The world's most livable cities, and the reasons behind it.

The past week we learned about different measures of Standards of Living. We focused and talked a lot about the Human Development Index, which was the statistic of how developed or undeveloped a country is – Gini Coefficient which was the measure of inequality and income distribution per household – the Human Poverty Index which took into account factors such as hunger, and ability to provide basic needs such as shelter and clothing, and there was also a presentation on gross national happiness, which focuses on the overall happiness of a country by taking into account factors such as: economic wellness, environmental wellness, workplace, social, and political wellness.

Today we are going to take into account all these measures of the standards of living and we’re going to expand it into the real world, and talk about the best and most livable cities in the world.  We will also discuss why these cities are ranked to be the most livable, how they compare internationally, and take a look behind the scenes of the best city in the world.

When determining the best cities, economists take into account how tolerable a city is. Some potential factors are: crime levels, threat of conflict, quality of medical care, levels of censorship, temperature, schools, and transportation links in the city such as buses, metro, etc. and how efficient these transportation methods are.

The Economist Intelligence Unit’s (EUI) livability rating quantifies the challenges that might be presented to an individual’s lifestyle in 140 cities worldwide. It assigns each city a score for over 30 qualitative and quantitative factors across five broad categories: stability, healthcare, culture, environment, education and infrastructure and they take these into consideration to determine the well-being of a city.

Professor Rob Adams, Director of City Design for the City of Melbourne, says livability is about choice and access.

- “A city feels livable if its citizens have choices – the choice to walk instead of drive for example. Walk-ability is probably one of the basic indicators of a livable city.”

By all these measures, surely Melbourne is indeed livable – it is certainly walk-able, with functioning hard infrastructure.

The listing here is dominated by Australasia, and Canada. Melbourne, Australia takes first place as the most livable city in the world for the past 3 years, at a rating of 97.5 / 100, and just behind it we have Vienna, Austria, and then 3 of the top 5 cities are Canadian cities; Vancouver, Toronto, and Calgary which is very positive for Canada once again. As noticed, there is a very little amount of European countries which really surprised me, considering that during the past week, most presentations consisted lots of European countries to have the most developed, and happiest origins to live in, but apparently they are not all the most livable countries, which really got my attention – this is most likely due to the fact that although a country may have a high HDI rank, different factors such as crime rate or transportation may be lower compared to other cities, and that affects their ranking in terms of ‘livability’. 

Half of the cities are in Australia and New Zealand, three are in Canada, and two are in Europe. One thing most of these cities have in common is that they’re all medium-size cities in prosperous countries, with relatively low population densities. It’s an equation that leads to low crime rates, functional infrastructure and plenty of recreational activities for residents. This also helps the cities in terms of crime, congestion, and public transport efficiency.

On the bottom of the list we have very undeveloped, dangerous, unstable, cities that are primarily located in Africa and the Middle East. Countries such as Syria, Bangladesh, Pakistan and Nigeria are home to cities which would be considered unstable, and dangerous and also because there's lots of war going on there and conflict was responsible for many of the lowest scores.

Australia was a country with one of the highest HDI’s, and it also proves that it is a very well rounded country overall due to its consistency of having one of its cities as the most livable city in the world, and 3 others in the top 10.

Maybe some of you are surprised that not a single American city is top 10. Regardless of the fact that the United States is a very rich and developed country, it doesn't have the most livable cities. But this is most likely because, aside from the fact that most cities look really nice to live in, such as Los Angeles or Miami, the lack of efficient healthcare, crime rates, and ability to own guns which causes lots of risks and threats is a problem. Also, high poverty rates, and cost of living are factors as well. These are some factors that really influence how livable a city is, and clearly these factors are affecting cities in America very negatively.

 Above, is a snapshot of Melbourne, Australia. You can notice that it looks like a stable city from the top, with an attractive skyline, a nice river flowing around the city center, and although you cannot see it in this picture, there are numbers of beaches just minutes away from the city center. 

Some things that make these cities stand out and that give them a jump start is the ability to host major events such as the Fifa World Cup, or Olympics and they gain lots of revenue towards the city and are able to make changes internally. But just because you host a major event, won’t automatically fix all the economic problems, but it might certainly give a country, and its cities a boost.  

