Inflation may be the focus of a midterm cycle political blame game, but economists caution the problem — and the most effective solutions — are global.
Rising prices were a focus of this week’s meeting of the Group of Seven (G-7) major economies.
The White House said Tuesday it is investing $760 million to combat the effects of high food, fuel and fertilizer prices, and the European Council said the war in Ukraine is leading to steep price increases and that the G-7 needs to “assist the global economy.”
“We are united and determined to strongly support Ukraine in producing and exporting grain, oil, and other agricultural products and we will foster coordinated initiatives that promote global food security and address the causes of the evolving global food crisis,” the council said.
In the U.S., inflation stands at a 40-year high of 8.6 percent, weighing on personal expenses and effectively making people poorer.
Around the world, it is sparking protest movements, driven by a soaring cost of living felt in the price of goods like food and gasoline.
In the United Kingdom, where inflation is higher than it is in the U.S. — above 9 percent — the biggest rail strike in 30 years has disrupted travel around the country and seen tens of thousands of workers walk off the job demanding more pay. There are also concerns that the rail strike could be the first of many in the country.
U.K. rail union members “are leading the way for all workers in this country who are sick and tired of having their pay and conditions slashed by a mixture of big business profits and government policy,” union head Mick Lynch said in a statement last week, adding that his group was seeking a “decent pay rise.”
In South Korea, where inflation surpassed 5 percent for the first time in more than a decade, truckers reached a deal with the government earlier this month after a weeklong strike to get a minimum pay guarantee. This led to production cuts by South Korean steel producer POSCO as well as automaker Hyundai, which said sales are facing “unfavorable external environments.”
Inflation has also hit a decades-high 5.2 percent in France, where there are concerns over whether there will be a resurgence of the Gilets Jaunes, or Yellow Vest, grassroots protest movement this fall.
Over the past few months, economic- and inflation-related protests have been reported in India, Ecuador, Indonesia, Ireland, Tunisia, Sri Lanka and Peru, where the government imposed a curfew and enacted various emergency measures after demonstrations turned violent earlier this year.
“Inflation is not just in the U.S. or in Europe, but it’s also in developing countries — it’s almost everywhere,” Hamid Rashid, head of the global economic monitoring branch of the United Nations Department of Economic and Social Affairs, said in an interview.
This ubiquity means that workers in numerous countries with varying political systems and social dynamics are pushing in the same direction, putting pressure on global labor markets that many central banks are hoping to see loosen.
In the U.S., having a looser labor market, or slightly higher unemployment, would take some of the pressure off companies to keep raising their prices in order to turn a profit for their investors, some economists argue.
But with more than 11 million open jobs and unemployment levels in the U.S. at 3.6 percent — which is still not as low as the pre-pandemic level of 3.5 percent — a looser labor market may just not be in the cards.
This means that the “supply-side interventions” — measures aimed at specific industries and pipeline bottlenecks, such as those in the shipping industry — that some economists are recommending to fight inflation may not be as effective as policymakers in the U.S. or around the world hope.
“When we think of the supply side, we tend to focus on supply chains. Supply chains are part of the supply side, but the most important element of the supply side is the labor supply,” Rashid said. “There are a lot of uncertainties in the labor supply, and that compounds a lot of supply chain issues, from packaging to transportation to warehouses to port clearance. Don’t underestimate the role that labor supply plays in most economies.”
With the tight job market in the U.S. and workers able to demand higher pay both here and in other countries, the global supply side of the economy may take a while to sync up.
That’s why economists are seeing increased international cooperation as an important additional measure in the fight against inflation. This cooperation can take many forms, including coordinated central bank policies, conforming regulatory frameworks and supply chain improvements.
One unexpected source of cooperation, at least among Western powers, has been the war in Ukraine, which economists note has brought the G-7 much closer together.
