Career, education, ethnic roots: Demographics tell the tale of the 2019 federal election

By the time polls closed on Oct. 21, 2019, more than 18 million Canadians had cast their ballots to fill each of the 338 seats in the federal House of Commons. It had been a fairly tight race in which a minority government seemed likely, but uncertainty remained over whether that government would be headed by incumbent Liberal prime minister Justin Trudeau or Conservative opposition leader Andrew Scheer.

By the end of the night, it was clear that the Liberals would remain in office for at least the time being, their robust 2015 majority being reduced to 13 seats short of the majority-government threshold. Although they outnumbered the Conservatives in the House by 157 seats to 121, the Liberals won fewer votes overall.

Some of the answers as to why the 2019 election turned out as it did will be revealed when a team of academics completes the Canadian Election Study, a survey of Canadians conducted both before and after each federal election to analyze the patterns of public opinion underlying the result.

Yet there is another way to analyze the election, and that is by merging together two vital datasets: Elections Canada’s tally of votes received by electoral district, and Statistics Canada’s 2016 census results by electoral district. Merging this data can be fairly easily done by anyone with an understanding of how Excel’s Pivot Tables feature works. With the same constituencies being in play in both 2015 and 2019, the data files could be matched up quite readily.

Using Pearson correlations, it then becomes possible to look for patterns in the vote. For example, if 35 to 39 year olds are disproportionately likely to produce votes for Party A, this will show up as a solidly positive relationship across the ridings in which that party fields candidates with a correlation of perhaps 0.400 or better on a scale of -1.000 to +1.000. But if they are no more likely than the population as a whole to vote for Party A, the correlation would be closer to zero.

The Liberals’ core constituency is the country’s university graduates. Their presence was the single strongest predictor of how well the Liberals did in a constituency, as about one-third of the difference in the Liberal vote take from one riding to the next could be explained by the number of residents with a university certificate or diploma above bachelor level. Liberal support was particularly strongly associated with the presence of people who had degrees in history, law, the social sciences, computer and information sciences, mathematics, and statistics. Among these groups, they largely compete with a significantly weaker NDP and a weaker-still Green Party, while these groups show signs of mild aversion to the Conservatives and the Bloc.

Secondary sources of Liberal support appear to have been 20 to 24 year olds and 45 to 54 year olds, singles, immigrant communities, some very low income earners, those spending more than 30 percent of their income on shelter, and those employed in office jobs, particularly finance and insurance. Francophones also showed signs of being more likely to be Liberal voters.

Canadians of Indigenous descent, particularly Métis, appeared to be averse to voting Liberal in 2019, as were tradespeople such as those employed in construction or the mechanic trades. As has long been the case, those in agriculture and natural resources also appeared to be Liberal-unfriendly.  Their presence in a riding correlated favourably with Conservative fortunes.

Several subgroups formed the Conservatives’ core constituencies, in some cases these being the diametrical opposite of the Liberal support base. The Conservative vote in ridings throughout the country tended to be favourably influenced by the number of married people, native English speakers, households earning $80,000 or more annually, residents of northwestern European ancestries, and homes with four or more bedrooms. Those who had studied construction or theology also showed signs of being more strongly attracted to the Conservative Party in 2019.

Half of the difference in how the Conservatives polled across the 338 ridings could be explained by the number of residents claiming to be of non-French Western European origins, particularly German.

Electoral districts with higher numbers of people working in management occupations, trades, transport and equipment operation, natural resources, agriculture, forestry, fishing, hunting, mining, quarrying or oil and gas extraction also tended to be more likely to provide the Conservatives with favourable election night numbers. As noted before, there were indications that the larger a constituency’s Indigenous and particularly Métis population, the better the Conservative candidate tended to poll.

Forces that tended to hold down the Conservative vote included French-speaking populations and  low incomes. There are also indications that university-educated voters swung away from the Conservatives between 2015 and 2019. The ability of the next Conservative leader to make inroads in Quebec and among not just recent but past university graduates will play a role in how well the party does in the next election.

The Bloc Québécois is essentially Quebec’s blue-collar party, similar to what the NDP used to be in the rest of Canada. Its most critical support base is the francophone Quebecker — quelle surprise! — and those in the trades, particularly construction. Solid secondary support groups include those aged 50 to 64 years, those living in lower population density areas, and middle-income households in the fifth, sixth and seventh deciles.

There is a distinct aversion to voting for the Bloc among Quebec’s immigrant communities, specifically those of non-francophone origin, and of course among anglophones. University graduates also appeared to be negatively inclined toward the Bloc. These patterns were not just exhibited in the 2019 vote, but in how that vote differed from 2015, suggesting a further polarization of the Quebec electorate.

There are indications that there might be a chilly relationship between the Bloc and the younger Quebec voter, as about one-fifth of the difference between ridings in terms of how well the Bloc polled could be explained by the number of 25 to 29 year olds — the more of them there were, the worse the Bloc tended to do.

The 2019 campaign was not a great one for the NDP, securing the party just 24 seats in the House of Commons. A big part of the problem here is that, unlike the Liberals, Conservatives and the Bloc, the NDP didn’t seem to have a distinct constituency of its own to monopolize. Across the ridings, no demographic group showed signs of being strongly NDP-oriented, though at the same time, none seemed to be outwardly hostile, either.

Some groups, however, showed signs of being more likely than average to be NDP voters. This included those who were separated from their spouses, those with extremely low incomes of $5,000 or less, those of American or European (including British Isles) origin, and those who had studied public administration, social services or cultural or gender studies in university. People who worked in arts, entertainment, recreation, accommodation or food services also showed signs of being more likely to be NDP voters.

And, yes, the NDP ostensibly did quite well with the cyclist vote: about a fifth of the difference in their vote across the 338 ridings could be explained by how many people commuted to work by bicycle.

A large proportion of their setback in the 2019 election could be explained by having lost votes to the Bloc Québécois. On an election-over-election basis, they appeared to offset this with gains in English-speaking constituencies nationwide among married and separated voters and among those of British Isles and northwestern European origin — groups among which they might have taken some support away from the Conservatives.

They also appeared to split the support of those who had studied theology or religion with the Conservatives, reflecting religion’s natural liberal-conservative divide.

