Chapter 16: Vancouver needs a plan for the recession

http://www.vancouversun.com/news/Vancouver+needs+plan+recession/1404421/story.html

Summary
Vancouver City Council sees the recession as a serious matter and has decided to take matters into their own hands by setting their priorities in place. They have decided that their main concerns were “establishing a mental health advocate, enhancing child care support, and creating a green grants fund”. It was suggested that residents of Vancouver could face a potential property tax increase of more than 11% but city staff have already did some calculations and decreased the increase to 6.3%. City Manager Penny Ballem is already aware of the fact that as taxpayers lose their jobs, they’re hopelessly watching the value of their property decrease, so that’s why Ballem has imposed a hiring freeze at city hall. There is a need for stopping hiring because two-thirds of the city’s operating budget is used towards payroll. Despite the hiring freeze, there are exemptions for any unfilled positions that are sufficient in operating the city of Vancouver. Right now they have in mind a basic recovery plan that will keep taxes low, improve the efficiency of city services and encourage the kind of investment that will create jobs. Such plan includes: cutting spending, introducing zero-based budgeting, using benchmarks, keeping taxes low, and encouraging investments.

Connection
Learning about payroll in Chapter 16, we can relate this article directly and indirectly to the income of the city workers as well as the taxpayers. All over the city, the nation, and even internationally, workers are experiencing lay-offs from their jobs due to the recession. Citizens retrieving their pay checks will notice that their net pay (the amount they are paid) is not equal to their gross pay (the amount they earned before any deductions were made). After determining your gross pay, the employer has to make a whole bunch of deductions which include Registered Pension Plan, Union Due, Income Tax, Employment Insurance, Health Insurance, etc. The deduction for Employment Insurance is for when someone gets laid off from work or they are unable to work due to various reasons that could include health issues. But to tie in with our article, we will take into consideration that the workers have been laid off, which is very common because of the recession. While the worker is at home searching for a job, they are entitled to receive Employment Insurance because they have contributed to it while they were employed. Now that they are unemployed they can have the benefit of a slight income during their transition from the last job to the next.

Reflection
It is very wise of our country to have the workers pay Employment Insurance. This is extremely beneficial to workers that are out of job and out of income to support themselves and their family. So by having the government take a portion of their gross pay each pay period, although it may sound dumb at the time, is actually for their own good. Since while they were employed they contributed to the Employment Insurance fund, now that they are unemployed they will be offered payments out of this fund to assist them as they seek for a job.