Aug 2, 2015

Mulcair fails Media Relations 101

Today was election campaign launch day in Canada. Well I suppose that really happened a year or so ago, but today was the official launch, when the official rules kick in, at any rate. All the parties want one main thing out of these launches, to say a few positive things in their opening declaration that gets picked up by the media and gives them a round of free, positive advertising.

Mulcair, however, fumbled badly. He gave his speech, the media was there, but his mistake was that he pissed the media off by not answering any questions. This result in the media mainly writing stories about how he didn't answer questions, and completely ignore what he actually said:

CBC: Tom Mulcair takes heat online for not taking questions at first campaign event
Torstar: NDP Leader Thomas Mulcair takes no questions at campaign launch
Huffpo: Mulcair Takes Zero Questions From Reporters At Campaign Launch

And so forth. What they wanted was glowing articles covering their policy framing, like Trudeau got.

The lesson to be learned here is a simple one: don't piss off the media. None of them want to be out there on the sunday of a long weekend, but they are there because they have to cover your speech. So don't piss them off. Mulcair most likely didn't want to take questions because he wanted to be the person who got to frame the issues, not the media questions. What he got was the "Mulcair doesn't answer questions" frame.

The irony is that Harper is absolutely horrible at media access and has been for a long time. Mulcair is far, far better at this. And denying the media here doesn't represent some affront to democracy the way Harper's continued actions do. But because he pissed the media off, it wasn't presented this way.

Thankfully, it is a long campaign. A ridiculous long campaign designed to help the Conservatives and their larger war chest. Mulcair gets to try again on tuesday.

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Jul 31, 2015

GMO labeling shows that "states' rights" is just a convenient lie for the GOP

Imagine that the Democrats wanted to pass a federal law requiring food companies to label their products if they contained genetically modified organisms. What would be the Republican response? Undoubtedly a big piece of their argument would be the appeal to states' rights. That is, the federal government shouldn't be going around impose their will and view on the states, and that it would be horribly wrong for the federla Democrats to impose their view on GMO labelling on the states.

Except, the US House did this exactly backwards. The Republicans (with some Democratic support) have passed a GMO labelling bill that prevents any state from passing any law that labels food as GMO. Where did the states' rights argument suddenly go?

The main reason for this is that Big Agriculture hates these kinds of bills. Much of the US agricultural system is based around a couple of GMO crops. And not just GMO crops, but crops that are heavily subsidized by the US government through various farm subsidies. The subsidies have been around since the 20s, and have created a food system that asymmetrically depends on these crops and does little to help any of the subsidies putative goals. This industry is one of the most firmly entrenched in political culture. For instance, the first state for presidential candidates is Iowa, a heavy agricultural states. Politicians are forced to praise the continuation of this system as a condition of having a chance to become president.

For years, the standard line for Republicans on gay marriage was that it should be left to the states. This was why the Supreme Court was wrong, this is why they couldn't consider it federally, because it would be grossly wrong to impose something nation wide against the sanctity of individual states. For the most part, this is nothing more than an attempt to mask their real desire - to keep gay marriage banned - under a convenient sounding jurisdictional argument. But let us pretend that their view here was sincere. This GMO labelling business shows just how quickly this states' rights nonsense was dispelled. Minutia about how to label food is sufficiently important to make the federal government step in, but ensuring equal legal opportunities regardless of sexual orientation was not.

Hopefully this is the last time we have to pretend their is any shred of sincerity or standards to when the states rights line gets brought up. No standard, that is, except this: we agree with states' rights when the federal situation is something we don't like, and conveniently forget about it when it is something we do. Or more correctly, forget about it when

Finally, I should not that I am not anti-GMO. I think there is great potential in using science to develop crops that are most efficient, healthier, safer, and cheaper. I think some of that potential has already been realized, while recognizing that we need to strictly test and identify any health, environmental or social consequences. As a member of the left, I often find myself railing against others on the left who are far more generically anti-GMO. And I recognize that food labelling is probably going to lend more towards the kind of knee jerk anti-GMO that we have seen with the increased prevalence of gluten labeling (which is absolutely important for those with Celiacs, even if it has sparked an unnecessary food craze in a huge number of others). However, to categorically ban any state from experimenting or moving in this direction is ridiculous, even if it wasn't blatantly consistent with the GOPs self claimed states' rights ideals.
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Jun 27, 2015

"We're better than news, we're truthful"

So says Kory Teneycke, the former VP of the new defunct Sun News Network and now Director of Communications for the PMO. 