More worrisome for the NDP might be the loss of the party’s blue-collar roots. Households earning $30,000 to $50,000 nationwide appeared to drift away from the NDP between 2015 and 2019, with this being much more pronounced among those with an apprenticeship or trades certificate or diploma.

Like the NDP, the Green Party had trouble finding a demographic group to monopolize in the 2019 election. On a secondary basis, however, there are indications of a northwestern European element to the Green vote, as ridings with larger numbers of voters of British Isles and Scandinavian ancestry tended to produce slightly better results for Green Party candidates.

The incidence of some west coast Indigenous languages such as Straits Salish and Halkomelem were also associated with better Green Party outcomes.

Now we come to the Peoples’ Party of Canada. When former Conservative leadership contender (and near-victor) Maxime Bernier announced that he would start his own party running on an immigrant-unfriendly populist platform, some wondered if it would draw votes away from the Conservatives.

When it came time to vote, however, the Peoples’ Party singularly failed to monopolize or even do particularly well with any demographic. The best it could do was to cultivate a few groups that tended to skew slightly in its favour, such as third-generation or greater voters (i.e., those without recent immigrant roots) and a bit of the blue-collar and agricultural vote. These groups largely stuck by the Conservatives, though.

There were also a few obscure parties that ran in the election. Even though a lack of money and organization prevented them from running candidates in more than a fraction of constituencies, it was still possible to glean insights into their support base by looking at the relationship between constituency demographics and their total vote.

The Christian Heritage Party (51 candidates) has been a consistent minor contender for power for decades, never coming close to electing a Member of Parliament. They have strong cultural roots in the Low Countries, as shown by the fact that about a third of the difference in how they polled from riding to riding could be explained by the number of Dutch and Frisian speakers, the latter being a language indigenous to the Netherlands’ northern coast.

There were also indications that the number of German or Flemish speakers, the number of Indigenous people in a riding, and the presence of a significant agricultural, forestry, fishing or hunting sector had a favourable effect on how the CHP polled, however modestly.

Canada’s hard-left is split between two minor parties, the Communist Party of Canada and the Marxist-Leninists. This split goes back many decades to debates over whether the true path to socialism was to be found in Moscow or Beijing, and later in the more liberal Yugoslav variant, the isolationistic Albanian variant, or the tropical Cuban variant.

This difference shows in the correlations. As small as their voter bases were, a correlation analysis was enough to detect the distinctions — one of the reasons why I highly recommend looking at correlations as a much more insightful form of research than looking at percentages.

The Communist Party vote in Canada (30 candidates) was strongly correlated with the speaking of various East Asian languages in the constituencies where it ran candidates, especially Chinese languages such as Cantonese and Hakka. The Communist vote tended to be higher in ridings with larger numbers of people originally from China, Hong Kong or Viet Nam, suggesting a familiarity aspect.

The Marxist-Leninist vote (50 candidates), conversely, tended to be associated with populations of Eastern European origin, such as Albanian, Croatian, Macedonian, Polish or Slovene.

The Libertarians (24 candidates), which attracted about eight thousand votes nationwide — about the same as the Communists and Marxist-Leninists combined — also had a vote with some curious, strong linguistic correlations. More than 60 percent of the difference in the Libertarian vote across the ridings could be explained by — strangely enough — the number of Lao, Mohawk, Assyrian Neo-Aramaic or Chaldean Neo-Aramaic speakers, the latter two being Middle Eastern languages. The Liberals might want to ask these communities if there’s a bit of name confusion happening here — or perhaps there’s something about the Libertarians that resonates with them.

Finally, let’s look at the Rhinoceros Party. Dating back many years as a satirical presence on the Canadian electoral landscape, they fielded 39 candidates and won nearly 10,000 votes. Their support tended to come from (perhaps even exclusively from) Quebec, with the party resonating a bit more with blue-collar voters in the $20,000 to $50,000 income range.

If you’re an Excel lover like I am and want to look at numbers, have fun. (Large .xlsx file — don’t run up your data bill!)

Contented Norway, Stressed-Out America: A tale of two countries, and what their governments spend the people’s money on

Nearly five years ago, The Economist published a front cover featuring a scruffy-looking Viking, accompanied by the words: “The Next Supermodel: Why the world should look at the Nordic countries.” While the world’s bigger countries and current and former superpowers struggled with their problems, the Nordic countries — Iceland, Norway, Sweden, Denmark and Finland — seemed to have their act together, winning praise over and over again for their healthy economies, relatively low crime rates and high standards of living.

Over the intervening five years, not much has changed. The Nordics continue to be strong performers in all the areas that matter. When this blog looked at countries’ performance across four indices last May — the Human Development Index, the Corruption Perceptions Index, the World Competitiveness Scoreboard and the Global Peace Index — the Nordics constituted at least four of the world’s 10 best countries, with Denmark taking the number-one spot. (Canada ranked either fourth or sixth, depending on whether you ranked each country by its “weakest link” or by its average score.)

Now there’s more good news for the Nordics. John Helliwell, Richard Layard and Jeffrey Sachs of the New York-based Sustainable Development Solutions Network have released their 2017 World Happiness Report, and concluded that Norway, Denmark, Iceland and Switzerland were the world’s happiest societies in the 2014-16 period.* They credit Norway’s high ranking on “mutual trust, shared purpose, generosity and good governance”, as well as good management of its oil reserves, and using the proceeds from it to prepare for a better future instead of spending it all as it comes in.

“Mutual trust, shared purpose, generosity and good governance” are not words, however, that would describe 2017 in our neighbour to the south. The United States has had a memorable 2017 for all the wrong reasons — and it showed in its rank. As noted:

The USA is a story of reduced happiness. In 2007 the USA ranked 3rd among the OECD countries; in 2016 it came 19th [Note: this might be a typo — the report’s data tables show the U.S. in 14th place; it was the U.K. that was in 19th place]. The reasons are declining social support and increased corruption . . . and it is these same factors that explain why the Nordic countries do so much better.