“Why do we have this cooperation happening right now? First, recognize really it’s Western cooperation. The G-7 is really leading this,” Abraham Newman, a professor in the Walsh School of Foreign Service at Georgetown University, said during an online event on economic globalization hosted by the Brookings Institution. “Within the G-7, you just see this complete belief that this is a legitimate exercise.”
Despite the global nature of inflation, the war of words between Democrats and Republicans over who is to blame for the high cost of living rages on.
“The White House and congressional Democrats are in denial about how their policies fueled inflation,” House Republicans on the tax-writing Ways and Means Committee said in a statement Monday, referring to the Biden administration’s $1.9 trillion stimulus package.
A study from the San Francisco Federal Reserve found in March that direct fiscal stimulus related to the pandemic — which went out under both the Trump and Biden administrations — “may have contributed to about 3 percentage points of the rise in U.S. inflation through the end of 2021.”
Democrats, meanwhile, have been focusing on corporate price gouging and market concentration in the private sector as drivers of inflation. President Biden earlier this month railed against oil companies for profiting while gas prices soared.
And Sen. Bernie Sanders (I-Vt.) introduced a bill in March that would tax windfall profits of corporations, a similar measure to ones enacted during the 20th century in times of war.
“The American people are sick and tired of the unprecedented corporate greed that exists all over this country. They are sick and tired of being ripped-off by corporations making record-breaking profits while working families are forced to pay outrageously high prices for gas, rent, food, and prescription drugs,” Sanders said.
Regardless of whether inflation is a global issue, Americans expect action on the inflation front and are likely to express that expectation at the polls in November.
A NewsNation-DDHQ poll released last week found 97 percent of U.S. voters are very or somewhat concerned about inflation and inflation ranks as the top issue for 72 percent.
Moe is set to speak in the city of Yorkton about affordability measures this morning before travelling to the nearby village of Theodore for an event with the local Saskatchewan Party candidate.
NDP Leader Carla Beck doesn’t have any events scheduled, though several party candidates are to hold press conferences.
On Thursday, Moe promised a directive banning “biological boys” from using school changing rooms with “biological girls” if re-elected.
The NDP said the Saskatchewan Party was punching down on vulnerable children.
Election day is Oct. 28.
This report by The Canadian Press was first published Oct. 18, 2024.
REGINA – Saskatchewan Party Leader Scott Moe is promising a directive banning “biological boys” from using school changing rooms with “biological girls” if re-elected, a move the NDP’s Carla Beck says weaponizes vulnerable kids.
Moe made the pledge Thursday at a campaign stop in Regina. He said it was in response to a complaint that two biological males had changed for gym class with girls at a school in southeast Saskatchewan.
He said the ban would be his first order of business if he’s voted again as premier on Oct. 28.
It was not previously included in his party’s campaign platform document.
“I’ll be very clear, there will be a directive that would come from the minister of education that would say that biological boys will not be in the change room with biological girls,” Moe said.
He added school divisions should already have change room policies, but a provincial directive would ensure all have the rule in place.
Asked about the rights of gender-diverse youth, Moe said other children also have rights.
“What about the rights of all the other girls that are changing in that very change room? They have rights as well,” he said, followed by cheers and claps.
The complaint was made at a school with the Prairie Valley School Division. The division said in a statement it doesn’t comment on specific situations that could jeopardize student privacy and safety.
“We believe all students should have the opportunity to learn and grow in a safe and welcoming learning environment,” it said.
“Our policies and procedures align with the Canadian Charter of Rights and Freedoms, the Canadian Human Rights Act and the Saskatchewan Human Rights Code.”
Asked about Moe’s proposal, Beck said it would make vulnerable kids more vulnerable.
Moe is desperate to stoke fear and division after having a bad night during Wednesday’s televised leaders’ debate, she said.
“Saskatchewan people, when we’re at our best, are people that come together and deliver results, not divisive, ugly politics like we’ve seen time and again from Scott Moe and the Sask. Party,” Beck said.
