Monday, November 03, 2003
Having decried European idiocy in my previous post, I think it's time to pick on the Canadians.

Before I get yelled at by Jane, Joe, Damian, or anyone else, let me clarify: I'll be picking on Canadians who wrote dumb letters to the October 25th-31st issue of the Economist, apparently in response to this story (site requires subscription, but the original article is also available here).

Our first winner is Abraham from Guelph, Ontario. (Since my blog is anonymous, I likewise won't mention the letter writers' full names.) He writes:

SIR - It is a shame that, despite its coolness, Canada is still not good enough for The Economist. You find it necessary to measure the degree of our success against the benchmark of America -- strictly in cash terms. We may earn less than our neighbours but we do not have a large number of entertainers, professional athletes and ridiculously overpaid executives that would bring up our average salaries.
Let's stop right there. This argument is silly on its face: is Abraham really suggesting that it's a good thing that Canadians are poorer? But we can be charitable, and assume that he meant that the hugely-paid top earners in the U.S. skew the results, and the "regular" workers earn the same as, or less than, "regular" Canadian workers. This still strikes me as a dumb argument ("Oh yeah? Well we don't have really rich people!"), but let's take a look at some data to see if it at least makes sense.

The Economist article doesn't actually provide any salary info for Canada, so we'll have to go with GDP per capita, available at the CIA world fact book: US$29,400, estimated in 2002, and adjusted for purchasing power parity. By contrast, per capita GDP in the U.S. is US$37,600 -- 27% higher. Given that the U.S. has a population of roughly 290 million, that difference comes out to $2,378,000,000,000 -- a little under US$2.4 trillion. Somehow I doubt our "entertainers, professional athletes and ridiculously overpaid executives" have managed to siphon it all off. I admit that's just a hunch on my part, but even if we had a million such people, they'd each have to snag $2.4 million without the rest of us noticing.

I used the per-capita GDP because I think it is the best-adjusted of the statistics, but we can look directly at salaries. The latest available are from 2001, and Statistics Canada reports that the average Canadian woman earned CAN$24,688, while the average male Canadian earned CAN$38,431. (US$15,927 and US$24,794, respectively, per the exchange rate on September 1, 2001.) That year, Canada's labor force included 8,769,200 men and 7,477,100 women, meaning that the average per-worker salary works out to US$20,714.

For the same, year, the U.S Bureau of Labor Statistics reports that the average annual salary for a worker in the United States in 2001 was US$36,214. That's a premium of nearly 75%. There's probably some give-and-take on the type of workers studied by the statistics services, but any way you cut it, Canadian workers are earning substantially less. Given that total employment for August 2001 was in the neighborhood of somewhere around 135 million, that's $2,092,500,000,000 -- again, over US$2 trillion -- more that U.S. workers brought home that year, vs. what they would have were they paid like Canadians. Even if we give a huge fudge factor for mismatched statistics, that's a lot of overpaid executives.

(Update: Jane rightly points out in the comments that when comparing the average salaries, I should have taken cost of living into account. To fix the problem, I used the Purchasing Power Parity of the Canadian dollar vs. the U.S. dollar. For 2001, taking into account the PPP, a US$1.00 was worth CAN$1.20 -- not CAN$1.55 you'd get from a straight exchange. With that in mind, the average Canadian's salary in 2001 was actually US$26,756, and the U.S. workers ended up with $1,276,886,250,000 -- or a little under $1.3 trillion -- more than what they'd get if they were paid the same as Canadian workers. That's still a huge difference, though -- you'd need a lot of overpaid execs.)

Abraham continues:

We do not need a huge army because we do not go about deposing democratically elected governments or invading sovereign countries. As far as being ovetaxed goes, most Canadians do not mind paying more for universal health care, universal access to post-secondary education, and much safer streets. . .
I'll stop the letter here, and say flat out that Abraham is fully entitled to his opinion; I won't presume to tell him or any other Canadian how they should arrange their nation. I will, however, take issue with his first statement, about not needing a huge army because Canada generally minds its own business. This dovetails with the second letter of the night, written by Roy from Quebec:
SIR - "Canada enjoys a free ride in defence from the United States" you insist. Please advise us of the countries that would attack Canada were it not for the might of the United States military.
That's the letter in its entirety, and it prompts me to make the following observation; call it Nough's Law: People who spend long enough in a protective bubble often forget that the bubble exists. This is not unique to Canadians by any stretch -- a huge proportion of Europeans and a nontrivial number of Americans share this flaw. Having spent all their lives in a world made safe through U.S. power, they forget that much of the world is an ugly, horrid place.

As for Roy's question, we can start with the Soviets, who were certainly not above invading other countries, and would have found the resources of Canada very enticing. The Chinese might be interested -- if not in outright conquest, at least in tribute. (It's hard to argue with a demand that's followed by "or we will nuke Vancouver." If the U.S. didn't care, what would be Canada's counter-move?) Ditto for the North Koreans, once their missiles reach far enough. What, did Roy forget that there are some bad people out there, willing to kill en masse for their goals? The oceans aren't the barriers they once were.

Speaking of the oceans, it is not necessary to invade the mainland to take advantage of a weak country: simple piracy around its main coastal waters would do the trick: harrassing fishermen, taking containers off cargo ships, etc. It doesn't take much to do a lot of economic damage in short order.

And this is assuming that things stay the way they are. Were the U.S. isolationist, much of the world would look a lot more tempting, and a whole lot of countries with an eye towards revenge or conquest might get a lot more active. That would include the likes of Iraq, Iran, Japan -- even France or Germany might decide to grab some of that old national glory. Maybe that seems preposterous at the moment, but that's only because of half a century of active U.S. involvement and dominance in every corner of the world. Whether they care to admit it or not, much of the world's stability has been guaranteed by the benign meddling of the hyper-power. I have nothing but respect for Canada and its denizens, but any Canadian who thinks his nation, with its military the way it is, could hold out against even a second-rate hostile power, is deluding himself severely. Living in a bubble has dangerous side effects.


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