AltAusterity Digest #15 September 21-27, 2017

In TD Bank’s economic assessment released Tuesday, it estimated increasing Ontario’s hourly minimum wage to $15 could cost the province up to 90,000 jobs. TD did admit raising the minimum wage could have certain social benefits, but argued that the speed and timing of the implementation within the economic cycle would negatively impact Ontario employment. The Province’s Financial Accountability Office estimated 50,000 jobs could be lost in comparison to the TD estimates.

The German finance minister Wolfgang Schauble is stepping down from his post to reportedly become speaker of the German Parliament. Mr. Schauble was a leading figure in demanding deep budget cuts during the Eurozone crisis. While Ms. Merkel’s CDU/CSU bloc emerged as the largest party after Sunday’s federal elections, they did not meet expectations for their share of the vote, requiring a coalition with the economically liberal FDP and the Greens.

The damage to Puerto Rico from Hurricanes Irma and Maria is perhaps the worst in a century. The “unincorporated territory of the US” has been left economically incapable of dealing with the crisis due to the island’s debt crisis, leading to calls for privatization. The privatization drives would largely entail utilities and natural resources. The decisions are controlled by the federal fiscal control board – created by PROMESA (the Puerto Rico Oversight, Management and Economic Stability Act) – made up of seven members who all come from banking and private investment backgrounds.

Despite Ukraine’s political, economic and military crises over the last few years, it has returned to growth with the help of a $17.5 billion IMF credit line. Attached to this credit were reforms requiring depreciation of national currency, energy sector reform (raising gas rates to market level resulting in 50% of Ukrainians not being able to afford their utilities), and customs reform. Minister of Finance Oleksandr Danyliuk also identifies corruption as a major problem area.

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