The irony here is simply too much. He is at least half right. Sun News Network was premised on just about anything but the truth. It was highly partisan and served precisely to better right wing interests. Truth was irrelevant, and it was why I so often opposed what they were doing. So he is not wrong to think that when he was in the news, he was not truthful.

I was highly critical of Harper's choice of spokesman, for precisely this reason. Communication Directors are always going to be partisans; it is basically their job description to spin things in favour of Harper. Yet even among possible Communication Directors, Teneycke was a horrible choice, confirming the Harper had no interest in trying to advance a meaningful dialogue, and baseless partisanship would be the name of the game. Being truthful, of course, just isn't relevant.

This quote is the ultimate example of projection. He lied when he was in the news. He lies now. And he the ones he accuses of lying? The rest of the media that actually does the thing he was - and is - supposed to do: tell the truth. 
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May 6, 2015

Alberta NDP would have won 26 seats if PC and Wildrose merged

The question for the federal scene coming out of the historic NDP wave election in Alberta that saw them jump from four seats to 53, a solid majority, is whether anything close to this is reproducible on the federal scene. The major difference between the two is that federally only the Conservatives represent the right wing (shhh dear Liberal bashers) while in Alberta there is the Progressive Conservatives and the Wildrose Party.

One crude estimate is to see what would have happened if the PCs and the Wildrose had indeed joined into a single party. Assuming the votes work out the same way in this new scenario (a big if!), it is easy enough to compute how things would have turned out: the Alberta NDP would have one 26 out of 87 seats against a powerful Conservative majority. (email me if you want the spreadsheet)

This result is fairly stable if you relax the assumption. For instance, suppose the NDP gets a 10% boost (not 10 point) because of, say, people so disgusted by the amalgamation that they vote NDP. That only gives him 28 seats.

Of course, at the federal level, Alberta doesn't give 87 seats. Under the new redistricting (which makes this kind of math very hard this year), Alberta only generates 34 seats. If we assume the result is proportional, that means the NDP gets 10 seats federally. Not bad. Not great, either. In 2011 (when only 28 seats were up for play before the redistricting), the Conservatives swept 27 of 28 seats, with the NDP second in 23 of those 27.

Incidentally, the Liberals might appear to be the big losers here, but they aren't. They are a dead party in Alberta, capturing only 4% of the vote (most Liberal supporters undoubtedly ended up voting NDP so it doesn't necessarily mean people dislike them as much as 4% implies). But the key point here is that normally when the NDP does well it hurts the Liberals and helps the Conservatives. Here the NDP doing well reduces the number of Conservative seats but doesn't change the number of Liberal seats (they get zero either way), so it makes it easier for the Liberals federally.

There are about a million caveats to this very crude analysis. It only works under a tonne of assumptions that are almost impossible to remain true. Either way, there is hope for a modest but not enormous jump for the NDP federally. 
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May 4, 2015

Justin Trudeau's tax plan is good policy and great politics

Going as far back as Justin Trudeau's leadership election, he has consistently kept his major campaign planks close to the vest. Little tidbits, like the policy on marijuana, come out in carefully crafted morsels, but for the most part we are left guessing at what his first federal election campaign platform will be based on the vague rhetorical positioning his team has let out over the last year. 

Finally, however, we have some clarity. Trudeau has announced a big series of changes to tax policy. They do a couple things. Firstly, they reverse the two much criticized regressive new tax policies from Harper: income splitting and doubling the TFSA contribution limit. Secondly, he is going to increase taxes on income over $200k from 29% to 33%. All of this new (or at least new relative to Harper's plan) money coming largely from higher up the income ladder gets moved downwards either through a 1.5%  tax decrease in the 44k to 89k tax brackets, as well as pumping a lot more money into children benefits, crucially tying these into income as well. 

The net effect is to make our government system a few percent more progressive than it was before. On this blog I have long claimed that income inequality is a major problem we face, ultimately deriving from the numerous regressive forces in society that make it easier for the rich to get rich, and keep the poor being poor. Government is, first and foremost, a massive wealth redistribution engine that through a progressive taxation and spending scheme helps offset these recessive forces in society. Despite this, we still face significant inequality. This policy would be a tweak in the right direction. 