After doing my research and reading a lot about Melbourne I realized that it is very clean, there is great temperature and weather, great skyline, there is a nice mix of new and old buildings, loads of great eating places, it is very diverse and there’s lots of variety – and all these factors make the city very attractive, so that’s one thing.

There are also three main modes of transportation: Trains, trams, and buses. These are all very essential for a city to be considered 'most livable', because basic, and efficient transportation within the city is the key to access the city's infrastructure. There is also a free tram that circles the entire city and stops at major areas such as the beach, key areas for tourists, and University students have access to free transportation to-and-from University.  People also use walking, bicycles, or a car as methods of transportation.

Melbourne is also planning on constructing another skyscraper into their skyline, which would make it the tallest building in the Southern Hemisphere and this project is expected to be finished in 3-4 years. So as we can see, Australia is continuously investing in the future and expanding their economy.

Every year Melbourne hosts a major tennis event; the Australian Open and they gain lots of revenue from that, especially through sponsorship. They also have lots of beaches just a few minutes away so that is very appealing, especially to tourists.

Speaking of tourists, we’ll talk about immigration. Australia is an immigration-friendly country, and is the second most immigrated country in the world, just behind Canada. It is also very diverse and multicultural. It has one of the highest standards of living in the world, subsidized language lessons to foreigners, employment support, and comprehensive healthcare services. Sydney, the capital of Australia, and Melbourne are the two main cities of immigration for Australia.

Here is a video and it will help us learn why Melbourne is one of the most immigrated cities in the world, and why this city has been considered the ‘most livable’ city in the world for the past three years.

http://www.youtube.com/watch?v=5f6fZdOzcG8

Investment, business, innovation, creativity. As said in the video, this is the ingredient to reach out to the world; ; and this ingredient is what helps this economy to keep going and expanding continuously with immigration, and innovation with the current residents. In the video, it also talks a lot about opportunity for business, so that may be very appealing for residents outside of Australia to try and invest in a new life, in a new country.

After learning more about the city, we realize that factors such as opportunity for business, great quality of medical care/education, employment opportunities, low crime rate and other measures, help determine how livable a city is, and because of such high quality of living - Melbourne, Australia is the most livable city in the world for the third straight year. 

- Mati Jankowiak

The Macroeconomics of Hosting the Olympic Games

We've started off the new term with a new unit in Economics 40S - Economic Indicators. To start off the unit, we looked specifically at Gross Domestic Product (GDP), which the textbook, Working with Economics, defines as "...the value of all final goods and services produced in a country in a given year." GDP helps to measure the health of a nation's economy, because a healthy economy allows for low unemployment and high wages. Macroeconomics looks at a nation as a whole, when dealing within the realms of the economy, as the textbook defines macroeconomics as "...the area of economics concerned with the overall view of an economy, rather than with individual markets."

With that in mind, it is clear that the beginning of this term also marks a spectacular international event - it marks the beginning of the 2014 Sochi Winter Olympic Games. 

So, why host the games, you may ask? The games are not only a great method of promoting tourism and nationalism in a country, and it also helps to increase spending, create jobs, and promote the construction of better infrastructure and transportation systems.

These long-term benefits were especially evident in London, after hosting the 2012 Summer Olympic Games. In fact, in an interview with the Olympics Committee, Mayor Boris Johnson of London praised the games, and said that these games will secure a "lasting legacy" on the capital of England. He noted, "We can secure a transport, housing, infrastructure, sporting, cultural, and social legacy from these games and turn these Games to gold for decades to come." However, this was not just a speculation, as the national GDP of England had finally risen over 1% after the games, after a long period of decline. According to journalist Mark Thompson of CNN, the Olympics had helped to lift the UK out of recession. In fact, British Finance Minister George Osbourne stated that the games had put the UK on the right track on its mend towards economic strength and growth. 

But, what about all this controversy over the heavy financial burden placed on the host cities? 

The grandeur of the Beijing Olympic Games of 2008 had cost the country roughly $40 billion, shocking the international community with the depth of its financial commitment. While $40 billion may seem like an extraordinary amount to be spending on a sporting event to the rest of the world, China did not suffer great financial implications, because, according to an article on Bloomberg Business Magazine, the games only accounted for, on average, 0.3% of China's total GDP each year, hardly significant on a national scale. 

