Posts Tagged ‘economics’

Ontario NDP losing its voice on minimum wage

Tuesday, March 4th, 2014

“When it came to issues affecting the most marginalized in our society, including the working poor, the NDP was once a prophetic voice in Ontario politics. Sadly, that voice now speaks in whispers.”

Read my latest op-ed for The Toronto Star here

Ontario’s Poor Can’t Wait

Thursday, March 8th, 2012

In my latest op-ed for The Toronto Star, I discuss how quiet acceptance of austerity is not a realistic option for those living on the economic edge.

During the last two weeks in Ontario politics, we have seen a tale of two reports. The Drummond report has received a great deal of attention and rightly so: as the Star’s own Martin Regg Cohn put it, “Cutbacks are back and bigger than ever. And this time, they’re here to stay.” Millions of Ontarians, but especially the poor and middle class, stand to be impacted should the government act on Drummond’s recommendations.

Yet another report, that of the Commission for the Review of Social Assistance, slipped under the media’s radar and was greeted with little fanfare by the government and general public alike. This report discusses different approaches to improving some of the key areas of the province’s welfare system and is an important step in the broader review process headed by ex-StatsCan chief Munir Sheik and former United Way of Greater Toronto CEO Frances Lankin.

The review of social assistance plays a key role in the provincial government’s poverty reduction strategy, announced by the premier and welcomed by anti-poverty advocates back in 2008. Sheik and Lankin have embarked on an extensive consultation process, speaking with social workers, policy experts, business leaders, people with lived experience of poverty, and anti-poverty advocates. Their final report, which will make recommendations that will enable government to “remove barriers and increase opportunities for people to work,” is to be released this summer.

While the Drummond report takes a largely hands-off approach to social assistance, deferring to the work of the commission, much in it runs counter to the spirit and stated goals of both the review of social assistance and the broader strategy of poverty reduction. For one, Drummond recommends rolling back the Ontario Child Benefit (OCB), a subsidy that helps low-income families provide for their children. The OCB has been partially credited with the small but nevertheless important reduction in child poverty Ontario has seen over the past few years.

But more generally the report is silent on the concerns of the poor, from much-needed increases in child-care funding to the construction of more affordable housing. Drummond was, after all, primarily tasked with discerning where to make cuts, not how to expand social programs.

If acted upon, Drummond’s austerity package could well push Ontario’s unemployment rate into double-digits. With the federal government’s continued reticence to expand eligibility for employment insurance, thousands more Ontarians could turn to a welfare system that currently does more to punish than help the poor, who have yet to recover from the 22 per cent cut to welfare imposed by the Harris Tories back in 1995. McGuinty has raised rates slightly, but these increases have not kept up with inflation. If welfare was to be returned to pre-Harris levels, the government would have to raise rates by close to 60 per cent. You can be sure that such an increase is not in the cards in the current political climate.

So the next few years, likely the next decade, look tough for low-income Ontarians. Lower child-care subsidies, larger waiting lists for social housing, persistent unemployment and more people caught in the dire dilemma of whether to feed the kids or pay the rent. Changes to employment standards and labour law, which could create the conditions to lift people out of poverty, will be derided as “unfriendly to business.”

How then do the poor make gains in a climate of austerity? Before we mine history for answers we must first ask: “Who are the poor?” The obvious answer is, “those living at or below the poverty line,” but many of us live one paycheque away from poverty. What happens to social assistance and other social supports should be a concern for us all.

And as a recent Metcalf Foundation report concluded, between 2000 and 2005 the number of working poor increased by 42 per cent, numbering 113,000 people in the Toronto region alone. Those numbers have certainly risen since the Great Recession began in 2008. And an even larger number of people are near-poor. The poor are not only those living on social assistance.

Before the great labour struggles of the 1930s and ’40s, the poor were, like today, both working people and those out of work. Those struggles led to the legitimization of unions, the construction of the welfare state, and a greater share of society’s wealth going to labour.

In the 1960s, unions and anti-poverty organizations pushed for the expansion of social programs and lessened inequality. They marched, they protested, they made noise.