It isn't just good policy, it is great politics. The majority of the electorate is in that middle class category that is going to benefit (although seniors won't like the TFSA not doubling and don't benefit from the child benefits). Myself, as a PhD student hoping to get a job and have kids in the future, I'm very likely to be smack dab in the demographic that benefits. But even if I wasn't, it is the right thing to do and is undoubtedly going to popular. 

The Conservatives, of course, will demagogue the tax increases. Any deficit neutral tax change by definition will have some increases and some decreases. The National Post editorial team has already slammed it as "class envy".  We have seen this kind of demagoguery on the idea of making the tax code more progressive before. My guess is that it is a losing political position, that the sense among the public that our society is too unequal is too strong. 

The 30,000 foot view
Taking a 30,000 foot view of a political landscape with three dominant parties, the party on the right generally wants to decrease the size of government, the party on the left wants to increase it, and the party in the center wants to leave it somewhere close to where it is. The problem for all centrist parties is that it is hard to advocate compelling changes that people vote for when your big picture position is not to keep things roughly where they are. 

That said, over time the political landscape tends to change and what often happens is that all parties move simultaneously over the course of, say, a decade. On lots of social issues, for instance, the left moves quickly, the right moves barely at all, and the center moves slowly. One of the biggest changes, as I've noted before, is that the amount of political space between the Conservatives and the NDP (and indeed in other countries a similar pattern holds) has shrunk considerably which leaves less and less unique space for the Liberals to carry out their own identity. 

Given the above dual problems of being positioned in the "keep government spending roughly the same" category with less and less distance between them and the Conservatives or NDP, changing the tax code to be more progressive is the perfect policy. It keeps the basic constraint of a similar amount of government funding, but makes a meaningful improvement by changing the level of progressiveness in the system. 

Not everyone is going to love the Liberals for this plan. Many fellow progressive bloggers are going to want more net taxation to pay for various policies they think are good. I often join them. But if we restrict ourselves to keeping net taxation relatively constant, this is a good plan. 

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Apr 24, 2015

Tech on the Side: Skeumorphism and round smartwatches

It appears as if Samsung's next smartwatch is going to follow the Moto 360 in having a round face. This is an examples of short term thinking and skeumorphism gone horribly wrong.

The concept of skeumorphism in technology refers to using designs that were needed in older technology, but are no longer relevant today. The first several generations of iOS were full of skeumorphism, from faux leather and yellow legal pad style notes to 3D drop shadows and mechanical dials. None of these design elements made anything more functional, but there was a sense in which they were familiar to actual note pads and actual 3D buttons. Arguably it made it easier for people to effortlessly embrace the touch screen centric world we now live in.

In Windows 8, in iOS 7, and in Material Design on Android (and most of the rest of Google's portfolio), skeumorphism has largely been dropped. Everyone is completely familiar with touch screens now, and we hardly need these old visual cues. So modern designs don't pretend to be anything beyond the two dimensions they live in and have clean and often brightly coloured designs far from their pre-mobile predecessors.

Why a round watch?
For mechanical watches, the fact that they are round follows from the geometry of a hand going around in a circle. A rectangular watch is just going to have wasted space in the corners and would be pointless for mechanical watches.

For smartwatches, round faces make little functional sense. Anything that displays text (such as messages, emails, etc) is going to be best displayed on a rectangular display. The only real application that makes sense for a round display is for showing legacy watch faces. But even then, this is only going to be a small portion of use (otherwise why by a smartwatch?), and besides, wasted space on one app is a far smaller problem then not enough space on everything else.

Round smartwatches are thus an almost quintessential examples of skeumorphism. It is using a design that made a lot of sense in the legacy technology being replaced (mechanical watches) in the modern technology (smartwatches) where it is functionally unnecessary.

At least in the iOS examples of skeumorphism there wasn't much of a loss. We didn't need fake binder coils on our notebook, but they didn't hurt much either. There was, at worst, a fairly small percentage of wasted space compared to modern designs. With round smartwatches, the functionality of the smartwatches is worse than rectangular designs, in particular for the displaying of text.

