconfiguring current spending so that it creates wealth instead of destroying it.
Do you understand that many positions held by authors on RTH actually align with yours? Removing arcane bylaw restrictions, not wasting taxpayer dollars in frivolous ways or on dead end projects, etcetera.
The difference between you and most authors and commentators is that no matter how badly we all want lower taxes and less 'meddling', you can't seem to understand the reality that no matter how many times you yell about lower taxes, it isn't going to happen overnight - not to mention the fact that it is a large puzzle with many pieces and no silver bullet answer, which you clearly do not understand.
Jon C is right - you aren't making anyone uncomfortable. You are an annoyance at worst, and at best you are forcing others to articulate arguments against you that are actually based on fact, and with each post you bring another response from another person, resulting in embarrassment no one but yourself.
Cue the response about lower taxes being the only answer
By omro (registered) | Posted March 26, 2009 at 19:03:56
I've only recently started posting here, before now I've enjoyed the articles and blogs and posted thoughts within a different forum. I wasn't going to comment on this, but I'm feeling compelled.
The on topic comments being lost like this in amongst, what I can best describe as rants vs rants... I have to admit that I've totally given up reading either of them. I just scroll down to the next comment, skim to see if it's vaguely on topic, if not skip again, and that's a shame. I might easily have missed a relevant, on topic, point within some rant.
Also the constant hi-jacking of a thread will totally discourage people from posting something that is on topic, because they will think "what's the point? It's only going to get hi-jacked." And it might even discourage some RTH readers from even bothering to read any of the comments anymore, as they aren't on topic.
I second the suggestion that 'A Smith' writes an article for Raise the Hammer, entitled "How Lowering Taxes Will Raise The Hammer". In this article s/he can bring together all the various arguments from all the other comment threads in which s/he has commented. That way the argument can be singular, coherent and not disjointed because it's spread randomly throughout various other threads.
If you focus on, in one place, a well thought out, structured argument, showing all your numbers. Even write some scenarios to illustrate how the "lower tax way" will work better than the current system. Then, accept constructive critiques of your article and write constructive counter arguments.
I for one would read such an article with interest. However, all of these arguments and counter arguments in other threads... well...
Please. I am interested in your point of view on the relevant topic. Others probably are too. You made a very valid and interesting point about immigrants in another thread, which I read before I started scrolling through your posts whenever I see your name.
So, take mine and other people's advice. Contact RTH and write an article and please, from this point on, only respond to the topic at hand, as much as is possible. I myself have a tendency to go off on tangents when something makes me think of something else, but hopefully not always on the same tangent! :-P
Also, this is my tangent, think how much time and energy you're expending every single day on this same topic. You've probably lost hours of your life writing about something that most people are scrolling through. It's a waste. You'd be better off emailing your councillor rather than posting on here about taxation within every unrelated thread.
Write an article for here. Send a letter to the Spec. Set up your own site on taxaton in Hamilton. Start an interest group of concerned citizens who want to see the taxation rates changes, who can lobby City Hall. All of the above.
I am actually interested in the topic of this particular article, "Bratina: Politicians Must Do More for Steel Industry", I even wrote a response to it earlier and it was totally lost in this overwhelming mass of posts on taxation. :-( As have been other people's.
End of my "rant". :-)
By Z Jones (registered) | Posted March 26, 2009 at 19:19:29
"I believe that the views held by yourself and others are keeping this city poor"
Joke's on you A Smith, Seancb is actually an entrepreneur who has invested in a new business downtown and is active in the economic and cultural resurgence on James North.
What have you done for the city ... other than play your broken record ad nauseum?
By A Smith (anonymous) | Posted March 27, 2009 at 00:45:06
Seancb >> Nobody on here is talking about increasing government handouts and raising taxes. Everyone (except you) is talking about reconfiguring current spending so that it creates wealth instead of destroying it.
I agree that no one has mentioned raising taxes, so I will try to keep my comments a little more varied to reduce argument fatigue. On that note, here is a random job profile I took off the city website, tell me if the salary seems a little high considering the educational background and job requirements...
CITY OF HAMILTON
PUBLIC WORKS DEPARTMENT
(OPERATIONS & MAINTENANCE DIVISION – FORESTRY & HORTICULTURE – LOCATION – GAGE PARK)
GARDENER II - CUPE 5167
(1 TEMPORARY FULL TIME POSITION)
SUMMARY OF DUTIES
Reports to Horticultural Supervisor. Carries out horticultural practices to maintain grounds and gardens.