The authors particularly singled out the U.S. government’s priorities for criticism. As they bluntly note on page 180:

America’s crisis is, in short, a social crisis, not an economic crisis . . . This American social crisis is widely noted, but it has not translated into public policy. Almost all of the policy discourse in Washington DC centers on naïve attempts to raise the economic growth rate, as if a higher growth rate would somehow heal the deepening divisions and angst in American society. This kind of growth-only agenda is doubly wrong-headed. First, most of the pseudo-elixirs for growth — especially the Republican Party’s beloved nostrum of endless tax cuts and voodoo economics — will only exacerbate America’s social inequalities and feed the distrust that is already tearing society apart. Second, a forthright attack on the real sources of social crisis would have a much larger and more rapid beneficial effect on U.S. happiness.

One could only imagine the authors’ alarm that, having just passed controversial tax reform legislation, there is now talk of targeting America’s already modest social safety net for deep cuts. As the New York Times reported on Dec. 2:

As the tax cut legislation passed by the Senate early Saturday hurtles toward final approval, Republicans are preparing to use the swelling deficits made worse by the package as a rationale to pursue their long-held vision: undoing the entitlements of the New Deal and Great Society, leaving government leaner and the safety net skimpier for millions of Americans.

Speaker Paul D. Ryan and other Republicans are beginning to express their big dreams publicly, vowing that next year they will move on to changes in Medicare and Social Security. President Trump told a Missouri rally last week, “We’re going to go into welfare reform.”

In fact, the core items of the social safety net already constitute a relatively small share of total U.S. local, state and federal government spending. Organization for Economic Cooperation and Development (OECD) data show that, in 2015, only 21 percent of total government spending was dedicated to what the OECD classifies as “social protection”; that is, sickness, disability, old age, housing and unemployment support.

This already puts the U.S. toward the bottom of OECD nations in terms of the percentage of local, regional and national government spending on social protection. Indeed, given the low priority their own governments give to their well-being, not to mention other abuses like drawing local electoral boundaries to guarantee one-party rule, why shouldn’t Americans feel bitterly resentful toward their governments?

In Norway, social protection was a significant 40 percent of all government spending in 2015 despite an unemployment rate of just four percent that year and 75 percent of all Norwegians aged 15-64 having a job — one of the highest rates in the world.

That spending paid off, according to a 2017 OECD report on Norway. Not only has it helped provide the sense of well-being that the lack of prompted many Americans to vote for Donald Trump in 2016, but it is something the OECD recommended that Norway leave intact (emphasis mine):

Fiscal reform should not aim to significantly reduce the scope of Norway’s comprehensive welfare programmes and public services. These are integral to its socio-economic model, playing a key role in making economic growth inclusive and keeping well-being high. Given the fiscal rule, this means that taxation will remain high compared with many countries. Consequently, a pro-growth tax mix, strong labour skills and easier regulations for doing business are needed for the business sector to thrive in global markets.

As we end 2017, revolution is in the air as like no other time in the past 50 years, if not the past 100 years. Some look to the hard-left for solutions to the high level of anxiety, some to the hard-right. What the world could really use, though, is a bit of Nordic sense by protecting not jobs, not industries, but people.

 

* – Canada ranked seventh in the World Happiness Report, just behind Finland and the Netherlands. New Zealand, Australia and Sweden rounded out the top 10.

Trust leads to security leads to trust: The forgotten lesson that made a mess of 2016

“In the future, Americans — assuming there are any left — will look back at 2016 and remark: ‘What the HELL?’” American humourist Dave Barry wrote in his retrospective on 2016. “If years were relatives, 2016 would be the uncle who shows up at your Thanksgiving dinner wearing his underpants on the outside.”

Likening it to “a choice between ointment and suppository,” the U.S. presidential election was Barry’s prime example of the mess that 2016 turned out to be.

“CNN told us over and over that Donald Trump was a colossally ignorant, narcissistic, out-of-control sex-predator buffoon; Fox News countered that Hillary Clinton was a greedy, corrupt, coldly calculating liar of massive ambition and minimal accomplishment.”

“And in our hearts we knew the awful truth: They were both right.”

The absurdities of 2016 extended beyond the United States. The British — mainly the English — voted in June to leave the European Union, despite the possibility of a renewed bid for Scottish independence (continued membership in the E.U., popular in Scotland, having been one of the factors that prompted Scots to vote against separating from Britain in 2014), and the unraveling of the hard-won Irish peace (Northern Ireland also having voted against leaving the E.U.)

In other populist revolts, the Austrian far-right came uncomfortably close to winning the 2016 presidential election, and recent polls showed Marine Le Pen, of the anti-immigrant Front National, running a close second in the run-up to the 2017 French presidential race.

The strange mood has even crept into Canada, where the presumptive front-runner for the leadership of the Conservative Party — the party which has governed Canada for half of the past 30 years — is Kevin O’Leary, a comically abrasive businessman turned full-time TV personality, with no political experience, who brandishes a spatula in a Dec. 24 YouTube video and vows to take it to Ottawa and “scrape all that crap out”. (To his credit, O’Leary has avoided the anti-immigrant sentiment of Kellie Leitch, the Winnipeg-born Conservative leadership candidate whose capacity for getting attention through mean-spiritedness has not so far given her lasting momentum.)

What is behind the bitter mood that made 2016 the year of Donald Trump, Brexit, Marine Le Pen and the slowly rising weirdness of the Conservative leadership race?

The most probable explanation comes from the book Viking Economics by George Lakey, a retired professor and peace activist. In the book, he contrasts the sense of mutual security and trust that citizens of Norway, Sweden, Denmark and Finland feel with the chronic insecurity of life in the United States — not to mention other countries, to varying degrees.

The United States operates a different economic model, which values insecurity . . . A family depends on a job that might disappear tomorrow; it lands in a feeble safety net; it has few prospects for finding another job as good or better. Small wonder that U.S. unions sometimes defend inefficient labor practices and outmoded organization of work, even though undermining productivity — whatever it takes to keep workers in jobs. In other words, compared with the high-productivity Nordic model, the U.S. insecurity approach creates an incentive to resist efficiency.

Lakey contrasts the American tendency to resist a social safety net with the freedom that a strong social safety net has given Nordic business owners to experiment with new ways of doing things, and to Nordic unions to accept and even welcome such changes.

There is reason to believe that the Nordic approach has secured positive results. The 2016 World Competitiveness Scoreboard places fifth-place Sweden and sixth-place Denmark just behind the third-place U.S. (and ahead of tenth-place Canada) in its ranking of the world’s most competitive economies. China and Switzerland took the top two spots.

