Economists, standard of living and happiness

Should we maintain the inflation target and reorganize immigration? How to stimulate innovation and productivity? And where does happiness fit into all this?


Posted at 1:03 a.m.

Updated at 6:30 a.m.

These are the kinds of questions debated at a conference on the economy at UQAM on Friday, May 3, organized in honor of three eminent economists from this university, namely Pierre Fortin, Steve Ambler and Louis Phaneuf.

The three retired professors were treated to a concert of praise and in particular to a speech tinged with humor from Eric Girard, holder of a master’s degree in economics from UQAM. The Minister of Finance praised the great popularizing qualities of Pierre Fortin, among others, but remembers with fear his very difficult exams in advanced macroeconomics…

In his presentation, Pierre Fortin recalled the great progress made by Quebec since the Quiet Revolution. In 1960, 66% of Quebecers aged 25 to 44 did not have a high school diploma, compared to only 7% today.

Quebec’s unemployment rate declined to become 1.5 percentage points lower than Ontario’s, while it often exceeded the neighboring province by 3 percentage points between 1955 and 1990.

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    PHOTO JEAN-FRANÇOIS HAMELIN, PROVIDED BY UQAM

    Dalibor Stevanovic, professor, Steven Ambler, professor emeritus of the economic sciences department of ESG UQAM, Stéphane Pallage, rector of UQAM, Eric Girard, Minister of Finance and graduate of ESG UQAM, Pierre Fortin, professor emeritus, Raquel Fonseca, professor, and Julien Frédéric Martin, professor in the economics department of ESG UQAM

  • >Steven Ambler, professor emeritus of the economics department of ESG UQAM>

    PHOTO JEAN-FRANÇOIS HAMELIN, PROVIDED BY UQAM

    Steven Ambler, professor emeritus of the economics department of ESG UQAM

  • >Economist Pierre Fortin, professor emeritus in the economics department of ESG UQAM>

    PHOTO JEAN-FRANÇOIS HAMELIN, PROVIDED BY UQAM

    Economist Pierre Fortin, professor emeritus in the economics department of ESG UQAM

  • >Professor Emeritus Louis Phaneuf>

    PHOTO PROVIDED BY UQAM

    Professor Emeritus Louis Phaneuf

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The economist recalls that Quebec is less unequal than Ontario or the United States and that Quebecers sit in 6e world ranking on the happiness index. And according to his estimates, Quebec recently surpassed Ontario by 3% in terms of standard of living if we take purchasing power into account, while the gap was unfavorable 16% in 1985.

“We are not as pocket-sized as is often said, but let’s avoid being jovial,” said Pierre Fortin, known for his work on the minimum wage, daycares and immigration, and whom several political decision-makers have consulted. for five decades.

Another economist from UQAM, Philip Merrigan, however, came to highlight our large gap in living standards with the United States, measured by GDP per capita. In 1990, the difference between Canada and the United States was 20%, but today it is 40%.

However, this gap has been small and stable with France and the United Kingdom for 50 years.

Another economist speaker, Henri-Paul Rousseau, intervened to argue that income disparities must also be taken into account in the portrait. In the United States, a small percentage of wealthy people significantly raises the average standard of living, he says.

Let’s innovate, please!

Philip Merrigan recalls Canada’s delays in research and development. Here, R&D spending represents 1.7% of GDP, compared to around 3% in France and 3.5% in the United States. The delay is all the more distressing since research favors countries with a high level of education, such as Canada.

During the question period, a consultant in the room, Denis Gauvreau, denounced the weakness of innovation in Quebec and Canada, which he described as appalling.

According to this author of a recent report on the subject, there is a lot of work to be done on the transfer of innovation from universities to businesses, in particular. And the tax advantages, which have a limited effect, should be better captured by small and medium-sized businesses.

According to economist Philip Merrigan, moreover, immigration has jumped 17.9% since 2010 in Canada compared to 8.2% in the United States. Pierre Fortin later reiterated that he considered this surge in immigration to Canada to be uncontrolled, a surge that could have a negative impact on the population’s standard of living.

“Before, there was selective immigration. But with temporary immigration, it is now businesses and colleges and universities that decide who comes and who goes,” said Pierre Fortin.

“Quebec is getting younger faster”

For his part, the economist Pierre-Carl Michaud, a former Uqamian who returned to HEC Montreal, questioned the neglected productivity of a sector which nevertheless monopolizes 42% of GDP: the public sector.

Will the recent increase in public sector salaries have an effect on the quality and quantity of services? This was not the case with the increase in doctors’ remuneration between 2000 and 2016, he notes. And now ?

In addition to remuneration, there is the organization of services. He estimates that with the same future budget, the state could quadruple home care services for seniors, for example. Every dollar must therefore be invested wisely.1

That said, how can we properly measure productivity among the public, given the absence of profits? What if we took the long-term happiness rate? Or even life expectancy, for which our public services are partly responsible?

Since the 1970s, life expectancy has increased considerably, a sign of our successes. So much so that today, a 50-year-old Quebecer has the same life expectancy as a 41-year-old in 1970. In a way, we can say that 50-year-old Quebecers today are as young as those who, in 1970, were 41 years old!

This biological equivalent of 41 years in Quebec exceeds 44 years in the provinces of Saskatchewan, Manitoba and Newfoundland and Labrador, while British Columbia is a little above 42 years and Ontario, a little down.

In short, “Quebec is getting younger more quickly,” says Pierre-Carl Michaud. This biological advantage of Quebec over Ontario is approximately one year. And since the value of one year of life is $250,000…

1. Read “Four times more services for the same bill”

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