Analyses, creates and implements the use of horticultural materials such as flowers, shrubs and sod.
Maintains flower beds and shrubs by weeding, pruning, fertilizing and watering.
Implements and maintains horticultural displays such as "Chrysanthemum" show.
Assesses, diagnoses and reports flower, shrub, soil and turf problems; implements corrective action such as pesticide and herbicide spray programmes.
Operates tools and equipment such as edger, sprayer, soil sterilizer, rototiller and tractor.
Receives and answers inquiries from the public.
Loads and unloads vehicle.
Performs preventative maintenance on tools and equipment.
Maintains inventory of materials used.
Recommends the use of materials such as flagstone, interlocking stone, timber and display boards; completes projects.
Performs minor maintenance on facility such as waterline repairs.
Communicates with contractors and other departments.
Works in accordance with the provisions of all applicable Health and Safety legislation and all City of Hamilton corporate and departmental policies and procedures related to Occupational Health and Safety.
Performs other duties as assigned which are directly related to the major responsibilities of the job.
1. Horticultural trade related training and work related experience in horticulture.
2. Technical knowledge required regarding plant materials. Must be capable of performing a particular trade and carrying out a variety of complex tasks. Requires the use of specialized skills.
3. Landscape Exterminator and Industrial Vegetation Pesticide Licence required. Please note that successful applicants who currently do not possess the Pesticide Licences must obtain it within the probationary period.
4. Must possess a valid Class "DZ" Driver’s Licence.
THIS POSITION REQUIRES A VALID CLASS “DZ” DRIVER’S LICENCE AND PROOF THEREOF IS REQUIRED AFTER HIRE.
Salary Grade F
$23.252 - $24.263 - $25.274 per hour
40 per week
...The taxpayers pay 50k a year so that someone without a university degree can water the plants. I'm not sure about you, but that seems a little generous for a gardener.
Furthermore, according to the 2009 budget, 49% of the city's budget is for employee related costs. Furthermore, this years increase in employee costs are 5% over 2008, accounting for 78% of all new spending over 2008. In contrast, according to the 2006 census, Hamilton median family income was $65,833. Therefore, if both parents of a family worked as a city gardener, they would earn 50% more than the median income of the people who pay their salaries.
If the city was forced to budget within a 1% tax rate cap (could be phased in over several years), this would simply mean that city employees would only get wage increases when property assessment went up. If assessment values went up quickly, then so could their wages. If they stagnated, then city wages would need to reflect this as well. To me that seems like a fair way of treating city employees and also the taxpayers of Hamilton.
If Burlington taxpayers can get away with only paying about 1% of their biggest asset in taxes, why shouldn't we have that same privilege? Allowing politicians the freedom to tax above this 1% figure makes it too easy for them to take advantage of the taxpayer and it decreases the wealth that homeowners could use to make improvements to their homes.
By grassroots are the way forward (registered) | Posted March 27, 2009 at 08:46:00
The current foodbank system is not feeding the people now and for the most part the food given out is rotten, expired, it does not take into fact nutritional needs or medical needs. You must provide proof that you are in need and if one does complain about the quality of food, you have to tolerate comments from the frontline staff that you should be thankful for the rotten food you get.
It is also curious that the people of Hamilton have not heard a word from the Exeuctive Director of Foodshare about the growing situation in this city. Why no words from this person, why does not this person stand in front of the media blasting the system? Or is it more about the job that person holds that is more important then actually feeding the people that struggle.
How come the foodbanks themselves have no posting of food regulations or inspections? How come people must stand in lines for hours in imclement weather? How come these buildings do not accomodate the disabled or strollers? Why no posting of a phone number where people can make complaints without fear of reprisal?
Foodbanks are not the answer, the people need jobs, they need to know that their pensions are safe. They need adequate amounts of EI, welfare, they need to get rid of Elect to Work and Workfare policies the deny those workers that struggle from being denied their rights under Employment Standards Act.
