In politics timing is everything. Regrettably, the Transitions Report was put forward at the most inopportune time for a social assistance overhaul. The victory of neo-liberalism over Keynesian policies that had formed and shaped the emerging the welfare state in Canada was indicative of what was to come. Under the neo-liberal market model of social assistance, recipients were deterred from applying and forced to find the shortest path into low-waged dead-end jobs through brutal spending cuts, as for instance in a reduction of 21.6% for single adults in Ontario. Since then, a number of studies and reports tinkered with various proposals to modestly alleviate the burden of having to live on social assistance but at the least possible costs to government spending.
But then came COVID-19. Even before its arrival, the financial crisis of 2008/9 caused a grave crisis for neo-liberalism. It triggered a serious global recession that left the failures of neo-liberal doctrines fully exposed. As the financial markets collapsed like a house of cards, growth faded, unemployment grew, forcing many people into bankruptcy. Many became increasingly frustrated with the twin policies of cuts to social programs in contrast to financial bailouts and corporate tax cuts for the wealthy.
New Economic Thinking
A number of leading economists were ready to give neo-liberalism the death knell. They argued and strongly advocated for a fundamental re-thinking of conventional economic theories. Our own thinking how to free social assistance from the debilitating role it has played in the past has been decisively influenced by the following three thinkers.
- Mariana Mazzucato in The Value of Everything challenged the financialization of the
economy based on prices that generate private wealth accumulation by value extraction
and discounts true value creation as a collective process of government, education, public
and non-profit agencies. She argues for economic hop, a new type of economy, one that
will work for the common good. - Kate Raworth’s Doughnut Economics refutes the perpetual growth model of traditional
economics and draws a picture of the economy that is both distributive and regenerative
by design, i.e. sharing values as it is created by collective action rather than relying after
the fact on re-distributing income/wealth from the few who gain from economic activity
and the full engagement of people in regenerating Earth’s life-giving cycles so that we
thrive with planetary boundaries. - Stephanie Kelton promotes the “Birth of a People’s Economy” that is not consumed with
the question: “how will we pay for it? In that regard, Kelton advocates for aggressive full
employment policies during recessions so that our key human resource is not wasted and
important care and service work in the community gets done.
Thus in early 2020 when the pandemic set off yet another grave global recession wealthy
industrialized countries did not hesitate to engage in massive government spending to keep
people housed and fed. The neo-liberal idea of the role of the state was turned on its head. The austerity state quickly became the banker and activist state. Re-legitimatizing the
involvement of the state for the common good as in the Keynesian era, Ottawa was able to
introduce the Canadian Emergency Response Benefit (CERB), replacing income for those affected by Covid-19 related restrictions and lockdowns.
CERB replaced two-thirds of earned income at a monthly floor of $2,000. In 2019, median
income in Canada was $36,900 ($3,075 a month), leaving many in a pinch. Working age
individuals without any workforce attachment did not qualify for CERB. For those who did, even when only partially, CERB was ‘a lap of luxury’ compared to the meagre Ontario Works
payments they are expected to live on (Greafe and Ferdosi, The Conversation, May 2, 2021)
The pandemic demanded greater attention be paid to both social assistance levels and wages
below a livable income floor. The similarities of precarious income conditions of the working
poor and social assistance recipients living in deep poverty came to the forefront, re-awakening an interest in proposals like those in the Transitions Report.
Its core values and ideas were entirely consistent with our purpose of transforming social
assistance from a social commons perspective as set out in our five pillars. The first two pillars are of particular interest to shape the transition to an income system that combines livable income floors with productive and rewarding work.
- Equitable, Inclusive Communities which require the elimination of all forms of social,
economic, and environmental injustice and the assure that everyone on society has the
income, resources, and supports to participate in their communities and society at large. - Social Rights and Protection: Acceptance of collective responsibility to ensure that all
members of society enjoy a livable income and the opportunity to engage in meaningful,
productive work.
