Nova Scotia is a ‘low-wage ghetto’?

From an article today:

Nova Scotia is a “low-wage ghetto,” according to a co-author of a report released today. Larry Haiven, a professor at Saint Mary’s University, said the report he wrote for the Canadian Centre for Policy Alternatives shows while productivity has increased over the past 20 years, Nova Scotia’s wages are lagging far behind. “If workers have been contributing to an overall productivity increase, then what have they gotten out of it? The answer is nothing.”

But if workers are more productive at low wages, and the province’s economic growth is healthy, who’s getting the money? Haiven said they crunched the numbers and realized it’s the business owners who are cashing in. “What’s happened is none of it’s going to labour, on average, and all of it is going to business owners.”

I find the CCPA actuall does some good research and explores areas that need to be explored but then they go to far and layer on a huge heap of ideology that belittles the value of the research.

Consder that last line about “all of it going to business owners”. What does that mean? Cripes. I have seen reams of data that shows Maritime business owners are far less wealthy on average than those in Ontario or the richer provinces (with a very few notable exceptions). The bottom line is the chronic lack of private sector business investment in Atlantic Canada had led to much lower private sector wages, less R&D and less productivity.

But to try and frame this as a few CodFathers milking the poor in Atlantic Canada is a distortion and not based on good research. In fact, in the little research I have done in this area, the large businesses that are Maritime owned pay considerable higher wages than their counterparts on the SME side of things.

We need to get serious about attracting our share of FDI. We need to get serious about finding mechanisms to get our SMEs more interesting in risk taking and moving out of their comfortable tiny local markets. As long as our local business leaders (small and medium) show little interest (in aggregate) in expanding beyond our borders and as long as we lag behind in FDI, we will never get the kind of economic impetus that leads to real wage increases, wealth creation and ultimately sustains population and our communities.