In the mid-1980s, anti-poverty, labour and women’s groups mobilized to influence the direction of the provincial Liberal-NDP coalition’s social assistance review. Poor people’s marches snaked through three of Ontario’s largest cities. The end result was a 25 per cent increase in welfare rates and the humanization of many aspects of a stigmatizing and punitive system.

History shows us that poor people’s silence will be met with government inaction. As American academics Frances Fox Piven and Richard Cloward put it in their classic book Regulating the Poor, “A placid poor get nothing, but a turbulent poor sometimes get something.” The Drummond report tells poor people they must wait. Now it is up to the poor to reply: “We will not.”

Simon Black is a researcher in urban social policy at the City Institute at York University and a member of Peel Poverty Action Group.

published in The Toronto Star, March 3 2012 IN6

The Shock Doctrine, Toronto Style

Saturday, April 23rd, 2011

The Shock Doctrine is coming to Toronto! In my latest contribution to Canadian Dimension, I argue that Mayor Rob Ford’s strategy has much in common with the right-wing machinations   documented in Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism

I doubt Rob Ford reads Naomi Klein. Between studying committee reports and football playbooks, the new Mayor likely doesn’t have the time or the inclination to keep up with Canada’s most prolific left-wing journalist. Nevertheless, Ford’s approach to urban governance cannily resembles the political strategies of right-wing politicians laid bare in Klein’s international bestseller The Shock Doctrine.

The book traces how, beginning in the 1970s, neo-liberals and neo-conservatives have exploited crises (economic and otherwise) to advance an agenda of deep cuts to social spending, government deregulation and privatization. Nobel-prize winning economist Paul Krugman calls the shock doctrine an “agenda that has nothing to do with resolving crises, and everything to do with imposing their (the right’s) vision of a harsher, more unequal, less democratic society.”

Take the case of post-Katrina New Orleans. In the wake of the disaster, think tanks such as the American Enterprise Institute (Canada’s equivalent to the Fraser Institute) and Republican politicians descended on the city, pushing the privatization of public housing and public education, dismantling what little of a welfare state New Orleans had. This served the ‘free market’ ideology, most clearly articulated by American conservative Grover Norquist, who once said “I don’t want to abolish government. I simply want to reduce it to the size where I can drag in into the bathroom and drown it in the bathtub.” But privatization also served the corporate interests close to the Bush administration who cashed in on the fire sale of public assets. New Orleanians, displaced and distraught, had little say in the matter.

Canadian neoconservatives have long casted an envious eye at their American cousins, and Toronto’s new Mayor has surrounded himself with strategists and backroom players whose membership in the Conservative Party, the Canadian Taxpayer’s Federation, and think tanks like the Fraser Institute neatly overlap. The Common Sense revolutionaries, many of whom cut their political teeth in the downloading and amalgamation years of the Mike Harris Tories (from which the city has yet to financially recover), have reappeared in urban guise, finally having won control over a much sought after prize: the left-leaning City of Toronto, with its myriad social programs and ‘big government.’

Yet according to the logic of the shock doctrine, Ford’s team needs a crisis to push through its agenda. Since only 25% of eligible Torontonians voted for Ford, a full-scale assault on the City’s social services would not be popular. Fortunately for Ford, he rose to office during a world economic crisis that left many Torontonians more economically insecure, wary of tax increases and ‘misspent’ tax dollars. From Europe to North America, governments are calling for ‘austerity’ in the name of debt reduction and fiscal balance. Ford won the election by articulating a simple narrative of what was wrong with the city: too much wasteful spending; City Hall’s so-called gravy train. Ford named lavish retirement parties and councillors’ penchants for taking taxis, cleverly avoiding labelling the City’s social services ‘gravy.’

Most Torontonians do not regard nutritional programs for low-income children or green energy initiatives as wasteful spending. Many agree that such programs are the markers of a world-class city. While people are rightly concerned when councillors casually spend tax-payer dollars on superfluous expenses or when a public agency is careless with its budget, actual instances of this are few and far between. Ford’s strategy has hinged on reframing most, if not all, government spending as inherently wasteful. To his chagrin, potential allies on Council, like Mary-Margaret McMahon, have discovered that “the gravy’s not flowing through city hall like originally expected.”