Looking at it from a macroeconomic standpoint, the Sochi Olympic Games, which had cost the Russian government an estimated $50 billion (the most ever spent on the games), did not impact the nation's economy greatly, costing only a mere 2.4% of the national GDP. In fact, the financial impact of the Sochi Olympic Games pale in comparison to the 2004 Athens Olympic Games, which had cost the Greek government roughly $11 billion, or a heavy 7% of their national GDP, according to the same article from Bloomberg Business Magazine. 

So, what's the moral of the story? 

It's simple - don't let the numbers scare you (unless you're looking at the national GDP). In a paper published by Markus Bruckner and Evi Pappa of the London School of Economics and Political Science, it has been shown time and time again that hosting the games generates positive investment, consumption, and output responses, even before the games begin. 

The games unite the international community, bringing people from all corners of the world together to celebrate, compete, and enjoy one another's company. It (generally) strengthens a city's economy, and encourages spending, tourism, and improved services for years to come. It's definitely an investment on a nation's part, but a good one at that. 

In the end, Russia spending $50 billion on the games will not send the country into a recession. However, many economists speculate that Athens spending 7% of its GDP had sparked its economic downfall. 

As you can see, the common misconception that the Olympic Games are a waste of money, and only damages a country's economy, is wrong. Looking at the grand scheme of things, or, looking at it from a macroeconomic perspective, we can see that the financial implications of hosting the Olympic Games do not heavily increase a nation's debt, as long as a moderate amount of money was spent in relation to the nation's GDP. So, the numbers don't matter - it's the percentages that count.

Alex's Blog Post

Why is Winnipeg Health Care Failing it’s People?

                Winnipeg health care system is failing us because we don’t have enough hospitals to support the 783, 700 people who live here. We only have six hospitals and probably one 3-4 doctors on call, depending on the ward. 280,000 people visited the hospital last year which calculates 23, 333 visits each month and 5833 people a week. Thus equally out to 972 people in each hospital. The average ambulance wait in 2013 was 78 minutes. According to the WRHA president and CEO Arlene Wilgosh, the WRHA wants to be able to treat and discharge 90% of emergency rooms patients. Myrightcare.cu is a website promoting other alternatives to patients to use, rather than rushing to emergency rooms for less severe incidents or concerns.  In my opinion, this won’t really help because when people are really sick they don’t want to go online.  They want to know what is wrong and the place to go is the hospital where doctors and nurses are to help. Also people will be a little hesitant to use to website because people don’t trust the internet for certain research and also people won’t be thinking clear because they are too busy panicking.

                My mom Sylvia Ptashnik, is the director of residence and services at Deer Lodge Centre,  one of the board of directors for the Fred Douglas committee, and has also been a nurse for 37 years. She worked in emergency rooms and the intensive care unit for 25 years. I asked her, “Why is the health care system failing us?” She answered, “When I worked in the emergency room, ambulance waiting times were a lot faster than they are now and we didn’t have the amount of people requiring hospital visits as much as we do now.” She also told me, “about 15-30 years ago people were saying we need more hospitals to cover the growing population of Winnipeg, but the government denied saying no we don’t need to build more hospitals. Now they are trying to make up for their mistakes, but it’s a little too late.”

                In my experience with hospital visits they need to improve the care they give the patients because when I had my appendix out the nurses didn’t give me good care. For example, when I wanted clean sheets they told my parents where to find them and my parents changed them. It is their job to do things like that.

                If our money goes into the health care system, why isn’t it changing or improving. We learned in class that it is the provincial government’s responsibility to provide us with health care. In the case study we did on health care on September 18, it states despite the massive funds put into the system, problems still exist. Waiting room times for operations, recruitment of new staff – especially doctors and specialists nursing staff. Arguments continue over where National Health Service funds would be most appropriately spent. This article is on the health care problems that are in the United Kingdom but they are similar to the problems that we have here in Canada. 

WRHA flatlineson ER targets  By: Larry Kusch Winnipeg Free Press

 http://www.winnipegfreepress.com/local/whra-flatlines-on-er-targets-24034051.html 

The Numbers don't lie: Ambulance wait times rising, not falling By: Tom Brodbeck Winnipeg Sun

http://www.winnipegsun.com/2013/10/15/the-numbers-dont-lie-ambulance-wait-times-rising-not-falling

Tax system

In a few years, we will have graduated from university or college and be working in the real world. We will be much more interested in taxes than we are right now because we will be paying taxes. Some of us will be paying high taxes, so the sooner we learn about tax systems, the better. There are a lot of categories of taxes but I’m going to discuss three taxes, each of which is based on a tax rate.