And there is reason to believe that chronic insecurity takes a toll on people, and on their faith in democracy.

Andrew Wroe, of the University of Kent in the U.K., has carefully researched whether economic insecurity and anti-government sentiment are linked. In the case of the United States, he wrote in a 2015 commentary on the London School of Economics web site, the answer is “an unambiguous yes”.

As Jacob Hacker points out in The Great Risk Shift, the US government has deliberately privatised risk in the name of ‘personal responsibility’ by dismantling large parts of the social insurance system, and it has done so at a time when macro-economic changes have actually increased threats to economic security.

[. . .]

. . .[P]rior research demonstrates that political trust is vital to the good functioning of contemporary polities. One possible remedy for low trust would be to halt and then reverse the privatisation of risk by bringing the government back in. Comparative European data show that countries with more extensive welfare systems generally experience higher levels of political trust, possibly because welfare protects people against insecurity. However, the major progressive reforms that may help restore trust in the US are primed to fail precisely because trust is so low. Distrusting citizens, which constitute a large majority of all Americans, are less likely than trusting citizens to support major liberal reforms to the welfare state; indeed, they are more likely to support conservative alternatives that further privatise risk and, in turn, further increase insecurity. Such is the irony of the politics of trust.

Indeed, in 2014, three French researchers examined the relationship between the comprehensiveness of the social safety net in OECD member-countries and the degree to which the citizens of those countries trusted one another. They found that countries that were more polarized between trustworthy and untrustworthy — or “civic” and “uncivic” — individuals had the greatest difficulty supporting an effective social safety net.

Uncivic citizens, the sort who evade their tax obligations while seeking to extract all they can from social benefits, will support the expansion of the welfare state more strongly than civic citizens will, since they expect to benefit the most from it while shirking the costs. A rise in the share of uncivic citizens could thus increase the demand for a generous welfare state. However, an opposing force is also at play. Civic citizens will be less inclined to support high taxes if they expect to be surrounded by uncivic individuals who do not pay taxes and abuse social benefits . . . [But an increase in support] appears when everyone is civic. In this situation, all individuals strongly support the welfare state because nobody cheats on taxes and social benefits.

So, in short, what went wrong that gave the world the upcoming Trump presidency and Brexit debacle? A safe bet is that the U.S. and the U.K. fell into a “distrust trap”: a culture of economic insecurity, and resentment at feeling abandoned to fend for themselves by politicians who went on to live comfortable lives separate from the wider community, killed trust in politicians. Meanwhile, difficulty trusting fellow citizens made a strong social safety net that would ease their burdens unsustainable.

The lesson? Trust matters. With it, a society thrives. Without it, a society begins to fall apart.

Between 2005 and 2009, the World Values Survey asked people around the world if they felt that “most people can be trusted”. In Norway and Sweden, with their strong social safety nets and high levels of confidence in their parliaments, two-thirds or more of citizens agreed that, yes, most people can be trusted. In the U.S., however, only 39 percent considered most others trustworthy; and in the U.K., just 30 percent felt this way.

As for Canada: we were barely more likely than the Americans to trust our compatriots, with 42 percent of us considering most other people to be trustworthy. Never assume that a Donald Trump can’t happen here.

Sex and the American Voter

Academic writing has a long and proud tradition of being painfully dull and slow to get to the point, but perhaps that’s simply because no one was able to research whether there was a link between how people vote and their sex lives. Until now.

Finally, three researchers from three U.S. universities have successfully navigated the academic minefields of obtaining time and money and overcoming ethical objections to answer such questions we’ve all been dying to know the answer to, such as whether U.S. conservatives or liberals are more likely to make love in the missionary position.

The answer to that question, according to these researchers is: conservatives are more likely to prefer the missionary position. Their article, which appeared online in full-text earlier this week before being pulled behind a paywall, also found that social conservatives tend to have sex for the first time at a later age and to have fewer partners, yet are also more likely to be satisfied with the state of their sex lives.

U.S. liberals, meanwhile are said to be more likely to take part in “adventurous sexual behaviors (e.g., sex toys)”, and in risky behaviours, such as sex with a total stranger.

Fortunately, I was able to screenshot a particularly colourful paragraph from their findings this past week and post it to Twitter for a laugh before the paywall was imposed. Among the more salient bits:

“Those who gave more oral sex or received more oral sex are more conservative on out-group/punishment attitudes (anti-immigration, pro-death penalty, etc.), but more socially liberal (support gay rights, pro-choice, etc.)”

 

“Those who have more sex with a woman on top are also more conservative on out-group/punishment attitudes, more likely to [have voted] for Romney, but more socially liberal. Those who have more ‘doggy style’ sex are more conservative on out-group/punishment attitudes, but more socially liberal.”

 

“People who masturbate more are more liberal on all attitude dimension, self-report as liberal, Democrats and [as having voted for] Obama.”

 

“Those who engage in more S & M [were] more likely to vote for Obama, self-report as liberal and have more liberal social attitudes. People who engage in more hand-to-breast contact [were] more likely to vote for Romney, self-report as conservative, and be more conservative on out-group/punishment and economic attitudes.”

 

“People who kiss on the mouth more [were] more likely to vote for Romney, self-report as conservative and Republican, and be more conservative on out-group/punishment and economic attitudes.”

After Americans go to the polls Nov. 8 to elect a new president, after what has undeniably been the most wretched and embarrassing presidential race in modern history, a desire to have less politics and more cuddling would be entirely understandable. But let’s just hope those couples where one voted for Trump and the other voted for Clinton can patch up their differences.

“The relationship between sexual preferences and political orientations: Do positions in the bedroom affect positions in the ballot box?” by Peter Hatemi, Charles Crabtree and Rose McDermott will be published in the Personality and Individual Differences journal in Jan. 2017.

 

 

The economist who says Canada is headed for a credit crisis

Professor Steve Keen, of Kingston University in Greater London’s western suburbs, has made a name for himself as one of economics’ leading contrarian voices. He has criticized the idea that no one could have seen the 2008 global financial crisis coming as “balderdash“. He was one of the relatively few economists to favour Britain leaving the European Union; and perhaps less controversially, he sees the common European currency as “destroying Europe” and as something which “should never have started in the first place.