Why then does the Moto 360, the presumed new Samsung, and others use round displays if they are, as I suggest, obviously inferior? My arguments were about functionality. Theirs are likely more about familiarity.

 Smartwatches are a largely untested product category and it isn't clear that people will either find them useful enough relative to smartphones to bother, and the degree to which people will find it fashionable or unfashionable to have them. Watches are always on display as part of our wardrobe, so this matters to an even greater degree than smartphones. The hope, presumably, is that by having a device that looks like a watch - something many people wear currently - that it will make people more familiar with the product and more likely to buy it.

Maybe so, but I somewhat doubt it. If early estimates are correct, it would appear Apple has sold more smartwatches in their opening weekend then the entirety of Android (or Samsung's own OS) based watches have in a year. Apple, of course, is a unique entity, and it isn't as if most of those rectangular Android smartwatches have sold much either. However, for long term success, I think trying to get a few more people from the door early with familiar but functionally inferior designs isn't going to be a winning strategy.

This blog is primarily about political and social commentary. But it is also my personal space to blog about, well, whatever else it is that I'm interested in. These posts get labels "______ on the side", such as my Tech on the Side series. 
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Apr 7, 2015

Seniors are not a good reason for doubling TFSA limit

After years of being promised whenever the federal books got balanced, it looks like the next Harper budget is indeed going to double the contribution for Tax Free Savings Accounts. This policy has long been criticized - including by me - for being a policy that disproportionately provides advantages for the rich. Indeed, the number of people capable of putting aside over $10k in savings per year while working are fairly limited.

Today in parliament, Finance Minister Joe Oliver has hit back against these criticisms, effectively pointing out that there is another big group of people who are already maxing out their contributions: seniors. 71% who max out are over 55 and 46% are seniors. 

The reason for this is fairly simply: most seniors live entirely off their savings. It is very likely that a good chunk of these will max our their contributions when it is doubled, too. As they are saving already, whatever savings plan is introduced will undoubtedly be used extensively be them. So fair enough, the point that it isn't just rich people using it is well taken, clearly there is this big group that takes advantage of it.

However, this doesn't fit as neatly in with the objectives of the TFSA in the first place. The main point of a government backed savings program is to encourage savings in the population. The argument is that a population with a higher savings rate is thus going to experience less dramatic recessions (since they can spend their savings during a recession) which will be better for all of us. I'm totally in favour of savings plans in general, just not this one in specific, as I will get in to.

Seniors, however, are not encouraged to save based on increasing these contributions. Seniors are already not working and thus living primarily off savings and can not save more. They will use this policy and benefit from this policy but they won't be contributing to the primarily goal of the policy: increasing net savings in our society. What is happening here is something of a wealth distribution towards seniors.  That's okay. I think there are solid reasons to distribute wealth towards seniors who often suffer, but it comes back again to whether this savings method is a good way to do that.

The fundamental problem with a savings incentive system based on tax breaks is that it is inherently regressive (as it undoes a tax code that is inherently progressive taxing higher earning people more). Someone earning very little pays a low tax rate and so doesn't benefit from the same dollar value in savings as someone who is richer. It isn't just that it exacerbates systemic inequality, it also undoes the putative goal of a government saving plan: to encourage savings to dampen recessions. This is because the poorer people are those most sensitive to the pressures of recessions and thus in most need of savings to be able to continue spending through the recession which keeps the economy good for all of us.

Even if we just restrict to seniors, this helps richer seniors who have high investment income more than it helps poorer seniors, those who we might care to distribute wealth to in the first place. If the goal is to help at risk seniors, this is the worst way to do that. So while it certainly doesn't help the main objective of the plan - increasing net savings -it is also a poor way to implement this sort of secondary objective. And everything it does, to seniors and working age people alike, is done in a highly regressive way.

Contrast this with, say, a savings plan that includes direct government contributions in a progressive way (ie government adds x% on first thousand saved, y% on the second thousand saved, etc). Perhaps combined with a separate wealth distribution to seniors if needed, also done in a progressive way. There are many ways to do this that can be debated. Unfortunately, there didn't seem to ever be a substantive debate on the best kind of savings policy in Canada. TFSAs are what we got, and we are about to double down on them, criticisms be damned.

