More people should read this blog

Despite the fact that many of you disagree with me, you have to admit I do make an effort to uncover relevant and interesting data.  For example, much of what the Auditor General reported this week about NB reliance on federal transfers and on income tax growth – I covered on this blog weeks/months ago. 

In fact, I was the only source when the budget came out that specifically pointed out that the NB balanced budget strategy by 2014 was based on a completlely unrealistic assumption about a) cost control and b) economic growth.

I have also blogged about the increase in income taxes paid and that it has been outpacing wage growth.   While an exact explanation for this would require a deep analysis, I posited then and now that more people are being pushed into higher tax brackets, hence the relatively higher tax rates.

For example, look at the following chart, selected health care sectors have had average weekly wages rise by double and triple the overall average (Industrial Aggregate).  Please note this is average weekly wage growth so if more people are moving from part time to full time it would push up the averages.  The point is that people in these categories are being elevated into higher tax brackets.  Think about business support services and administrative support services.  The overall wage levels have been pushed up significantly by the arrival of all the call centres in New Brunswick.  The weekly wage is still not that high (average for biz support services of $542/week but it has almost doubled in a decade).  To relate back to the income tax discussion, in 1999 workers in this sector earned $282/week on average – or barely enough to pay any income tax at all.  By 2008, they were earning over $28,000 per year – still not a high salary by any measure but well into the income tax paying range.  We are talking about thousands of workers in that group alone.

Just food for thought.

Average Weekly Earnings Wage Growth (1999-2008)

Ambulatory health care services [621] 60%
Offices of physicians [6211] 97%
Business support services [5614] 92%
Administrative and support, waste management and remediation services [56] 43%
Public administration [91] 41%
Industrial aggregate excluding unclassified businesses [11-91N](5,6) 30%

Manufacturing [31-33] 21%
Retail trade [44-45] 20%
Credit intermediation and related activities [522] 10%
Computer systems design and related services [5415] 4%

Source: Table 281-0027 – Average weekly earnings (SEPH), unadjusted for seasonal variation, by type of employee for selected industries classified using the North American Industry Classification System (NAICS).

3 thoughts on “More people should read this blog

  1. Yes, I read it, partially for the opinions, and partially for the news and data. It’s a great read, much greater value than my local newspaper, with more solid analysis and data to support opinion.

    That said, this set of stats is interesting, and reminds me about the mantra that development should build on strength. I don’t know whether it has gone unnoticed or not, but Moncton is emerging as a regional health services centre. When I moved to the city in 2001, it has two walk-in clinics (which it called ‘after hours clinics’ – try to find that in the phone book when you come from ‘away’) and only a few pharmacies. Now the pharmacies are everywhere, there’s a dozen or more clinics, numerous secondary health services have sprung up, there’s a health education program at UdeM, and more. There is clearly an opportunity here for the city to consolidate its position and take advantage of being able to lure some of those higher-salary employees to the city.

    That’s a lot way from being able to develop anything like export capabilities, but if the city were able to in some way combine its technology and communications savvy with knowledgeable and expert medical services, it could have something.

  2. Actually, pretty much what the Auditor General said has been said at this blog since day one. I thought that was the whole point of it? However, its not the first time an AG has said that about a New Brunswick budget.

    I didn’t quite follow the chart, but it does back up what David has said about public administration. Anybody who gets a cheque from the government has seen salaries rise, and keep in mind that this government has reduced the number of tax brackets from four to two.

    I used the Corporate Income Tax as an example, but I certainly didn’t mean to suggest that all problems are solved with one policy change. Even worse is how the liberals treat the wealthy-which is ironic since they blunder so bad that virtually all the good will from lower taxes was squandered with how they dealt with doctors. However, its interesting that Ontario at least had “Rae days” and is already talking about similar policies, while in NB, which gets almost 40% its budget from a poverty stricken federal government, which has policies the AG claims are ‘unsustainable’, and yet whenever a budget comes in, there is never a mention of public sector salaries.

    So I’m really not that surprised why the NDP doesn’t find much support in NB, given that most of the only unions left are public sector unions.

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