But Keen foresees problems in more places than just Europe. In an interview broadcast in late September on RT, the Russian government’s foray into 24-hour cable TV news, Keen discussed the rising risk of a debt crisis in China caused by the over-construction of new housing and office space. As he sees it, private debt and demand for credit has reached hazardous levels:

“The potential trigger is simply the level of private debt. Anything above 1.5 times GDP is enough to put you in the range where changes in credit have a large impact on your demand. Secondly, if your credit demand exceeds 10 percent of GDP, you’re in danger territory again, because, simply, stabilization of that rate of growth of credit, so that it grows at the same rate of GDP, will mean a fall in total demand in those economies.”

The more disturbing part of the interview comes when Keen sets his sights firmly on Canada:

“The most vulnerable economy apart from China on that front appears to be, of all things, Ireland — again! They’ve got themselves back in the situation; but that may involve their dodgy accounting and their dodgy tax records. But certainly Canada. Canada is the western developed economy that I think is most exposed to a credit crisis, and indeed using a different metric, that’s the country that the BIS [the Bank for International Settlements; a Swiss-based banking institution for the world’s central banks] identifies as the most likely one to face a credit crunch.”

Indeed, news watchers might have noticed that just this past week the Canada Mortgage and Housing Corporation (CMHC) issued its first-ever “red warning” for the Canadian housing market, noting that “high levels of indebtedness coupled with elevated house prices are often followed by economic contractions . . . The conditions we now observe in Canada concern us.”

One glimmer of hope that Keen sees for Canada is that the federal government’s deficit spending might turn out to be a good thing, by diluting the impact of any shock that comes along. Yet he also sees some risk from the possibility that those deficits might come under attack for political reasons:

“What worries me of course is when that credit crunch occurs, the political opponents to Trudeau will blame it on his deficit spending. But his deficit spending is one thing that’s attenuating how bad that shock is going to be. So, Canada definitely, Australia, Sweden, Norway, possibly Switzerland, there’s about 17 countries . . . but those are the major ones [facing a problem].”

The Jimmy John’s case: When doing what’s best for the organization means doing what’s worse for the economy

Usually, when you hear about staff being required to sign non-compete agreements as a condition of employment, it’s easy to assume that this only applies to the big-shots: executives, senior managers, people with intimate knowledge of corporate strategy, and so on, and surely not to a 19-year-old restaurant server or even a 24-year-old shift supervisor at a suburban fast-food outlet.

Think again. In a country where so many feel that “the little guy” is condemned to always end up with the short end of the stick that many have turned to Donald Trump or Bernie Sanders as would-be saviours, a news story appeared this past week that might just reaffirm their suspicions.

Illinois attorney-general Lisa Madigan filed a lawsuit mid-week against Jimmy John’s Gourmet Sandwiches, a Champaign, Ill.-based sandwich shop franchise, for requiring its employees until just last year to sign non-compete agreements. These agreements forbade employees from seeking employment with any other restaurant “that does at least ten percent of its business making sandwiches” within a two- or three-mile radius of any Jimmy John’s restaurant nationwide.

Under the agreement, the ban on working for even marginal competitors remained in effect for two years after leaving Jimmy John’s.

The non-compete agreement was almost certainly designed as a bluff to discourage staff turnover, not with the intent of actually enforcing it. Enforcement would have required:

a.) Keeping track of former employees’ whereabouts, or somehow finding out that the former employee had landed a job at Subway a mile and a half away, 15 months later (possible, but unlikely);

b.) Giving enough of a damn about the alleged breach to actually attempt to hold the former employee to the terms of the non-compete agreement (extremely unlikely for a low-wage job, and unlikely even in some better-compensated, mid-level jobs, if the path of least resistance was to just ignore the whole matter), and;

c.) If all else failed, convincing a court to enforce the agreement even though the courts have a history of overturning such agreements in all but the most serious of disputes.

Even Jimmy John’s conceded in a written statement that holding restaurant workers to non-compete agreements was a bit absurd:

“We made clear to the Attorney General that we would never enforce a non-compete agreement against any hourly employee that might have signed one. We offered to have our CEO sign a declaration to that effect, and pointed the Attorney General to an April 2015 ruling dismissing a federal claim against Jimmy John’s over the use of non-compete agreements, on the grounds that those agreements were not at risk of being enforced.”

Non-compete agreements are nevertheless popular. While the percentage of Canadian workers covered by non-compete agreements is not readily at hand, a White House analysis released just a month ago found that 18 percent of American workers are subject to restrictions on finding work elsewhere, including 14 percent of those earning less than $40,000 annually.

They even have their defenders. “Something strange is happening in the Beehive State,” law professor Nathan Oman wrote in Salt Lake City’s Deseret News this past March, as legislators were passing a new law banning non-compete agreements — a law Oman described as “a solution in search of a problem” and “a classic example of the legislative process run amok.” In defence of non-compete agreements, Oman wrote:

“In non­compete agreements, employees commit not to work for their former employers’ competitors if the employment relationship ends. This encourages employers to invest in their employees and share proprietary information. Everyone benefits, which is why employees and employers agree to the contracts in the first place.”

“In theory, such contracts could harm workers and consumers by giving monopoly power to employers. We solved this problem, however, more than a century ago. Like every other state, Utah law already requires that such contracts have reasonable limits on their geographic scope and duration. Indeed, any business that used them to monopolize a market would commit a crime under federal antitrust laws that have been in place since 1890.”

Others see non-compete agreements as being harmful to the overall economy even if they are beneficial for individual businesses by protecting secrets and calming competition.

On Twitter, I called the idea of requiring restaurant workers to sign non-compete agreements "asinine". Martin's response (in jest, I hope!) made my day. If you don't already do so, follow me on Twitter at @kevinmcdougald

On Twitter, I called the idea of requiring restaurant workers to sign non-compete agreements “asinine”. Martin’s response (in jest, I hope!) made my day.
If you don’t already do so, follow me on Twitter at @kevinmcdougald

A 2010 research paper by three academics from the MIT Sloan School of Management, the INSEAD global business school and the Harvard Business School found that non-compete agreements were economically harmful by encouraging former employees to move away in search of work and thus “stripping enforcing regions of some of their most valuable knowledge workers while retaining those of lesser value.”