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Apr 2, 2015

Ontario's brave new cap and trade program

The Globe and Mail just broke the story on what will likely be the defining component of Kathleen Wynne's legacy: The Ontario Liberals are introducing a big cap and trade plan. Details are sparse as yet, but it looks like they will be joining the Quebec/California regime. This is huge news, especially given Ontario's relative prominence in Canada's economy.

While BC (under the Liberals as well, incidentally) were moving forward with their carbon tax, Ontario Liberals had made big moves on the green energy file. With cap and trade, they are now tackling the greenhouse gas production side of the energy equation.

One of the trickiest problems of global warming is that it falls to tragedy of the commons problems.
Any individual jurisdiction has incentives to not act themselves (and thus not accrue any costs relative to others) and have everyone else take the costs while they just get the relative benefit of less climate change. To succeed we need to move beyond this kind of jurisdictional selfishness, and it takes people coming together and bravely willing to take bold actions, even when most of the provinces, the federal government, and, indeed, much of the planet are dragging their feet. There already was an argument based on the green energy file that Ontario was one of the most aggressive provincial or state level jurisdictions in North America for combating climate change. With the introduction of a cap and trade program, this will solidify that status.

Kathleen Wynne didn't have to do this. It was certainly not some key part of any election plan. At best it is politically risky. I have previously argued how dynamics regarding the Green party made a strong case for the McGuinty era Liberals to push hard on the green file, but I'm not convinced the same dynamics are as strong today after an election where anything to do with tackling climate change was very much on the fringe.  But she choose do to this, and now we have policy worth fighting for.

People debate the efficacy of cap-and-trade vs fee-and-dividend (ie carbon taxes) and any other plan we may come up with to tackle global warming. I've done so, for instance, here. Some will undoubtedly be disappointed by this particular plan to help combat global warming. Fair enough. However, given the dynamics of today where we have this pressing global problem and very little global action against it, I am going to take what I can get. Absolutely we should push for not just any solution, but the best solution, but I will do so by also giving full throated support for undoubtedly positive - even if not optimal - political action like this.

The political angle:
During the 2011 Ontario election, I wrote that the election to reelect McGuinty was, and must be, a referendum on the brave green energy plan (using feed-in-tarrifs) the Liberals had previously instituted. I have consistently lamented the NDP for not prioritizing climate change issues while the Liberals have been acting positively.

Now, however, there is hope for political agreement as the NDP has long supported cap and trade (while federal Liberals flirted with carbon taxes, particularly under Dion's "Green Shift" plan). Despite the Liberals having a majority, this a program that needs to be implemented and reinforced over decades to help its goals, and having political agreement is critical. The PCs, of course, will abhor it, and will be the advocates for those businesses who will lose under this proposal, but this can't be helped.

Regular readers will recall that I have never been a partisan between the Liberals and the NDP with a long documented history on this blog of sometimes supporting and criticizing and voting for both parties. The one issue that really forced my hand, in Ontario at least, was the green energy file with the big moves by the Liberals largely rejected by the NDP for (in my view) bad reasons. While the 2014 elections had very weird political framing, in 2011 by far the key issue was green energy for me. It is of great comfort to me that by keeping a party with a history of success on this file in office, we have been rewarded by further success on this file despite the numerous headwinds and little momentum that would seem to have been the case yesterday.

There are a lot of details to be worked out, and I'm sure we will be debating them in the time to come. But for now, at least, I'm happy we are moving in the right direction.

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Mar 29, 2015

How much should graduate students be paid?

Being a graduate student is in some sense in the middle of two extremes: being a student primarily benefiting oneself and being a paid worker benefiting society. Before graduate studies, one is an undergraduate where nobody would expect to be paid to be an undergraduate. After graduate studies, one is (hopefully) going to be paid a paid a sum commensurate with the skill the knowledge accrued during graduate studies and be doing work that, by and large, can be said to "benefit society". During graduate studies, however  it is somewhere in between. Graduate students are both benefiting themselves by increasing their future potential and also doing teaching and research that is benefiting society. How much, then, ought they be paid?