Power to the People
By Rimshot (anonymous) | Posted March 27, 2009 at 10:06:14
"a word from the Exeuctive Director of Foodshare about the growing situation"
(sorry, can't resist)
By Internet Police (anonymous) | Posted March 27, 2009 at 11:08:26
4chan is that way ----->
By BE (anonymous) | Posted March 27, 2009 at 14:36:19
I'm sorry, I can't let this go.
"...The taxpayers pay 50k a year so that someone without a university degree can water the plants. I'm not sure about you, but that seems a little generous for a gardener."
Do you even read the information that you post? You must have stopped at the Job title and ignored the laundry list of varied responsibilities this job entails.
1. Specific and experienced horticultural knowledge. And no, just because you have a backyard garden does not qualify you for this job.
2. Ability to create complex and pleasing displays. Much like a landscape architect... Average salary of a landscape architect you ask? $84000 per year.
3. Must make presentations to the public and interact with the public. That eliminates about 90% of the population right there.
4. Must maintain equipment, like lawn mowers and trimmers. So this person must also be a bit of a mechanic. I'll bet you don't begrudge the average mechanics salary of $50000.
5. Perform minor water pipeline repairs. Oh... and a small time plumber too. Average plumbers salary... $50 000
6. Licensed and experienced pesticide technician as well. Boy this pool of qualified people keeps getting smaller by the second.
7. Must have a DZ license... do you have a DZ license? I don't.
8. I would imagine that this job will require a certain amount of responsibility. You know, working alone, accomplishing tasks with little or no supervision. It's very hard to find reliable employees at $9/hr.
$50000 a year is too much? In my mind it should be just enough to find 2 or 3 qualified candidates. The other 200 that apply will be hoplessly unqualified. That would include you and me by the way.
By A Smith (anonymous) | Posted March 27, 2009 at 16:22:20
According to city documents, employee costs are 579M in Hamilton (2009). On the city website, it tells us that there are 9000 city employees. This means that the average earnings for a city employee is $64,000. According to the 2006 census, average FAMILY income (includes wages and other income) in Hamilton (2005) was 66,810. Therefore, if you are an average city employee you make in wages what an average (likely two earner) family makes from all sources of income.
The only conclusion I can draw from these numbers, is that city employees enjoy higher wages than the average Hamilton taxpayer.
If average city employee wages were brought down to the average Hamilton taxpayers wages, then this would free up additional income for taxpayers to spend on things that matter to them. It would also shrink the size of government and increase the amount of money that could be spent at local business and for private sector employees, like those who work at Stelco, etc.
Does anybody else think it's wrong for the city employees to earn more than the average Hamilton taxpayer?
By Z Jones (registered) | Posted March 27, 2009 at 16:31:56
The only conclusion I can draw is that you keep moving the goalposts when someone calls you out.
Gosh, an organization of professionals who we demand to be highly trained and competent make above average incomes in a city that has 20% poverty? Who could EVER have guessed?
If we do grind down their incomes like you suggest, what qualified people will still be willing to work for the city?
Do you actually think THROUGH any of your harebrained schemes?
By beancounter (registered) | Posted March 27, 2009 at 16:52:23
Would it be considered reactionary and undemocratic to have a limit, not only on the total number of comments on any one topic, but also on the number that can be posted by any one user? This is a fascinating topic but I can't really justify spending enough time to read through all the comments.
By JonC (registered) | Posted March 27, 2009 at 18:49:11
I like how the post that started off with "I agree that no one has mentioned raising taxes, so I will try to keep my comments a little more varied to reduce argument fatigue." rapidly turned into this "If the city was forced to budget within a 1% tax rate cap". Even when you try you fail, and horribly so, you even tossed in the standard Burlington reference. In the parlance of the internet.... FAIL
By A Smith (anonymous) | Posted March 27, 2009 at 19:35:28
Z Jones >> The only conclusion *I* can draw is that you keep moving the goalposts when someone calls you out.
Okay, here is a link describing what a landscape architect does, qualifications and salary...(tinyurl.com/dfhw7q). Which one of these jobs requires more time to learn? The one that requires the pesticide license... (www.ontariopesticide.com/optc/default.htm), DZ training... (www.moderntraining.com/index.asp?pid=38), or the one that requires four years of University?
Be >> 4. Must maintain equipment, like lawn mowers and trimmers. So this person must also be a bit of a mechanic. I'll bet you don't begrudge the average mechanics salary of $50000.
