Listen to song of freedom
Nova Scotia: I love you, but smarten up
Dear Nova Scotia,
I write today with a heavy heart. Because despite your beauty and your many charms, this is no love note. Nova Scotia, it's time someone told you to pull up your socks and get to work.
You see, people are figuring you out, my sainted Nova Scotia. They're seeing that you are unproductive, dependent on government money and pretty darn complacent. This has to change.
Consider the evidence from the Fraser Institute, an organization often unfairly tossed off as a "right-wing think tank." Whatever its inclination, it ranks Nova Scotia near the bottom among Canadian provinces and U.S. states on economic output and labour productivity.
The Fraser report compares economies in 60 jurisdictions, looking at what they produce and how well they produce it, the role of government versus private enterprise, at employment rates and investment among other measures. It found, dear Nova Scotia, that you are a productivity laggard.
So what's wrong? Well, it's partly that you have too many unionized government workers earning too much money for too little output. Because of that, you have a hard time attracting business and investment. That, in turn, means you have a hard time creating jobs.
Oh Nova Scotia, I can hear you already: "Who cares what economists think? We like our big government and our subsidies." With that attitude, gentle province, you are doomed.
The Fraser Institute study ranked you near the bottom in almost every measure of productivity. You are 59th out of 60 in average productivity per worker. Only Prince Edward Island is worse. At an average of 8.2 per cent, your unemployment rate is 56th out of 60.
And more than a quarter of your citizens who do work, work for federal, provincial or municipal governments. Most of those workers are unionized, with wage rates, pensions and benefits much higher than those in the private sector. That means that compared to your competitors, you have too many people doing administrative duties and too few producing goods and services.
And what does that mean, Nova Scotia? It means companies don't want to invest in you because they have to compete with government for workers. Of course, governments can tap taxpayers for high wage rates and deluxe benefits. Private companies can't, and that's why you have zero private-sector employment growth. Zero.
And you are shameless, Nova Scotia. Even with "restraint" as a buzzword for the current NDP government, the civil service got a wage increase and job security guarantees in its latest contract without any corresponding promise to improve productivity.
You don't have to be a right-wing think tank to put the rest of the equation together. Lack of business investment means fewer people have job options in the private sector. Fewer options means more young Nova Scotians go elsewhere seeking economic opportunity, draining our cities, towns and countryside of ideas and energy.
With government playing such a dominant role in the labour market, too many of our workers are employed enforcing regulations, collecting taxes and supervising the folks in the private sector who are actually producing goods and services. That is not healthy and probably not sustainable.
Yes, Nova Scotia, your massive public sector helped cushion you from the worst of the last recession. But what if some future government decides it doesn't need such a big navy? What if it needs fewer people to administer a shrinking fishery? What if governments make tax collection more efficient, or build fewer roads, or simplify regulations?
The answer is: You are in deep trouble and unless things change, you won't have many options to dig yourself out.
Nova Scotia, I'm happy for your well-paid-and-pensioned public servants. That 25 or so per cent of the population is in good shape and will continue to be into retirement. But what about the other 75 per cent, those folks who have to face off against global competition to earn a living?
You better think about that, Nova Scotia, for your own good. Get creative, work harder, be entrepreneurial and stop looking for handouts.
Hey, I told you this was no love note.