“If you see leaders holding so much power choosing to punch down on vulnerable kids, that tells you everything you need to know about them.”
Beck said voters have more pressing education issues on their minds, including the need for smaller classrooms, more teaching staff and increased supports for students.
People also want better health care and to be able to afford gas and groceries, she added.
“We don’t have to agree to understand Saskatchewan people deserve better,” Beck said.
The Saskatchewan Party government passed legislation last year that requires parents consent to children under 16 using different names or pronouns at school.
The law has faced backlash from some LGBTQ+ advocates, who argue it violates Charter rights and could cause teachers to out or misgender children.
Beck has said if elected her party would repeal that legislation.
Heather Kuttai, a former commissioner with the Saskatchewan Human Rights Commission who resigned last year in protest of the law, said Moe is trying to sway right-wing voters.
She said a change room directive would put more pressure on teachers who already don’t have enough educational support.
“It sounds like desperation to me,” she said.
“It sounds like Scott Moe is nervous about the election and is turning to homophobic and transphobic rhetoric to appeal to far-right voters.
“It’s divisive politics, which is a shame.”
She said she worries about the future of gender-affirming care in a province that once led in human rights.
“We’re the kind of people who dig each other out of snowbanks and not spew hatred about each other,” she said. “At least that’s what I want to still believe.”
Also Thursday, two former Saskatchewan Party government members announced they’re endorsing Beck — Mark Docherty, who retired last year and was a Speaker, and Glen Hart, who retired in 2020.
Ian Hanna, a speech writer and senior political adviser to former Saskatchewan Party premier Brad Wall, also endorsed Beck.
Earlier in the campaign, Beck received support from former Speaker Randy Weekes, who quit the Saskatchewan Party earlier this year after accusing caucus members of bullying.
This report by The Canadian Press was first published Oct. 17, 2024.
REGINA – Saskatchewan‘s provincial election is on Oct. 28. Here’s a look at some of the campaign promises made by the two major parties:
Saskatchewan Party
— Continue withholding federal carbon levy payments to Ottawa on natural gas until the end of 2025.
— Reduce personal income tax rates over four years; a family of four would save $3,400.
— Double the Active Families Benefit to $300 per child per year and the benefit for children with disabilities to $400 a year.
— Direct all school divisions to ban “biological boys” from girls’ change rooms in schools.
— Increase the First-Time Homebuyers Tax Credit to $15,000 from $10,000.
— Reintroduce the Home Renovation Tax Credit, allowing homeowners to claim up to $4,000 in renovation costs on their income taxes; seniors could claim up to $5,000.
— Extend coverage for insulin pumps and diabetes supplies to seniors and young adults
— Provide a 50 per cent refundable tax credit — up to $10,000 — to help cover the cost of a first fertility treatment.
— Hire 100 new municipal officers and 70 more officers with the Saskatchewan Marshals Service.
— Amend legislation to provide police with more authority to address intoxication, vandalism and disturbances on public property.
— Platform cost of $1.2 billion, with deficits in the first three years and a small surplus in 2027.
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NDP
— Pause the 15-cent-a-litre gas tax for six months, saving an average family about $350.
— Remove the provincial sales tax from children’s clothes and ready-to-eat grocery items like rotisserie chickens and granola bars.
— Pass legislation to limit how often and how much landlords can raise rent.
— Repeal the law that requires parental consent when children under 16 want to change their names or pronouns at school.
— Launch a provincewide school nutrition program.
— Build more schools and reduce classroom sizes.
— Hire 800 front-line health-care workers in areas most in need.
— Launch an accountability commission to investigate cost overruns for government projects.
— Scrap the marshals service.
— Hire 100 Mounties and expand detox services.
— Platform cost of $3.5 billion, with small deficits in the first three years and a small surplus in the fourth year.
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This report by The Canadian Press was first published Oct .17, 2024.