Wrong, this is what it actually says..."Performs preventative maintenance on tools and equipment." Preventative maintenance includes cleaning, oiling, etc, not full blown overhaul and repair. Nice try.
Be >> 2. Ability to create complex and pleasing displays.
The job description doesn't say that, you are making that up. They do mention complex tasks, but what does that mean? The fact that it doesn't list what these complex tasks are, probably means the skills required are pretty generic.
Be >> 3. Must make presentations to the public and interact with the public. That eliminates about 90% of the population right there.
If you work at Tim Horton's you interact with the public all day long. Door to door salespeople make presentations. Neither of them make 50K, more like 20K.
I could go on, but I've made my point.
Z Jones >> Gosh, an organization of professionals who we demand to be highly trained and competent make above average incomes in a city that has 20% poverty?
So you're saying that city employees are roughly twice as skilled, educated and productive then the rest of the people in Hamilton? I'm sure the taxpayers wouldn't agree with you.
How about this for a comparison, a school bus driver who works for a private contractor makes about $12/hour. If you are a bus driver for the city, you make over $20/hour. If you are a janitor for a private building owner, you make $10 -11/hour, if you work for the city, you make $17-18/hour. A city labourer under union contract makes about $20/hour, in the private sector, these jobs earn around $11/hour. A part time city employed cashier makes makes $20/hour, in the private sector, they average about $11-12/hour. A data entry operator in the private sector makes $10-11/hour, if you work for the city, you make about $22/hour. A city loading dock attendant makes $20/hour, only $10-12/hour in the free market.
Are you seeing a trend here? City employees, doing the same jobs as those in the private sector, get paid almost double the wages. If you are unwilling to accept theses facts, then you probably work for the city yourself.
If employee costs, that are currently around $580M, were even reduced by a third, from $580M to $389M, this would amount to a savings of $384/year for every resident of Hamilton. For a family of four, this would leave an additional $1,536 per year to spend on increasing the value of their home, shopping at local stores, dining out at restaurants, etc.
Instead, the relatively low income residents of Hamilton subsidize a small group of people, so that they can enjoy wages they would not be able to demand, if not for the power of taxation and the power of public unions. If you think that's fair, then your an as$@%$&.
By grassroots are the way forward (registered) | Posted March 27, 2009 at 22:40:17
A Smith: Yes those who are covered by union contract do have better wages, benefits and pensions. They are a collective, they have a stronger voice.
But with the "Common Sense Revolution", the Harris government changed the rules as to how workers can organize. The Harris government also implemented Elect to Work and Workfare policies as well and with the growth in the temp market, workers in not only the private sector but also the public sector who are temp workers are or have been denied their rights to stat holiday pay, overtime, there is no protection against workplace bullying and workers have been denied access to their Records of Employment which would enable them to access EI benefits. I could go on and on about the problems, I have not even touch on what one goes through once they apply for welfare.
Now we have almost 37% of workers today, who are denied to some of the most basic rights under employment standards and even if they file a claim it can take up to a year or more before the Ministry of Labour even looks at it, in the meantime, as a low income you could become homeless in a couple of months.
So if you are a temp worker who lost their assignment, then the temp company refuses to give you your Record of Employment and then you have to apply for welfare because you cannot find work, then one has to deal with an OW worker who put the onus on you the worker, not the company that has violated federal statues in regard to the issuance of a ROE. And if and when you get access to EI benefits, they just claw back the welfare you took off your EI cheque, which basically leaves you with nothing to live on.
Labour must step up to the plate to see that all workers have the same protection under the law. Lots of unemployed around the city, too bad there isn't enough jobs to go around.
By BE (anonymous) | Posted March 28, 2009 at 10:02:48
Thanks for the links A Smith and for proving my point.
Landscape architects may plan and design:
urban, regional and provincial parks.
They may be involved in:
programming for park and public projects and tourist developments
That job posting is for Gage Park, a large Urban park. That offers programs like The Chrysanthemum Show and Spring Tide. It also features large perenial gardens, several display gardens and is host to the City's green house facility that provides flowers and plants to all of the City's parks.
Of course, you would know these things if you had ever been to this park, or even been to the City of Hamilton... or I suspect, even been in the province of Ontario.