They also specifically address the importance of civil society groups in inclusive, non-discriminatory communities to overcome the deep injustice that prevent so many from having a chance to “live a valued life” to use the words of Amartya Sen. In a profit-driven, growth oriented economic system this is no small task.
CERB offers a unique opportunity to advance to a new foundational income support program,
(ISP) in forging ahead towards an enlarged and strengthened income protection system for the betterment of the economically most vulnerable members of society. It would include both thoseout of work as well as the working poor.
Livable Income and a Job Guarantee
This would involve transforming the existing social assistance system, and focus on both assured access to an income floor and support transitions to employment. It would also be integrated with a new federal Jobs Guarantee program focused on community-building. Cash payments are not enough to support either group to become self-supporting. The next decade will involve massive shifts in jobs and skills as we move away from extractive industries and toward more caring and green economy work. A universal jobs program could be closely aligned with such shifts and focus on supporting local communities to successfully make these transitions.
It would also help to ensure that the Canadian economy can both respond to the challenges of the global marketplace while also being embedded within local communities and help to achieve a socially desirable and just distribution of jobs and incomes for all Canadians. There are tens of thousands of people who could be working but are not. Many others are working part-time but seek full-time work. A job guarantee would be designed to change this. But how? By a permanent, federally funded but locally administered program providing anyone willing to work with a job, full-time or part-time, that best suits their personal or family circumstances.
The ISP Benefits, coupled with an $18 an hour minimum wage and a living wage of at least $20 an hour (through the federal program) would largely end the exploitation of the working poor. A job guarantee also provides the best chance for those struggling with mental health or addictions, who need some accommodation and support, or who are transitioning and need to learn new skills.
Whether full-time or part-time, dependent on the needs of applicants and their local communities, they do not offer dead-end jobs but would allow people to acquire skills and work experiences that could serve as a bridge to better paying jobs in either the private or public sector. The actual number of these stepping-stone jobs required would vary with the boom-and-bust cycles of the economy.
ISP therefore, combining income with paid work, would bring working poor and social
assistance recipients together under the same umbrella within a two forked delivery system, an income support worker and an opportunity planner as outlined in the Transitions Report.
Setting the income floor for both groups at the same ‘livable’ amount would do away with the less eligibility principle as well as the so-called welfare wall if social assistance benefits are
extended to the working poor. Costs would be paid by their employer, benefiting from not having to pay the employers contribution towards Employment Insurance. The effect of a livable wage would permeate though the wage system since worker tend to like maintaining wage differentials between each other (Kitchen, Centre for Social Justice, 2005). Employers would have to pay, of course, higher wages to attract workers. If we want to see a transition from a business-oriented economy to a “people’s economy” this is both unavoidable and long overdue.
The current Ontario government appears to be lost in a time warp, persisting in its efforts to
justify and rationalize an inhumane and harmful system that forces more than a million of its
residents to live lives of desperation and misery. The failures and costs to society of such
approaches are well known. The impact of such deep poverty results in health inequalities
related to mental health, hospitalizations, child development, reduced educational outcomes, and many more. It is time to act now.
When it comes to pay for livable income standards, the question then isn’t how can we afford it but rather what is the best way to resource it. We are far from done in thinking how to support people in need in fairness and justice.
The challenge to rethink social assistance in the light of the commons is both conceptual and
concrete. It requires an understanding of the commons as a social practice as the starting point for transforming social assistance that has be based on the material and psychological needs of the people involved. We must recognize that our common humanity connects us to one another and to the planet, our common home. But “Commons work only if everybody is included in the community and nobody is excluded” (Stefan Meretz, 2012:32). This is far from being the case today.
The driving momentum for change has to come from the strength and persistence of civil society for building a better future where the poorest of the poor, recipients on social assistance and/or caught in underpaid precarious jobs are integrated into the Social Commons. Navigating a successful journey to such a goal will require commitment, boldness, and energy but also never to lose sight of the relational bonds that hold us together in the social commons.
