Chapter 8 : Stability Policy

Inflation Cools Slightly in March

Summary

This article talks about inflation and how it effects gas prices. Consumer prices had an annual inflation of 1.4% over a 1 year interval ending in March 2010. Gas pump prices were 17.2% higher in March than a year before. Crude oil prices have risen at least one third since 2009. The average price for a barrel of oil costs $69.85 USD compared to $53.48 USD from the previous year. Overall, for energy prices, it rose by 5.8% compared to the previous year in March. Canadians also paid more for foods, cars, household communications while mortgage interest, natural gas, clothing and footwear all declined in prices. Overall, Canada's economy has been growing at a rapid pace which forced the Bank of Canada to increase interest rates to control inflation.

Connection:

The connection to this article and chapter 8 is inflation. The Bank of Canada controls inflation by increasing interest rates. This is an example of the monetary policy because the Bank of Canada is using interest rates to stabilize the economy from rapid growth. This decision from the Bank of Canada shows that inflation in Canada is becoming an issue to the economy and needs to be controlled by increasing interest rates. This means that an increase in interest would result in an increase in price. With this increase in prices, supply would increase due to a drop in demand from the increased price for goods and services. This would result in inflation decreasing.

Reflection:

As we can see from this article, Canada's economy is doing fine due to the fact that our inflation needs to be controlled. We are most likely out of the recession because of the way people are spending again. During the recession, people didn't want to spend much money on goods and services because of unemployment. It was hard to find a job during the recsession and now, people are spending money to the point where inflation in Canada needs to be controlled by the increase of interest rates from the Bank of Canada. I feel that this is a good idea of how the Bank of Canada is using the monetary policy to control the inflation. But there needs to be a balance for the interest rates. If the interest rates stay too high, it will drag consumers away from goods, but if it stays too low, it would increase inflation.

Source:
http://www.cbc.ca/money/story/2010/04/23/inflation-rate.html

Chapter 5 : Economic Indicators

B.C.'s minimum-wage workers are falling further behind

Summary:

This article talks about how British Columbia is the only province in Canada with a frozen minimum wage. Workers in Nova Scotia recieved an increase for minimum wages 24 hours after Ontario recieved an increase on their minimum wage. Currently, Ontario's minimum wage is the nation's leading with $10.25. British Columbia is currently at the lowest with $8 for minimum wage. As British Columbia's minimum wage remains frozen, the average wage of workers has risen to 21% before inflation of about 17%. The same inflation is limiting British Columbian's spending power. The Government and many employers argued about raising minimum wages. Employers state that raising minimum wages would hurt the ones that should be helped because this would reduce people being hired. It was expected that youth unemployment would have decreased in British Columbia relative to those that have increased. British Columbia's youth unemployemnt rate fell before the recession, but risen back when the Liberals took office. The one thing that seems to be floating around is that minimum wage will increase not unless British Columbia abandons any government that mandated floor for employers. The longer the Goverment keeps British Columbia's minimum wage frozen, the harder life gets for those who make that much.

Connections:
The connection to this article and chapter 5 is inflation and unemployment. There is currently a dispute whether British Columbia should receive an increase in minimum wage or not. Due to the current recession and inflation, this would impact unemployment rates greatly because if there were to be a raise in minimum wages, it would cost the employer more money to hire an employee so hiring people would decrease. Some employwers may end up laying off people because they can't afford to pay their employees. if this happens, poverty in British Columbia would increase.

Reflection:
In my opinion on this article, I think that the Government should take action and raise the minimum wage in British Columbia, by a reasonable amount that employers can handle. This would help the economy better because this would give workers a little more money to spend, making their lives easier. Youth unemployment rates would most likely stay the same because there is only a little change in the minimum wage, which would impact employers slightly so they don't lay off employees.

Source:
http://www.vancouversun.com/business/minimum+wage+workers+falling+further+behind/2752317/story.html