I will conceed that this job does does not require a full Landscape Architect but would be perfect for someone who's studying to be one or is a Landscape Architect Technologist. Average salary is $43900 with a range of $31000 - $85000 per year for a technologist.
Bottom line. This is what it costs to hire competent professional people. Sure the City could low ball all their jobs down to $12 - $15 but they're already losing their most qualified people to Burlington and Oakville as it is.
By A Smith (anonymous) | Posted March 28, 2009 at 13:54:49
BE >> Landscape architects may plan and design: urban, regional and provincial parks. That job posting is for Gage Park, a large Urban park.
But the job posting is NOT for a landscape architect, it's for a GARDENER. Landscape architects have to take years of specialized and expensive training, whereas the qualifications for the job listing required training of less than a thousand dollars and could be completed in as little as 19 days. Wages are set by supply and demand of people's skills, not where the job is located.
>> but would be perfect for someone who's studying to be one or is a Landscape Architect Technologist
But the job does not explicitly require a Landscape Architect Technologist diploma. If it did, then your argument for the high salary would carry more weight. It simply requires a couple of skills that take little time and money to acquire, which does not explain why the city has to pay 50K.
>> Bottom line. This is what it costs to hire competent professional people.
Did you look at the comparison of jobs in my last post? ...
"How about this for a comparison, a school bus driver who works for a private contractor makes about $12/hour. If you are a bus driver for the city, you make over $20/hour. If you are a janitor for a private building owner, you make $10 -11/hour, if you work for the city, you make $17-18/hour. A city labourer under union contract makes about $20/hour, in the private sector, these jobs earn around $11/hour. A part time city employed cashier makes makes $20/hour, in the private sector, they average about $11-12/hour. A data entry operator in the private sector makes $10-11/hour, if you work for the city, you make about $22/hour. A city loading dock attendant makes $20/hour, only $10-12/hour in the free market."
Explain these wage discrepancies?
By BE (anonymous) | Posted March 28, 2009 at 22:22:46
While I can't explain all of the wage differences and you certainly have a point on a few of the low skilled labour positions, let me float this example by you. Please correct me if this is not how hiring at the minimum wage level is done.
Cleaning and Maintenance company "A" advertises and hires for 5 janitorial/housekeeping positions. The pay is at minimum wage or just above it.
After 1 month of training and actual work one of the new hires simply stopped showing up for work after the first week. Another was fired at week 3, they couldn't hack it. One more is always late and phones in "sick" all the time, they will soon be canned in short order. One other person is a student and will not be around for much longer. The one last person turns out to be competent enough, reliable, always on time. They might last another six months until they find a job that pays more. Lather, rinse, repeat.
From what I understand, the previous example is fairly common when hiring at the minimum wage level. There is a lot of turnover.
It's also my understanding that when municipalities hire they're not looking to hire 5 or 6 gardeners or cashiers or data clerks. They usualy need to fill one position and they don't want to have to fill it again in a month or two.
This is why we as tax payers would be absolutley terrible employers. As a group, we don't put a value on competence and reliability and are therefore unwilling to pay for it.
By A Smith (anonymous) | Posted March 29, 2009 at 00:32:26
BE, higher wages likely do reduce turnover as you suggest and all things being equal, that would probably be okay. However, it just doesn't seem right that the average city employee should be earning 50-80% more than the average taxpayer. Especially when the residents of Hamilton are taxed at much higher levels relative to their net worth than other communities, such as Burlington.
Is it wrong to want to enjoy the same level of taxation relative to our net worth as other communities? If the taxpayers of Hamilton are paid less than other communities, why shouldn't the people who work for us, also be paid less?
My main argument is to try and reduce the taxes we pay relative to property values, because property values represent wealth. If we could pay a smaller percentage of our net worth in taxes, this would leave more money to spend on other things, like fixing up our homes. Some people have argued that doing so, would mean cutting essential city services and therefore, there is no choice but to continue paying high tax rates.
I have presented the city wage scales to show people that this isn't really the case. That most of the taxes we pay go towards people's salaries and if the city employees wanted to be nice and help reduce the tax on our net wealth, they could. To me it comes down to fairness, city employees are the highest paid workers in this city and this just doesn't seem right. Furthermore, I am not arguing that they should be paid less than average as a group, just not more.