The second crisis that has opened the door for Ford’s agenda is the crisis of confidence in public institutions. The outdoor workers’ strike, the media hammering of errant TTC employees and the events at Toronto Community Housing have all played nicely into the Mayor’s hands.

Union-busting is at the centre of the shock doctrine, as public-sector unions are the first line of defence against cuts, deregulation and privatization. As Klein notes, in post-Katrina New Orleans, the introduction of charter schools (effectively privatizing public education) broke the back of the teachers’ union. More recently, the Republican governor facing a fiscal crisis in Wisconsin has wiped out the collective bargaining rights of almost all public sector employees.

With a complicit provincial government, Ford has succeeded in designating the TTC an ‘essential service’ and plans to privatize garbage collection, effectively firing the city’s unionized employees. The Toronto Community Housing ‘scandal’ has provided the Mayor with the necessary excuse to review the City’s role in public housing, again with an eye to privatization. We can expect Ford to shed the City’s unionized public child care centres in the next round of budget cuts, contracting care to non-union, for-profit providers. Freezing property taxes and eliminating the vehicle registration tax ensure the need for increased user fees and higher TTC fares; creeping, less obvious, forms of privatization.

The Ford agenda has very little to do with resolving a ‘crisis,’ real or perceived, and everything to do with remaking Toronto in a right-wing image: a leaner, meaner city, where the market is free and the public sector and its unions disciplined.

Published on 

The Case for Equality

Friday, April 1st, 2011

In my lastest contribution to Canadian Dimension, I review Richard Wilkinson and Kate Pickett’s The Spirit Level.

A review of The Spirit Level: Why More Equal Societies Always Do Better by Richard Wilkinson and Kate Pickett
Penguin, 2010

The Spirit Level’s argument is simple: In rich countries, a smaller gap between rich and poor means a happier, healthier, and more successful population. Along a range of social indicators, including teenage pregnancy, mortality, reported happiness, obesity, drug use, and the incidence of violence, more equal countries perform better. Overall quality of life – for all citizens – is thus deeply related to levels of economic inequality.

Wilkinson and Pickett produce data from 23 rich countries and 50 states to make their case. Using plenty of scatter graphs, regression analysis, and short, punchy chapters organized around the various social indicators, The Spirit Level shows that increases in social inequality are the source of many contemporary social problems. More equal Scandinavia and Japan consistently score better than the highly unequal US and the UK. Canada typically sits somewhere in the middle, flanked by the likes of France and Switzerland.

With socialists searching for new answers to old questions in the wake of the global economic crisis, The Spirit Level marks one contribution to something of a social democratic redux. With Third Way social democracy utterly disgraced by its affiliation with neoliberalism, social democratic soul searching has produced some lively polemics of late, from Tony Judt’s Ill Fares the Land to Will Hutton’s Them and Us. Ed Miliband – who keeps a copy of The Spirit Level close at hand – may be the first leader of a major European social democratic party to openly question the nostrums of the Third Way project and commit to closing the gap between the rich and poor.

This rethinking of social democracy is important. Third Way social democrats weren’t overly troubled by economic inequality; they committed to reducing absolute poverty but left widening disparities untouched. Their focus on targeted social investments in human capital development (through policies like early childhood education and job training) was grounded in predilections about the inevitability of globalized capitalism and the need for workers to adapt to the new competitive environment.

And Third Way disciples such as Tony Blair praised financial deregulation and innovation for the role it could play in ‘growing the economy’. A bigger economic pie, they argued, meant a bigger slice for workers, just a disproportionately smaller one than was dished out to them under the post-war compromise, with CEO salaries and investment banker bonuses reaching grotesque levels under neo-liberalism.

The beauty of The Spirit Level is that it puts economic equality back at the center of social democratic politics. The book’s drawbacks are in failing to adequately address the political limits to economic equality under capitalism. Policies that will affect the distribution and redistribution of wealth, from increasing trade union bargaining power to more progressive income taxes, are recommended by Wilkinson and Pickett. But their argument that policies that create equality should receive broad support across class lines, as it stands to benefit all, is naively optimistic; class struggle still matters. The rich may fear the type of violence that characterizes highly unequal societies, but they are more likely to build bigger walls around their gated communities than raise the red flag of egalitarianism in response. It is the hard work of everyday politics – from community organizing to political education – that will bring about more equal societies. While The Spirit Level doesn’t pretend to be a ‘how to’ guide for political action, it does confirm with hard science what we on the left have known intuitively for years: equality is not only morally right, but good for the mind, body and soul as well.

