Dignity of work

Most of the time, I'll count work as a bad rather than as a good. We shouldn't evaluate policies on whether they make or kill jobs, except where they are specifically labour-market policies. Green policy shouldn't be judged on its job-creation propensities but rather on whether it achieves environmental objectives most efficiently.

But I'll make a slight exception for sheltered workshops. Employers finding ways to provide employment to the mentally disabled provide a sense of self-worth that's more valuable than wages paid. Where wages reflect marginal revenue product, they'll often be very low. But that's not the point. The business, whether charitable or commercial, has to at least not make losses if it is to survive. Absent strong wage subsidies, whether from government or from civil society, paid wages will have to be low where marginal product is low.

And so changes to New Zealand minimum wage legislation extending minimum wage protection to those in sheltered workshops, and lobbied for by advocates for the disabled, did harm when they, in conjunction with policy shifts at IHC, led to the closure of sheltered workshops.

Meanwhile, in Manitoba, Bill Redekop reports on the success of Mountain Industries, a sheltered workshop in the village where I went to elementary school. Manitoba sheltered workshops are allowed to pay sub-minimum wages, though there's some pressure to eliminate those provisions. I don't know whether Mountain takes advantage of sub-minimum wage provisions or whether those provisions will be eliminated. But I do hope that Mountain remains able to provide valuable opportunities for their workers.

I have an incredibly hard time seeing what public purpose is served by requiring that severely disabled workers be paid the minimum wage; an alternative policy instead providing wage subsidies for those workers achieves any reasonable equity objective sought by minimum wages but spreads the burden equitably across the community.

An odd kind of insurance

Sometimes, it's hard to tell the difference between insurance and lotto.

Recall that the general point of insurance is to equalize utility across world-states. So you forgo some utility in the good state of the world by spending money on insurance so that you get some bonus utility in a bad state of the world. Yeah, yeah, this requires that the marginal utility of money not get out of whack across the two world-states; if you don't get many jollies from money in the bad state of the world, this doesn't work. But let's hold that constant for this case.

A Manitoba pool and hot-tub company took out a weather insurance policy such that if temperatures hit more than 34.5 degrees Celsius on 18 July, they'd get a big payout. They then told customers that if the temperature hit 34.5 degrees, they'd get a full refund on any pool, hot tub, or water heater they bought between 1 March and 4 July this year.

In March, the owners of North West Wholesale -- a pool and hot-tub company -- took an insurance policy on the weather. This means, if temperatures reach more than 34.5 C at the Richardson International Airport today, people who bought either a pool, hot tub or water heater from the company between March 1 and July 4 will be eligible for a full rebate.


People may have scoffed at the store owners back in March on the gamble they took, but some 80 customers may be laughing their way to the bank, as Environment Canada is predicting a 35 C high for this afternoon.
...

But chances may have been better for Tuesday's weather, as Environment Canada predicts temperatures could be much higher in Winnipeg and southern Manitoba.

The projected high is 37 C, which will most likely prompt the weather agency to issue a humidex advisory, said Environment Canada meteorologist Eric Dykes. 

(HT: Mom)

Today's temperature at the airport reached 33 degrees (link valid 18 July but probably just gives current day's temperatures thereafter), so the insurance event wasn't triggered.

But if I were sinking a pile of money in a pool, I'd want the refund if the weather turned out too cold to use the darn thing rather than in the state of the world in which I'm very happy with my purchase. And so it seems more like lotto than insurance for the customers.

Seriously... daytime highs of -20 in winter (night-time lows of -40); +33 in summer. Winnipeg's only really liveable for five weeks around May-June and another five weeks mid-September through mid-October. The other 42, unliveable. And then there are the mosquitoes. On the upside, I don't think they've ever had an earthquake. Floods, often. Tornadoes, rarely. But never an earthquake.

Brew Winnipeg

Manitoba is finally set to loosen up its alcohol regulations. Back in Christchurch, a new Brew Pub is just opened despite all the earthquakes; Manitoba still has only two brewers - HalfPints (excellent) and Fort Garry (meh).

It looks like Neepawa will be getting an Estate brewer: they'll grow their own hops and barley. Didn't know that the Manitoba climate was really suited to hops, but will be really interested to see how this pans out on my next visit.

The owners of Luxalune Gastropub are taking the changes to provincial liquor laws and running with them -- all the way to Neepawa.

That's where Chris and Lawrence Warwaruk are planning to build Canada's first estate brewery -- The Farmery.

"It's no different than the estate wineries in Kelowna, B.C.," Chris Warwaruk said. "We're going to be growing the raw products, barley and hops, at the farm. We shouldn't have to buy hops from (growers in) Washington state that supply Miller, Busch and Coors."

Estate breweries are different from traditional breweries because the ingredients that go into the bottles are grown on the estate or farm.

Warwaruk said changes to Manitoba liquor laws, which passed last week, have opened the door for him and his brother to explore the estate brewery concept. The two biggest changes from the new legislation, which will take effect in November, enable restaurateurs to brew beer on-site by creating brew pubs and allow customers to take their own bottle of wine to participating restaurants.

The Warwaruks -- who grew up on a farm near Minnedosa -- plan to cut the ribbon on their brewery next spring. It will include a finished building and a plant. The hope is that it will attract beer-loving tourists from near and far for tours, too.

The adjoining fields used to be home to a U-pick strawberry farm but Lawrence Warwaruk has experimented with malt barley and hops this year and has plowed under some of his strawberries.

All they needed was that the government get out of the damned way. Congrats guys, and best of luck!