The most important thing that needs to happen to the city budget is to tie employee wages to the taxpayers ability to pay, which means setting a residential tax rate cap at 1%. Otherwise, there will be two groups of workers in Hamilton, city employees and everybody else.
By grassroots are the way forward (registered) | Posted March 29, 2009 at 01:13:46
A Smith: What is wealth? Is it something that you can actually define? Does a wealthy person need lots of moeny or is it something else?
While you may have valid points, think in the long run, your attacking the wrong body.
Labour must stand for labour, trace the labour history, the roots.
Division is an easy cop out, look at the root causes!!!
By A Smith (anonymous) | Posted March 29, 2009 at 02:44:34
Grassroots >> Does a wealthy person need lots of money or is it something else?
The taxpayers of Hamilton are not wealthy, apparently 20% of the city's population is under the poverty line. The average city employee makes more than the average wage in Canada, far above the poverty line. All I am suggesting is to bring these two numbers closer together.
>> Labour must stand for labour, trace the labour history, the roots.
I am standing up for labour, the labour of the taxpayer who PAYS the salaries of city employees. For every dollar that goes to a city employee, it reduces the amount of money that goes to someone who works at Stelco, or Tim Horton's, or as a temp worker. This isn't about increasing division, it's about decreasing division. Currently, the relatively low income taxpayers of Hamilton subsidize the relatively high income city employees.
By A Smith (anonymous) | Posted March 29, 2009 at 03:31:32
Ryan >> These people did nothing wrong in your moralizing sense but are still "feeling the pain".
If you buy a house with other people's money, then you had better make sure you can pay it off. That's just life.
>> According to the Ministry of Finance, federal spending increased 4.8 percent in FY 2007-8 over FY 2006-7.
I was referring to the U.S economy. Canada has actually done much better limiting spending recently, with total government spending only up 5.6% in 2008( tinyurl.com/dcflsl ). In fact, while GDP has been flat, final domestic demand, which measures domestic consumption and strips out net exports, has done pretty well.
>> You do realize that the increase in government spending has *followed* the reduction in private spending and not the other way around, right?
Who says that governments have to borrow money to spend? What would be wrong with keeping government spending static as a percentage of the economy? Therefore if average people have to cut their spending, so should government. To argue otherwise is to give governments blank checks with taxpayers money.
>> Sorry, but the government was too busy believing, as you do, that markets are self-regulating
Markets are markets, they price goods based on supply and demand and that's it. Furthermore, I don't argue that markets are self regulating, I don't even care. If people want to buy homes for historically high prices, then I say more power to them. It's stupid, but that's what freedom is about, making decisions, both good and bad.
>> Regulations need to stay up to date with the mechanisms people use to invest money
Good luck. If you think that people who work for the government are as smart as those in the private sector you're dreaming. Furthermore, politicians are easily swayed by campaign contributions, etc. Just Google Chris Dodd if you need a primer.
>> It's the shadow banking system you champion that has gone into collapse, taking much of the real economy down with it.
The "real economy" was duped by their own greed. If they hadn't placed such large bets on the real estate market, they would have been fine. They made stupid decisions and now they will suffer.
>> Moral suasion never works. If you want to stop bubbles, you do so with effective regulations and macroeconomic policy. The history of modern economics proves this conclusively.
How about the truth. If Barney Frank had come on T.V and warned people not to buy homes after 2004, he could have helped stop the bubble, but he did the complete opposite.
By A Smith (anonymous) | Posted March 30, 2009 at 12:56:11
Ryan >> Many people who borrowed modestly and responsibly have still run into trouble as the recession leaves them without a job or with reduced pay. Many people who invested prudently have found their retirement savings gutted despite doing everything the way they were 'supposed' to.
Buying homes at historically high prices is risky. Buying stocks at high multiples relative to GDP is also risky. Everybody has heard "buy low sell high", so if people did the opposite, that's their own fault.
>> Yet our economy is still hemorrhaging jobs and our GDP is still shrinking. So much for your moralnomics.
After looking closer at the real GDP numbers as put out by the feds, here is what I have come up with...From I-2006 to IV-2008 (Harper's term...tinyurl.com/c6fjhp), real GDP has averaged 1.18% annualized growth. In that time, direct government consumption has gone from 22.18% of GDP to 23.68%.