Progressive tax system

The progressive tax is based on a person’s income and expenditures. Progressive tax increases as an individual’s level of income increases. For example, if you earn $10,000 a year, under a progressive tax, your tax rate could be 10 percent, meaning you would pay $1,000. If you earn $50,000 a year, a progressive tax rate could be 20 percent, meaning you would pay $10,000. And if you earn $100,000 then taxed at 30 percent, you would pay $30,000. Many countries including Canada are using the progressive tax system for the following reasons:

Advantages of progressive taxation:

1.       Proper distribution of money: Since progressive taxation allows income-based taxes, a person with low income will pay much less than a person with a high income. This is an effective way for proper distribution of wealth.

2.       Protects the lower income group: Progressive taxation system allows the lower income group to pay less in taxes. Since most of the working population falls in this category, progressive taxation is favored by most.

3.       Protection during recession times: Progressive taxation system also protects people during recession times because if their income drops, they fall into lower income bracket.

4.       Stable income stream: Progressive taxation also allows the government to have a stable income stream even in times of depression.(http://www.credit-terms.com/tax/progressive-taxation.html)

Personally, I’m not sure about this system if I earn a lot of money. However, I think this system is fair because even though people earn a low income, they still need to buy the basic necessities for their families. If they paid the same percentage of their income as the rich, the poverty rate of our country would increase hugely. Many of the rich think this system is unfair because they are paying a higher percentage of their income than the poor; thus the tax system is discriminating against them. Other disadvantages include:

1.       Prevents taking high paying jobs: Progressive taxation system may also prevent individuals from taking a high paying job because most of their income would be taken away as taxes. It also discourages individuals to work harder to gain higher incomes.

2.       Encourages emigration: High progressive taxation system can encourage high earning workers to move overseas to escape the tax system.

3.       Encourages hiding of assets: High progressive taxation system can also encourage high income earners to opt for off-shore banking by which they can hide their assets and save taxes.

Regressive tax system

The second tax system that I looked at is the regressive tax system. It is opposite to the progressive tax system. People earning a high income pay a lower percentage of tax than people earning a low income. However, it does not mean that lower income people pay more taxes, they just pay a higher percentage of their income in taxes. For example, if someone earning $ 40,000 per year pays 10 percent of his income he pays $4000. However, if someone earning $ 10,000, pays 20 percent of his income, he pays $2000.       Therefore, the higher income person is paying more money but the lower income person is paying a higher proportion of tax on his lower income.

In my opinion, the regressive tax system is unfair to poor people. Even though they pay less money than the rich, the government is taking a larger proportion of their income. That means that the poor have less income than the rich to pay for basic necessities. That’s why affluent nations don’t use this as an income tax system.

                    

Proportional tax

Proportional tax is a tax with a fixed rate like 10%. There is no change in the tax rate if incomes increase or decrease. It is also called a flat tax. It does not consider an individual’s circumstances. For example, if someone is earning $100, they have to pay 10 percent of their income which is $10 and if someone is earning $10,000, they also pay 10 percent of their income which is $1000. People like this tax because it treats everyone equally. It is easy to understand and it’s easy to calculate the amount of taxes owed. In this system, there would be no exemptions, deductions, or tax credits .Therefore, it prevents people from cheating and encourages people to earn the highest income possible which is a benefit for the government and the society.

However, in my personal opinion, I don’t think it is fair tax system because it takes more of a poor person’s income pay 10 percent than it does of a rich person’s income. Poor people may feel more burdened by this tax. They will have less disposable income after paying it than will affluent people.

