In-migration key to Alberta's inflation fight | Troy Media Corporation - 0 views
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Labour costs can’t be avoided Why are local labour markets key to containing inflation? When demand picks up in Alberta, imported goods can simply be ramped up as well. The cost of a Toyota didn’t change significantly in ’08, for instance. Conversely, the cost of a haircut, building a high-rise or an up-grader all increased substantially. High labour costs for non-tradable goods and services simply can’t be avoided.
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We’re not yet at the point where the Alberta labour market is strained because natural gas is still down and governments have cut back so the added activity can likely be accommodated without causing wages to spike. Unfortunately, that can change quickly. Thankfully, while confederacy doesn’t always lead to an optimal interest rate for western Canada, it does provide a pressure release valve through inter-provincial migration.
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People relocate for a variety of reasons (family, education, etc.), but, typically, there are three main economic drivers: wages, cost of living and the unemployment rate, which are all linked to one another. For instance, what’s the point of having a higher average wage if it is entirely eaten up by higher living expenses, and wages might be higher in another province, but if they’re not hiring there’s not much point relocating.
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