“To the extent that one can draw normative conclusions from the above findings, policymakers who sanction the use of non-competes could be inadvertently creating a potential regional disadvantage. From a regional policymaker‘s perspective, the free flow of particularly high-ability talent to the best opportunities seems beneficial as long as it occurs locally . . . whereas such talented workers who take out-of-state jobs are a loss to the region. Regions that choose to enforce employee non-compete agreements may therefore be subjecting themselves to a domestic brain drain not unlike that described in the literature on international emigration out of less developed countries.”

[…]

“…[E]nforcement of non-compete agreements might act as a brake on labor pooling in two ways. First, regions that allow firms to enforce non-compete clauses against ex-employees drive some of their most highly valued skilled workers out of the region, decreasing the local supply of talent. Second, the interorganizational mobility of those workers who remain in the region is lower when non-competes are enforced. Given the role of labor pooling as a microfoundation of agglomeration, we should therefore expect more clustering in regions such as Silicon Valley where non-competes are unenforceable.”

This was supported more recently by a U.S. Department of the Treasury report which found that, while non-compete agreements can protect trade secrets and thus encourage innovation, reward employers for spending more on employee training and reduce staff turnover, they can also lead to lower wages, cause people to leave the careers in which they are most productive, and slow productivity growth.

The Treasury report recommended, among other things, that employers be dissuaded from requiring non-compete agreements unless there is a high probability that they could and would be enforced (i.e., not frivolously or as a bluff, as in the Jimmy John’s case) and requiring that employees continue to be paid at partial salary by their former employers in exchange for agreeing not to seek employment with competing organizations.

The Jimmy John’s case, and the evidence above, suggests that it might be a good use of legislators’ time in the U.S., Canada and elsewhere to limit the use of non-compete agreements. While those in the business and legal communities might see such agreements as useful from their point of view, it’s a benefit that comes at a cost to the wider community. It’s also an example that there’s a gap between what’s good for business (or labour, which has made its own case for competition-limiting measures at times) and what’s good for the economy. The two are not always the same, or even compatible.

Demographic shift putting dream of lower taxes, balanced budgets and no cuts out of reach

By all indications, Manitoba’s provincial election on Tuesday is going to result in the election of the first Progressive Conservative government since 1999, with Brian Pallister being sworn in in late April or early May as Premier of Manitoba. As Pallister and his cabinet settle in to office, they will go through a ritual that all new governments go through: briefings by department staff who will explain the cold, hard realities that they will have to deal with as the excitement of winning an election wears off.

One of those cold, hard realities to be anticipated will be an update on how changing demographics will affect the province’s finances. The heavy influx of immigrants into Manitoba in recent years paints a picture of a young province; but the population data tells a different story.

Statistics Canada periodically updates its population projections for each Canadian province and territory, and its projections of population by age are sobering.

Over time, the balance between working-age Manitobans aged 15-64 and retirement-age Manitobans aged 65-plus has been shifting. Forty years ago, in 1976, there were 6.1 working-age Manitobans for every retirement-aged Manitoban.

Thirty years ago, in 1986, it was 5.3. Twenty years ago, in 1996, it was 4.8; rising slightly to 4.9 in 2006.

But despite the arrival of younger immigrants by the thousands, that ratio has resumed its decline over the past 10 years.

Currently, there are about 4.4 working-age Manitobans for each retirement-age Manitoban. And according to Statistics Canada’s M1 –medium-growth, 1991/1992 to 2010/2011 population trends, in just 10 years time, there will be one less person on the working-age side of the balance than there is today — or 3.4 to 1.

The change is expected to continue in this direction into the mid-2030s, when there will be three working-age Manitobans for every retirement-age Manitoban.

Number of working age Manitobans per retirement-age Manitoban by year. Based on Statistics Canada's Projected population, by projection scenario, age and sex, as of July 1 -- M1 medium-growth, 1991/1992 to 2010/2011 scenario.

Number of working age Manitobans per retirement-age Manitoban by year. Based on Statistics Canada’s Projected population, by projection scenario, age and sex, as of July 1 — M1 medium-growth, 1991/1992 to 2010/2011 scenario.

Why does this matter? As people retire, their spending changes. If you’re a working-age person, think of what you spend your money on today: transportation to and from work, food, clothing, shelter and income taxes.

Now think about how that would change if you were a retiree. You wouldn’t need to drive around so much (or buy a car or fill it up with gas as often). You would likely eat out less; you wouldn’t need neckties or dress shirts anymore except for special occasions; you may very well never be in the market to purchase a home ever again.

All of which means you’ll be paying less in sales taxes, even if the rates stays the same, and less in other government fees and taxes. That includes income tax, since you’ll be earning less. (As you can see below, the average Canadian household in which the designated “reference person” was aged 55-64 years in 2014 paid $18,220 in income tax. But when the “reference person” was aged 65 or older, average income tax payments dropped by more than half to $7,851.)

Average annual spending by Canadian households, by age of designated "reference person", Canada 2014

Average annual spending by Canadian households, by age of designated “reference person”, Canada 2014

The number of households in Manitoba (and throughout much of Canada) in which that “reference person” is one of those lower-spending 65-plus retirees is going to continue growing much faster than the number of younger, higher-spending households.

That’s going to put a bit of a squeeze on government finances, and on the businesses that sell those things on which spending drops the most in retirement: department and business-wear stores, restaurants, auto dealers, gas stations, realtors and so on.

Among the few areas where spending is higher among 65-plus households than it is among the 55-64s: direct health care costs, by $211 per year at the national level.

With that, the governments of the next 20 years will need to deal with a world where satisfying the dream of a balanced budget every year, no tax increases and no controversial cuts is an increasingly difficult task.

April 19 election likely to end NDP’s long run in office

On April 19, Manitobans will go to the polls to elect 57 members of the provincial Legislative Assembly. That election will either turn the governing NDP into an opposition party in the Legislature for the first time since 1999, or, in the unlikely event that it is re-elected, into a statistical oddball.

Governments go through a life cycle. They start off fresh and new, even exciting sometimes. But, the longer they live, the more battle-weary they become. Sometimes a periodic shake-up and the introduction of new faces prolongs their lives, as it did for the long-running Alberta Progressive Conservatives who governed that province continuously from 1971 to 2015.

More often, however, governments find themselves running into natural limits on how long they can govern before the public tires of them.