My opinion

Before I studied these tax systems I had no knowledge of how governments levy taxes. Now I know there is no perfect tax system but some systems are fairer than others. Since all citizens pay taxes, the government should help them understand the tax systems. Also the government should understand that inequalities exist in citizens’ ability to pay taxes and consider those inequalities when levying taxes. In my opinion, the progressive tax system is morally the fairest system of the three. That doesn’t mean that I will enjoy paying high taxes when I’m earning lots of money in the future. However, it reflects the best way of achieving equality and fairness in the tax system.

https://www.youtube.com/watch?v=8DuFDXoJhEs – progressive tax

Tax Free Holiday

Tax Free-Holiday 

If you have lots of money, 2012, had one of the best tax days since the early 1930s: Top tax rates on ordinary income, dividends, estates, and gifts remain at or near historically low levels. That’s thanks, in part, to legislation passed in December 2010 by the 111th Congress and signed by President Barack Obama. Starting January, rates may be headed higher in both Canada and the U.S but the rich are not worried, they are able to afford their way out of paying taxes.

 For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate—what they actually pay—fell from almost 30 percent in 1995 to just over 18 percent in 2008, according to the Internal Revenue Service. And for the approximately 1.4 million people who make up the top 1 percent of taxpayers, the effective federal income tax rate dropped from 29 percent to 23 percent in 2008. It may seem too fantastic to be true, but the top 400 end up paying a lower rate than the next 1,399,600 or so.

That’s not just good luck. It’s often the result of hard work.. Much of the income among the top 400 derives from dividends and capital gains, generated by everything from appreciated real estate—yes, there is some left—to stocks and the sale of family businesses. 

As Warren Buffet likes to point out, since most of his income is from dividends, his tax rate is less than that of the people who clean his office.

Warren Buffet Net Worth: $ 58.5 Billion

What is a tax haven?  

A tax haven is a country that exempts foreign investors who hold bank accounts or set up companies in its territory from taxes. 

While citizens and corporations residing in the country are required to pay their taxes like elsewhere in the world, foreign investors enjoy, in most cases, total exemption, or at least a substantial reduction of taxes to be paid. Provided they do not carry on business within the tax haven itself. States that apply this kind of tax policies do so with the intention of attracting foreign deposits to strengthen their economy. Most of them are tiny nations with few natural or industrial resources. Their whole existence would be threatened were it not for the booming financial industry growing in the shadow of foreign capital.

Why is this problem?

Tax havens, also called offshore jurisdictions, have attracted an increasing number of foreign investors, especially in recent decades. Usually they are people and businesses fleeing their own country’s tax collecting voracity in search of a more favorable business environment. This is not surprising, since in some countries with high taxes, especially in Europe, the taxes paid by a person or business account for up to 50% of their profit.

This capital flight, of course, is not viewed favorably by tax officials of the countries that suffer from it, as in the end an important part of their tax revenue gets away. Therefore, they have tried to react with different measures to hinder the transfer of assets to tax havens or to make it unattractive.

But the new world order that emerged with the globalization of the economy makes it difficult to exert effective control over the movement of money. Trying to hinder the free flow of capital clashes with the claims of global trade liberalization, which is defended by, besides most companies and governments, also by such important institutions as the World Bank, the WTO (World Trade Organization) and the OECD (Organization for Economic Co-operation and Development).

On the other hand, the legal measures taken with the intention of hindering the outflow of capital, and which usually consist of an unfavorable tax treatment of investments in tax havens, have not yielded the expected results either.

This is because it is relatively easy to hide the ownership of offshore corporations or offshore bank accounts; so many people have simply opted to conduct their operations in secret.

What makes up a Tax Haven?

• ·         Personal data of owners and shareholders of companies are not listed in public records, or the use of formal representatives (called nominees) is allowed.
• ·         There are strict rules on bank secrecy. Data about account holders are only available to the authorities if there is evidence of serious crimes such as terrorism or drug trafficking.
• ·         Signing treaties with other countries involving exchanges of banking or tax information is avoided. Although this situation is changing in recent years.
• ·         Stability and monetary policy are promoted. Who would invest in a place with continuous coups d'état, wars or rampant inflation?
• ·         They have an excellent range of legal, accounting and tax advice services.
• ·         They often have good tourist and transportation infrastructure.

What can be done then against tax havens?

The main actions have been aimed at putting pressure on the governments of tax havens seeking to limit their confidentiality laws and bank secrecy. This is currently being done through various international organizations, usually under the banner of combating terrorism, drug trafficking and money laundering networks.

Check out these interesting videos to learn more: 

Tax free Vacation

Google's Tax Evasion Holiday

Starbucks, Amazon & Google UK Tax Avoidance