Regulatory earthquakes

In yesterday's post, I lamented the state of Manitoba's craft brewing scene compared to Christchurch. A town about two-thirds Winnipeg's size has more craft breweries making fantastic beer even after two really huge earthquakes than Winnipeg has after zero earthquakes.

Well, let's compare the regulations. The typical path for folks in Christchurch is starting out as a home beer brewer, then upgrading the kit a bit and selling at farmer's markets, then getting kegs into some of the bars in town that care about craft beer (Pomeroy's in particular), then getting into some of the New World supermarkets where the liquor manager cares about good beer (New World Parklands is great; South City isn't bad either). Regional Wines and Beer Store are great online shops that also help get craft beer to market. So long as the brewer is paying his alcohol excise tax, things are pretty easy. Cassels supplied the market using brew facilities in their garage 'till they found demand justified upgrading; they're finishing up a brew pub now in Woolston.

Here are the MLCC regs for Manitoba. Of particular note:

• Can only distribute beer to licensees within a designated geographic area. MLCC must approve the geographic area in writing and any changes to the area must be agreed upon between the MLCC and the microbrewery.
  • No chance of testing the market at craft sales or farmer's markets to see if your beer is really as good as you think it is. You've got to start big.
• Authorization by the Federal Government of Canada


• Manufacturing process including labelling in compliance with Canadian Food and Drugs Act and Regulations as directed by CFIA or Health Canada


• Approval from provincial and municipal health authorities


• The manufacturer must sell to the MLCC and buy from the MLCC all product that is to be resold in Manitoba
  • Best I understand things, this means a BrewPub has to sell its product to MLCC before buying it back to sell to customers.
• Exported (this includes to other provinces) product subject to conditions imposed by the federal government and the jurisdiction receiving the product.
• Only one type of manufacturer (Brewery, microbrewery, or brewpub) can be licensed at a single location unless otherwise authorized
  • I think this rules out the increasingly common NZ startup brewery that brews its product in another brewer's facilities: Number 8 Wired, Yeastie Boys - they're out.
• Maintain the same high standards for cleanliness and hygiene in their facility that all food production plants or restaurants must. Subject to inspection, ongoing testing at accredited labs.
  • This means stainless steel kit throughout and pretty much rules out using your garage as a startup venue. Brewers have to be high hygiene to avoid infection of the brew; the regs are going to be superfluous for beer quality but really increase production costs.

And, if the microbrewer wants to sell his product on-site, he needs a retail licence. The MLCC regulates selling prices. Here's what the brochure for prospective manufacturers has to say:

On the first business day of the week, manufacturers holding a retail licence must pay the MLCC for the amount of liquor they sold during the preceding week. They should:

• Make a payment equal to the MLCC's markup on each litre sold....

I think, but am not sure, that the MLCC markup is in addition to excise - that it's compensation to MLCC for the sale lost by MLCC rather than excise payment; the excise would have been paid on the manufacturing side rather than the retail side.

I'm seeking clarification from MLCC on a couple of these. But if that's how things run, it's no particular puzzle why there's no craft beer scene in Manitoba.

Let's hope the prospective changes to MLCC regs will fix things. As things stands, regulations do more harm to craft brewing in Manitoba than two earthquakes did to craft brewing in Christchurch.

Manitoba craft beer

Christchurch, with about 400,000 people, has a huge number of really great craft brewers. A short list, with apologies to anyone I've forgotten (it's not because I don't know your beer, it's because I've forgotten you're from Christchurch):

• Three Boys, whose Oyster Stout is truly excellent; other highlights: IPA, Wheat. I never got a chance to taste Aftershock, the beer that was in the tank when the 7.1 hit. Ah well.
• Twisted Hop. Their Nobokolov Imperial Porter is probably my current favourite NZ beer. Hopefully they'll be brewing again soon.
• Casels & Sons. Medicinal particularly nice.
• Harringtons. Probably produce the best value beers in the country than Wobbly Boot Porter and Clydesdale Stout, though some disagree. Beers that are great for drinking with dinner, but that you don't feel bad about using as base for lamb shanks.

If you expand to the South Island as a whole, with about a million people - roughly as many people as the province of Manitoba, you get to a whole ton more.

I'm in Winnipeg. It's (almost) a craft beer wasteland. Fort Garry is the main local brewer, but honestly, their Fort Garry Dark roughly matches a Speights Old Dark. Not a bad beer - the Old Dark is what I'll get at a Christchurch restaurant that doesn't have proper craft beer - but it doesn't really make the grade. Half-Pints is a recent addition that produces good craft beer - a nice IPA, a fun coffee stout, and a raspberry-tinged beer brewed in support of Winnipeg's Pride 2011 festival. Half-Pints is good. But how can it be that a town almost twice the size of Christchurch and that hasn't had two massive earthquakes has such a bland overall local beer scene?

Stay tuned for tomorrow's post, in which we'll see how Manitoba's alcohol regulations are more devastating to the Manitoba craft brewing scene than were two massive earthquakes for Christchurch's.

Hiatus

Where we're leaving.

(full series here, HT: Peter Cresswell)

Where we're going.

We fly out to Winnipeg today; we'll spend a week there before driving down to DC via Pittsburgh. Looking forward to seeing family and friends again and popping in on coauthors along the road.

But we weren't banking on Manitoba being in flood. At least my folks' place near Starbuck doesn't yet seem affected.

Manitoba, Pittsburgh or DC folks interested in beers can find me on email or @EricCrampton.

I am really looking forward to having nights interrupted only by an angry one year old (Bryan: folks' mileage may vary on the whole Ferber thing) rather than that plus aftershocks.

We're back in Christchurch end June and trust our housesitter won't throw too many wild blogger bashes while we're away.

Blogging will be light from the road; I will be looking out for the budget though.