How graduate studies typically work:
A graduate student typically has two major roles. The smaller of the two roles is what makes up a higher portion of their funding package: teaching work. They are being teaching assistants that run tutorials, mark midterms, hold office hours, and the like. In latter years they are also course instructors which run full courses much like a professor. This is unquestionably real work. If you blind yourself to anything but this specific work, graduate students are typically well compensated for this specific work, over $40 and hour at the University of Toronto. That is very comparable to a moderately high skill hourly wage in the private sector. I have no problem here. The issue is that the number of hours is fairly small, something like 200 hours a year, so about 10% of what "full time" work is. 

The larger role is doing research to produce a thesis. This sucks up the vast majority of the time spent in the latter years after courses and comprehensive exams and the like are completed, and for this portion of work graduate students are paid very little, far less than what research work in the private sector might be. Together the compensation for these two components is typically a less than poverty line amount to take home. 

Graduate students are usually paid an amount in between these two extremes of undergraduate and full time work, something like the 15k minimum funding package offered by the University of Toronto. It varies from school to school. This is an amount far larger than what undergraduates are paid (nothing, minus tuition), and an amount far smaller than what is typically paid for full time work after one graduates. It doesn't seem immediately wrong to me that this in between place in life gets paid an in between amount of money, the question will be one more of where, precisely, to put the number. 

No graduate student becomes a graduate student for the money earned while in graduate studies. One is almost certainly going to be paid far less than if one tried to find a job after completing their undergraduate degree. However, the main motivation for being willing to spend 4-6+ years severely underpaid relative to the undergraduate degree job market is because of a combination of increasing future earnings (a PhD being far more competitive than a BSc) and/or a genuine passion and interest for the subject of one's studies. Part of the calculus that goes into the decision to go to graduate school is the assumption of a (relative) loss now. 

Two types of arguments: 
As with many questions of policy, there are typically two rather different types of arguments. Firstly, we have what I will call "economic" arguments. These claim some sort of larger economic or perhaps soceioeconomic benefit from the policy. For instance, when talking about TFSAs, one can argue that a society with more middle class savings has smaller recessions which is good. This is at its root an economic argument. 

Secondly, there are what I will call "social" arguments, that presents some form of normative benefit like equality or freedom that will benefit from the policy. I support gay marriage not because I think society will be better off economically, but because of these ideals of freedom and equality. 

The best policies are often ones where there are strong arguments in favour considered both ways. For instance, during a recession, spending money on employment insurance is one of the best stimulative policies possible (as the money so quickly enters the local economy) so there are strong economic arguments for it but there are also strong social arguments about reducing inequality and suffering. 

Returning to graduate funding, I'm going to find that sweeping macroeconomic arguments for increased funding are somewhat lacking, but that there nonetheless remains strong social arguments. The economics first:

In between two extremes:
Let's take this to the salary extremes to see the effect on graduate schools. Firstly, let's act as if graduate studies is comparable to undergraduate studies, as in it is primarily about advancing one's own knowledge and ability to compete in the market later in life. Let's assume we pay zero dollars for graduate studies, and charge tuition to boot. The same motivation mentioned above (that people would earn more in the future with an advanced degree) still applies, but the threshold changes. A half decade of going into debt requires a huge future return on investment that for many people won't be justified. The obvious effect is going to be a substantial decline in the number of people applying to graduate schools, resulting in less of the best BSc graduates ending up going to get graduate degrees. There are strong arguments that a highly educated society has many positive socioeconomic consequences, and so far less competent people wanting to go into graduate schools would be a loss. Of course, there would be the gain that provinces would have to pay less for universities and could thus tax less or spending elsewhere.

There is also something of a tipping point effect. Four years of unpaid undergraduate work is a serious strain on either family finances or building up of student debt for many people. It is doable, just, but hard. A decade of it (undergrad and graduate together) is simply too much to be sustainable for many people, no matter how positive the future return on investment. So this extreme seems like it would have a big cost in the terms of having a high quality, highly educated society with marginal benefits on tax bills. 

Now take the other side, that graduate studies are paid similar to private sector jobs. Say, $40k per year, just to pick a number. This is going to make graduate school even more desirable since your get the future earning potential as well as being paid reasonably well immediately. If we hold the number of graduate positions constant (this will already be a substantial burden on governments to finance, increasing the number of positions would be yet more again), what this increased incentive will do is mean that the composition of graduate students will improve. Very bright people who might not have done graduate school will now do it and so we will have, on average, a better cohort of graduate students (and a worse cohort of people who go to the jobs market after BSc). The problem here is that we likely come upon a resistance point. The best and brightest typically (not always, but typically) already go to graduate school, because the incentive structure already is enough for them. And for those that don't - bright people who leave to the job market leaving less bright people to get accepted to graduate school - it isn't clear to me that keeping these people in graduate school is actually that big of an advantage for society. I also want very bright people to found startups in the private sector and the like. So this extreme seems like a big cost on provincial coffers for little socioeconomic gain. 