Where are those limits? To figure that out, I looked at the life span of 41 Canadian provincial governments entering office after Jan. 1, 1960, and which left office prior to Jan. 1, 2016. By “government”, I mean a continuous period of party-rule. Thus, the current NDP government in Manitoba would count as a single government, even though it has been led by two premiers: Gary Doer (1999-2009) and Greg Selinger (2009-present).

The average lifespan of a provincial government during that time was 9.8 years, dropping to 8.9 years if one excludes Alberta’s 43.7-year Progressive Conservative government as an anomaly. This suggests that a government enters a vulnerable period as it approaches a decade in power, a time when voters might be looking around for something fresh.

This is further supported by looking at the “middle 50%” of governments, by filtering out the shortest- and longest-lasting 25 percent on either side of the continuum. Continuing to exclude the Alberta PC Anomaly, only one-in-four governments lasted less than 6.1 years, while only another one-in-four lasted longer than 11 years. This points to the difficulty (though not impossibility) of knocking off a first-term government, and the rapidly declining odds of survival after a decade in office.

Now let’s look at the extremes.

With the Alberta PC Anomaly still excluded, the bottom five percent of governments lasted up to 3.9 years before being thrown out. This includes Pauline Marois’s ill-fated 2012-14 Parti Quebecois government in Quebec, and Dave Barrett’s 1972-75 NDP government in B.C. The once-powerful Union Nationale’s 1966-70 Quebec government also finishes just above the cut.

At the opposite extreme, the longest-living five percent of governments lasted 16.1 years in office, these being the Progressive Conservative governments that ran Newfoundland and Labrador from 1972 to 1989 and New Brunswick from 1970 to 1987. The 1991-2007 Saskatchewan NDP government finishes just slightly below the cut. (I’m still excluding the Alberta PC Anomaly, as you can see.)

If making it into the top five percent of government lifespans represents “extreme old age”, the Manitoba NDP government crossed that threshold in about mid-November 2015.

It should be cautioned that elections can produce surprises, and that even improbable events — as a fifth term for the Manitoba NDP government would be — still happen once in a while. But these events are just that: improbable.

If the NDP loses the April 19 election, as they likely will, its old age and the desire to refresh things a bit will have played as much of a role in its downfall as the provincial sales tax increase, the party’s internal discord, and its weakening of internal discipline since 2011; though the public’s feelings about the latter three things will determine how deep a cut it takes in its seat count, and the party’s odds of staging a comeback in four years.

And if it wins and becomes one of the top one percent of governments in terms of longevity? Well, hopefully you will have placed and won a bet, as the government will have beaten the odds in a way that few Canadian governments ever have.

The rising number of non-voters: Too much stress hormone, too little love hormone?

If you live here in Manitoba, there is a good chance that you returned home this week to find a “Sorry we missed you!” message hanging from your door knob courtesy of Elections Manitoba, whose enumerators have been out preparing the voters list for the April 19 provincial election.

As that date approaches, there will be not just plenty of discussion about the parties and the candidates, but also about the turnout. In the 2011 election, 56 percent of enumerated voters ended up casting a ballot, representing 46 percent of the province’s adult population.

Much of the discussion about the decline in voting has focused on voter apathy, busy modern lives and the possibility that more people would vote if they could do so more conveniently. But last May, this blog looked at a new angle unearthed by some accidentally obtained evidence: that making people think about politics is nearly as bad as unemployment in terms of making those people feel worse about their lives. To recap the findings of Angus Deaton from Princeton University’s Center for Health and Well-Being:

“People appear to dislike politics and politicians so much that prompting them to think about them has a very large downward effect on their assessment of their own lives . . . [T]he effect of asking the political questions on well-being is only a little less than the effect of someone becoming unemployed, so that to get the same effect on average well-being, three-quarters of the population would have to lose their jobs.”

More recently, I came across additional research that suggested that feelings of stress and of being under threat, either directly from others’ political activities or as part of life in general, could be a factor in lower voter turnout.

When people feel happy, secure and relaxed, their bodies are under the effect of a chemical called oxytocin, not to be confused with the similarly named drug oxycontin. Oxytocin is known as “the love hormone” for the role it plays in mood improvement and human bonding.

When they feel miserable, threatened and defensive, their bodies are conversely being flooded with cortisol. Cortisol is known as “the stress hormone” for its role in preparing the body for either a fight or to flee the situation.

Several years ago, five researchers from the University of Nebraska and Rice University performed an experiment to test the hypothesis that people with higher levels of cortisol in their system — the “fight or flight” chemical — were less likely to vote.

To do this, they collected saliva samples from more than 100 people before and after being put into a stressful situation, and then compared their cortisol levels to their actual (not just self-reported) involvement in political activities. Indeed, they found that people with higher levels of cortisol in their bodies were less likely to be voters:

“These analyses provide strong confirmation of our prediction that cortisol is inversely related with political participation . . . [and] that people with high levels of cortisol in non-political situations are significantly less likely to vote in elections. This effect is over and above the effects of standard demographic variables such as age, education, gender, and income, of political variables such as strength of partisanship, and of personality variables such as self-reported neuroticism.”

Thus, instead of “simply telling them that it is their civic duty to vote or browbeating them into joining civic organizations”, the authors suggest a “nuanced and targeted” approach:

“For some individuals, a lack of involvement in politics is traceable to insufficient resources (Verba, Scholzman, and Brady 1995) but for others the cause may be a physiological constitution that makes politics appear pointless and undeserving of the stress that is likely to accompany it.”

[. . .]

“To take a specific example, consider the intriguing finding that, on average, voter turnout increases if it is made likely that neighbors will find out whether an individual voted (Gerber, Green, and Larimer 2008). It may be that high cortisol individuals would be less easily shamed into going to the polls since their reason for not voting is unrelated to social shame—or a lack of resources, for that matter. The more general point is that specific strategies for enhancing turnout are likely to be differentially successful depending upon cortisol levels and other physiological data.”

But at the same time, they caution against trying to tamper with the human body:

“Politics is only one part of life and taking extreme steps to get people involved in politics may not be worth it if medical and psychological welfare is adversely affected . . . Cortisol levels are part of a complex, interrelating package of physiological variables. Altering one of these variables without considering the implications for physiology generally is likely to be a source of disruption and potential problems.”

