Winnipeg Free Press

Winnipeg Free Press (Newspaper) - March 14, 2022, Winnipeg, Manitoba C M Y K PAGE A3 Award winning journalism every Saturday from the people who know Manitoba. TOP NEWS ASSOCIATE EDITOR, NEWS: STACEY THIDRICKSON: 204-697-7292 ● CITY.DESK@FREEPRESS.MB.CA ● WINNIPEGFREEPRESS.COM A3 MONDAY MARCH 14, 2022 Path to reducing income inequality seen T HERE may be a silver lining to the black pandemic cloud hanging over a province stunned by soar- ing prices and unfamiliar inflation. Manitoba is in a position to reverse 40 years of worsening income inequal- ity — if the Bank of Canada and gov- ernments are willing, says a report by University of Manitoba economics and labour studies assistant professor Jesse Hajer. Raising interest rates and cutting government deficit spending to curtail inflation to pre-pandemic levels won’t be very effective in the short run, and would jeopardize the economic recov- ery, says the report Understanding In- flation and the Rising Cost of Living in Manitoba. Year-over-year inflation in Janu- ary was 5.5 per cent in Manitoba: food prices increased 5.1 per cent, shelter costs went up 7.6 per cent and gas prices rose 34.5 per cent. In addition energy costs skyrocketed 22.6 per cent and the price of goods rose 7.1 per cent. There are many reasons for the re- cent increase in inflation but most are related to the pandemic and are likely temporary, says the 48-page report, which was prepared for the Canadian Centre for Policy Alternatives in Mani- toba. Prices are catching up after a year of very low inflation due to the pandemic recession. Public health restrictions and reduced economic activity kept a lid on prices in 2020, as did the Mani- toba government’s order to freeze resi- dential rents at the time. Plummeting global demand meant the price of gasoline in Manitoba fell by nearly 14 per cent in 2020 compared to 2019, and energy prices overall fell by 8.4 per cent. The overall inflation rate in 2020 was 0.5 per cent — the lowest annual rate of inflation recorded in Manitoba, Sta- tistics Canada data show. That follows a 30-year stretch of relatively low and stable inflation. Many people lost their jobs in the ear- ly part of the pandemic, but the federal government responded with unpreced- ented income supports and other aid to households, businesses and organiza- tions. Incomes increased in 2020 and in- equality decreased, despite record job losses and low-wage earners dispropor- tionately losing paid work. Disposable household incomes in- creased by 10.4 per cent in 2020 relative to 2019, the largest margin of increase in at least 20 years, the report said. The combination of higher income and savings, the risk of working dur- ing an evolving pandemic, along with surging demand have given workers greater bargaining power in the labour market, with wages increasing faster than the overall price level. During the first year of the pandemic, average and median wages in Manitoba increased rapidly, with annual increases in 2020 ranging from 4.6 per cent to 8.1 per cent. Over the two years of the pandemic, wage growth on average has made up for the rise in prices with real wage gains for workers that’s been driven by strong economic growth and increasing competition for workers — and not just those who are highly skilled. New employees and low-income work- ers in lower-skilled work in Canada have made the biggest wage gains, and that’s helping to reduce income inequal- ity, the report says. Manitobans on fixed incomes and lower-income households have been hit the hardest by rising prices and infla- tion. The report recommends targeted options for government policy, such as indexing provincial income program benefits that aren’t geared to rise with inflation. Broadening the public provision of essential goods and services — in sec- tors such as telecommunications, inter- net and mobile phone service providers where a lack of competition can lead to price gouging — is another way to sus- tain the recovery and reduce income disparity, the report says. Ahead of a provincial budget ex- pected next month, it’s calling on labour unions and consumer and community groups that work with lower-income households to advocate for progressive policies that address inflation. “These changes will not only help ad- dress short-term concerns regarding the cost of living, but will lead to sustained affordability and improved equity while improving economic efficiency over the long run,” the report says. Premier Heather Stefanson has said Manitobans can expect the provincial budget to have a deficit and include more help for people and businesses affected by the pandemic. Her Pro- gressive Conservative government is proceeding cautiously in light of the pandemic and potential economic fall- out from the war in Ukraine, she said. The goal is to balance Manitoba’s books by 2028. carol.sanders@freepress.mb.ca Report warns against raising interest rates, cutting deficits CAROL SANDERS JOHN WOODS / WINNIPEG FREE PRESS FILES Food prices increased 5.1 per cent in Manitoba year-over-year in January. A Canadian Centre for Policy Alternatives in Manitoba report says inflationary causes are likely temporary. CHELSEA KEMP / THE BRANDON SUN FILEES Energy costs skyrocketed 22.6 per cent year-over-year in January. COVID-19 AT A GLANCE MANITOBA Confirmed: 132,681 Recovered: 125,913 Deaths: 1,710 Active: 5,580 (As of Friday at 12:30 p.m.) CANADA Confirmed: 3,349,647 Recovered: 3,200,664 Deaths: 37,229 Active: 111,754 (As of Friday at 8 a.m.) The latest: ● China’s government responded Sunday to a spike in coronavirus infections by shutting down its southern business center of Shenzhen, a city of 17.5 million people, and restricted access to Shanghai by suspending bus service. Everyone in Shenzhen, a finance and technology center that abuts Hong Kong, will undergo three rounds of testing after 60 new cases were reported Sunday. All businesses except those that supply food, fuel and other necessities were ordered to close or work from home. Case numbers in China’s latest infection surge are low compared with other coun- tries and with Hong Kong, which reported more than 32,000 on Sunday. But mainland authorities are enforcing a “zero tolerance” strategy and have locked down entire cities to find and isolate every infected person. ● As the COVID-19 pandemic stretches into a third year,many experts are expressing cautious optimism that Canada has passed the need for lockdowns and the widespread safety protocols that marked much of the last 24 months. But after two years of dealing with an unpredictable virus, they also say we should be ready to adapt at any moment. Jurisdictions began lifting public health measures over the last month, axing gathering limits, vaccine passports and mask mandates. Several pandemic anniversaries are at hand this week as many Canadians reflect on the events from March 2020 that changed the perception of the virus from a faraway unknown into a real threat in North America. Vaccine eligibility: ● First- and second-dose vaccinations are available for all Manitobans over five years of age. Third dose shots are now available to all Manitoba adults. Check eligibility criteria and recommended time frames between doses at wfp.to/eligibility. Appointments can be booked online at wfp.to/ bookvaccine or by calling 1-844-626-8222. Quote: “The history of COVID-19 tells us we should be preparing for the potential of another variant of concern…. Let’s at least be appreciative that we’ve been in this situation before. None of us want to take a step forward and end up having to take five or 10 steps backwards because we get hit with what comes next.” — U of M virologist Jason Kindrachuk on how the COVID-19 crisis can’t be considered over until it subsides across the globe, though hospitalizations and other pandemic markers appear to have dipped or stabilized throughout Canada A_03_Mar-14-22_FP_01.indd 3 2022-03-13 8:42 PM ;