In between the two extremes thus seems like a reasonable place to be. Not $0, not $40k. Can we argue for the difference between $25k and $15k (the UofT minimum now)? Clearly this is going to require more detailed arguments than the more sweeping big pictures arguments thus far. Indeed, from these sort of bigger picture arguments there doesn't seem to be any clear reason why one is better, it really depends on the sensitivity of these smaller changes in price to the incentive structure. 

Unaffordable for some:
For me personally, the level of funding is sufficient. While obviously I would like more, the  advantages that graduate school provides meant that the benefit relative to working after my undergraduate were not that sensitive to how much I was going to be paid. However, I have various advantages (family support during undergraduate, having savings, cost sharing with my wife, etc) that meant that living on graduate funding was a very doable position. I have a reasonable quality of life despite living in Toronto and extra money at this point would only be saved for future spending. 

For many, especially those without my financial advantages, this is not the case. Without financial support such as being able to live at home during their undergraduates, one will often leave with substantial debt and spending a decade running a deficit is simply untenable for many people, particularly those with children. Graduate school funding minimums are substantially below the poverty line, and while this can be often tolerated for amount of time (during ones undergraduate, for instance), it is hard to maintain for so long. 

Economically, the consequence of graduate funding being at this level is that it pushes some people out of graduate school and into the general market based on its level of unaffordibility. As such, the calibre of the graduate school cohort declines as otherwise competent people don't enter. 

Higher packages probably don't cost society much:
If we tax higher incomes slightly more (as in the incomes graduate students will often make) and pay graduate students a little bit more, what is effectively happening is a forward shift of future money to the present. The income curve with respect to time will be less steep with more money made in the first decade and less in latter ones. Even if we act as if there are precisely no other socioeconomic consequences (this move very likely isn't zero sum), it is probably a preferable switch for most people who will get graduate degrees. It would, of course, be a negative for people who end up earning high incomes but didn't do graduate school, but these are people already privileged by ending up with high incomes and being paid more during the years graduate students are students. 

The net economic argument:
Putting all this together on the economic front, I think it is something of a wash. The majority of the cohort is not sensitive to very large increased wages in the sense that increasing pay isn't going to make more of the best students go into graduate studies versus entering the job market after undergraduate as the advantages of graduate school are sufficient to dominate already. That said, there is still nonetheless a portion of the potential cohort where the financial challenges do push them out of the possibility of grad school. Large increases simply are not necessary to increase the quality of the graduate school cohort, but small increases will pull those who simply can't continue at the current levels (due to debt, kids, lack of family support, etc) to stay in. Taxing more on higher wages to pay for higher funding now largely transfer the time distribution of money from two similar cohorts.

What precisely the "slightly higher" level of funding is debatable, and changes substantially depending on the local cost of living. One convenient metric is the poverty line which already takes into account many of the financial challenges facing people. Changing the minimum funding package to being the poverty line will pull up those currently unable to do graduate school based on financial challenges. 

The social argument: 
Regardless of the above economic considerations, I think there are strong social reasons to consider moving up to poverty line levels of funding. At its core, this is an argument about equality. There is a portion of the potential graduate school cohort who can't go to graduate school due to financial challenges, whether this is the need to help out family, whether it is kids of one's own, whether it is due to past debt (for instance from an unassisted undergraduate). Disproportionately these people are going to come from lower income families.

 I've always believed that a key role for for governance in society is to create a broad floor beneath which we can't fall. Graduate school is not like access to healthcare in that it is meritocratic and can't be done by everybody. There are plenty of ways where demographic considerations change one's potential to be able to get accepted for graduate school and nothing in this post is going to address this. But at a minimum, I think we can accept the idea that people should not be unable to attend graduate school based on reasonable financial limitations. There are people in that category. We should change that. 
Read more » "How much should graduate students be paid?"
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