Part of the puzzle of voter turnout might be to figure out a way to take the stress and sense of alarm out of politics; though this won’t be easy, as fear and pressure have long been vital (and shamelessly used) tools for politicians of all ideological stripes. But another possibility worth considering is the possibility that the level of voluntary voter turnout might be a partial indicator of whether a city, province, state or country is predominantly a snug-and-happy oxytocin-driven one, or a vulnerable-and-threatened cortisol-driven one.

The 2015 Canadian federal election: Do demographics tell the tale?

So, what happened on Oct. 19 to sweep Prime Minister Stephen Harper’s Conservatives from power, and install in their place a Liberal majority government led by Prime Minister-designate Justin Trudeau?

In an effort to figure that out, I stayed up late Friday night and into the early hours of Saturday morning, downloading data from the 2011 National Household Survey for 70 random federal constituencies — a little more than 20 percent of the total — based on their 2013 boundaries, and incorporated the latest Elections Canada vote counts.

Then, after getting some sleep, I used a common spreadsheet technique called the Pearson Correlation  — no relation to the former prime minister by that name — to measure the closeness of the relationship between each party’s vote count in those 70 constituencies and different aspects of their demographic composition. The Pearson Correlation uses a scale from -1.00 to +1.00. The closer the correlation is to the extreme ends of the scale, the tighter the apparent relationship.

What jumps out about the Liberal Party is the way in which it tended to do better in constituencies with larger concentrations of university graduates, suggesting the possibility that either this was a group that felt particularly attracted to the Liberals, or just more averse to the other parties.

A solid relationship also seems to exist between the size of the Liberal vote and the number of residents being of various Middle Eastern ancestries, and the finance and insurance sector workforce in the area.

On the other hand, agricultural or resource sector employment, and trades training, seemed to have a negative effect on the size of the Liberal vote, suggesting lingering memories of Pierre Trudeau’s strained relations with these groups continues to have an effect. Some might be surprised to hear that the size of the local Indigenous community tended to have a negative effect on the size of the Liberal vote.

The Conservative vote tended to be higher in constituencies with larger Western and Northern European ancestry populations, and in those with larger non-Catholic Christian populations, recalling Mr. Harper’s comments about “old-stock Canadians”. Yet the Conservatives also tended to do better when the number of constituents of Eastern European ancestry was larger, suggesting the Conservatives’ core messages might resonate well with these groups. Unsurprisingly, larger concentrations of six-digit income households, and of management occupations, also tended to be associated with a larger Conservative vote.

The size of the French-speaking population in a riding stood out as being the factor most negatively associated with the size of the Conservative vote, as did the size of the local Catholic population, suggesting the Conservatives might need to make amends to both as it moves into the post-Harper era.  Unsurprisingly, the concentration of low-income households also appeared to have a depressing effect on the Conservative vote.

As for the NDP, virtually everything that seemed to work to their candidates’ favour, and to their detriment, was related directly or indirectly to income. The NDP tended to do better in constituencies with larger numbers of households earning less than $60,000; and their fortunes seemed to be particularly well-tied to the concentration of households in the $10,000 to $14,999 range. But higher incomes, larger average family sizes and higher rental housing costs and home sizes appeared to depress the NDP vote.

The Bloc Québécois tended to do better in constituencies with higher concentrations of born-and-raised Quebeckers, and worse in those with larger immigrant communities, following a long-standing fault line in Québécois politics. Larger concentrations of trades workers and health care workers also seemed to work a little bit to the BQ’s favour, suggesting this is a party with some of the working-class appeal traditionally associated with the NDP in the rest of Canada.

One of the curiosities of the Green vote is that it seems to be positively associated with the size of the Danish and Finnish-speaking populations: a spurious correlation, or a sign that this party that has often expressed Nordic sentiments has some appeal to those with Nordic roots? The Green vote also seems to be higher when the concentration of people with no religious affiliation is higher, which might be counterintuitive given leader Elizabeth May’s well-known Christian faith, but perhaps less so if one sees the Greens as the freethinkers of Canadian politics, averse to the demands of loyalty and conformity that have traditionally shaped Canadian political parties.

And finally, the vote itself. Voter turnout tended to rise with average and median incomes, and to be lower in constituencies with relatively high concentrations of social benefits recipients and people with very low levels of formal education. While low voter turnout is often assumed to be a “youth problem”, it also appears to be a “poverty problem”.

If you are one of those rare people who gets a kick out of scanning through a table full of correlations, feel free to go nuts here.

 

Constituencies included: Abitibi Temiscamingue, Acadie Bathurst, Ajax, Alfred-Pellan, Algoma-Manitoulin-Kapuskasing, Aurora-Oak Ridges-Richmond Hill, Barrie-Innisfil, Barrie Springwater, Battlefords-Lloydminster, Beausejour, Berthier-Maskinonge, Bow River, Brampton East, Brampton North, Brandon-Souris, Brome-Missisquoi, Burlington, Calgary-Shepard, Calgary Signal Hill, Cariboo-Prince George, , Chicoutimi-le-Fjord, Cowichan Malahat, Dartmouth-Cole Harbour, Don Valley West, Edmonton Mill Woods, Elgin-Middlesex-London, Essex, Etobicoke Centre, Grande Prairie-Mackenzie, Haliburton-Kawartha Lakes, Hull-Aylmer, Humber River-Black Creek, Joliette, Kamloops-Thompson-Cariboo, Laurier-Sainte Marie, Lethbridge, London North Centre, London West, Madawaska, Marc-Aurele-Fortin, Mirabel, Mississauga Lakeshore, Mississauga-Malton, Montmagny, Nanaimo Ladysmith, Nepean, New Brunswick Southwest, Newmarket-Aurora, Niagara West, Oakville-North Burlington, Oshawa, Ottawa Centre, Parry Sound-Muskoka, Port Moody-Coquitlam, Regina Lewvan, Repentigny, Richmond Centre, Rosemont-la-Petite-Patrie, Sackville-Preston, Saskatoon University, St. Boniface-St. Vital, Therese-de-Blainville, Toronto Danforth, Vancouver East, Vaudreuil-Soulanges, Vimy, Whitby, Winnipeg North, York Centre, and Yorkton-Melville.