In contrast, from 1998 to 2007 (tinyurl.com/cxwvtm), direct government spending by government went from 22.29% of GDP to 22.65% of GDP, relatively flat. However, in this time period, where government spending as a percentage of the economy stayed about pretty constant, real GDP growth averaged 3.24%.
If government can keep their spending to the level of growth in the economy, or less, real GDP does well. When they grow faster than the economy, you get slowdowns, which is what has happening today.
>> The same people who believe economics is a tool of analysis and a policy instrument,
What analysis, you never use numbers to back your claims. Please show me some numbers to back your claim that shrinking the private sector is good for real output.
>> if you don't care about what happens when markets are unregulated, why should anyone care what you think about it?
That assumes that regulating markets actually produces positive results. The financial industry is the most highly regulated industry in the U.S. and what good has it done them. Conversely, the illegal drug trade is completely unregulated and it is flourishing, despite all governments efforts to the contrary.
>> While you wring your hands gleefully at those people's comeuppance, the rest of us are trying to establish a civil, humane society that provides enough stability for real personal freedom, not your hypothetical freedom to freeze in the dark.
If you invest in something overvalued, who's fault is that, yours or society's? Furthermore, is it fair that people who took small mortgages should now bailout those who lived high on the hog for a few years? Life is about making choices, so when you borrow other people's money, you had better make sure you can pay it back, otherwise, your better off renting. Making someone else pay for your home is just wrong.
>> The real economy has been dragged down by the collapse of the unregulated shadow economy
The real economy has been dragged down by a massive growth in government spending. This has stolen limited capital away from the private sector and the result has been less private investment. From I - 2006 to IV - 2008, U.S. government consumption and investments have grown from 2458.4B to 2911.4B, an increase of 18.42%. Meanwhile the economy as a whole has only grown 9.57%. As a result of a surging government sector, private investments have been squeezed out, shrinking 15% in this same time period.
Because the amount of investment capital is limited at any one time, when government takes more of it, it comes at the expense of the private sector. That's what has occurred under Bush II and is the opposite of what happened under Clinton. If you want a strong economy, you need a strong private sector. If you want a strong private sector, you can't let government hog all the investment capital.
>> This crisis is not a failure of personal moral fortitude - it's a policy failure
I agree. If government would stop crowding out the private sector, businesses would not have to reduce the amount of investments they make. Japan did this in the nineties and they call it the lost decade.
By A Smith (anonymous) | Posted March 30, 2009 at 17:09:47
Ryan >> People need to live somewhere. Houses prices would never have inflated as they did if the reckless financial mechanisms that led to the housing bubble...
Starting in 2002 and ending in mid 2006 (tinyurl.com/426qvt), median home prices rose between 10-30% year over year. If the government workers who calculate inflation had included actual home prices and not just borrowing costs (due to low interest rates)in their calculations of inflation, this problem would never had existed. Government gave the lenders access to cheap money for too long and the result was too much lending.
>> As usual, you assume causality in a manner that reinforces your prejudices. The recession was not caused by an increase in government spending...
From 1993 to 2000, real increases in government spending increased an average of 1.16% per year and real GDP went up 3.73% per year. From 2001 to 2008, real government spending grew at 2.35% a year and GDP grew at 2.16% a year. What is it about these numbers (tinyurl.com/czx4yr) that are untrue?
>> In this particular case, I can't point to a web page that explains keynesian economics. You'll need to go out...
Anyone unwilling to consider a strong correlation (backed by actual numbers) simply because it attacks their political beliefs, shouldn't be taken seriously.
Look at Japan (tinyurl.com/69q499), they did the Keynesian drill in the nineties and it was a disaster. Conversely, Canada cut spending, to reduce the deficit and we were one of the best performing economies in the world (1993-2000).
>> I claimed only that when the economy goes into recession caused by a panic and collapse in financial markets, the government needs to step in as the lender and borrower of last resort until the private economy recovers.
Why? What is it about the government that gives them the expertise to know who is a good borrower and who isn't? That's what lending is all about, giving money to people in the hopes that they can produce a positive return on capital. If the government simply borrows money and gives it to companies who will destroy more of it, how does that help anyone?
If government wants to help the private economy, the best way to do this is to slash it's own consumption and give tax breaks to the private sector. Of course, why would government cut their own meal ticket when they can just charge it to the taxpayer funded credit card?
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