Published in Canadian Dimension March/April 2011

Debt, Riots, and the Great Recession: Making sense of the Greek debt crisis

Friday, July 2nd, 2010

I made a recent appearence on DisRespect radio to discuss the Greek debt crisis and the mass mobilization of Greeks opposed to the government and European Union’s plan to deal with it. Follow the link below to listen:

Not a Dismal Scientist: A Review of Jim Stanford’s Economics For Everyone

Friday, September 11th, 2009

On the cover of Jim Stanford’s book Economics For Everyone there is a blurb by Naomi Klein that reads, “Stanford is that rare breed: the teacher who changed your life. He has written a book — both pragmatic and idealistic — with the power to change the world.” Anyone who scoffs at Klein’s description is not familiar with the work of Jim Stanford. For Stanford is anything but a dismal scientist: in his economic writing he makes clear complex concepts and processes, cuts through the ideology of the ruling class and their servants in the economics profession, and empowers the everyday people upon whose labour our economy rests. And he does this mercurially through a variety of mediums, whether in his column for The Globe and Mail, appearing on CBC television and radio, or in his work for the Canadian Auto Workers union. He’s Canada’s answer to American public intellectuals such as Paul Krugman and Joseph Stiglitz — only more radical — and indeed our most formidable political economist since John Kenneth Galbraith migrated south so many years ago.

It’s only fitting then that Stanford would undertake the sorely needed task of writing a popular introduction to modern capitalism. Such books face a dilemma: do they provide a thorough but lengthy guide to the subject or risk dumbing down the material in the cause of accessibility? To his credit, Stanford has written an accessible but methodical introduction to the economics of capitalism which explicates the subject from the ground up, beginning with a discussion of the basics (work, tools, and profit) to the complexity of globalization, financial markets, and the causes behind the peaks and troughs of our volatile economic system. The book’s conclusion, A Dozen Big Things To Remember About Economics, is an excellent capstone which lays bare the absurdity of neoclassical economics. The witty illustrations of Tony Biddle that accompany Stanford’s text make the most serious and demanding subject matter a little more bearable.

Socialists might be somewhat disappointed with the space that Stanford devotes to a discussion of alternatives, but the absence of a blueprint for a democratically controlled socialist economy is less a comment on the author than it is on the current impasse of socialist politics and thought. With the current economic crisis, the book may be in need of a second edition. While the imbalance between the real productive economy and the speculative paper economy that has been a theme of Stanford’s work for years gets decent treatment, Economics For Everyone was published just prior to the global meltdown of the capitalist economy. However, a great addition to the book is the accompanying website ( which contains lesson plans for educators, including a sample course outline, lecture slides, and a comprehensive glossary of terms. While the lesson plan section of the site is not complete, it is due to be finished in the near future.

All in all, Economics For Everyone is an invaluable book and a necessary addition to the library of popular educators, trade unionists, activists, or any person trying to make sense of the conundrum that is modern capitalism. And as Stanford makes clear, the first step to transforming the system is knowing how it works and for whom. To this end, Economics For Everyone has made a vital contribution.

Published in Canadian Dimension Volume 43, Number 5 Sept/Oct 2009

Neoliberalism’s Legacy: A Gaping Hole in Canada’s Social Safety Net

Tuesday, February 10th, 2009

There’s a hole in Canada’s social safety net and the evidence is all around us: from the homeless on our streets to the growing number of our fellow citizens who rely on food banks for their daily sustenance. The hole was made by successive governments whose mantra of paying down the debt and controlling inflation at any and all costs has put our country in a precarious position as we slide further into economic despair.

It didn’t have to be this way. The Great Depression highlighted the need for a stronger social safety net. In the post-war years, countries in the industrialized world set about building a welfare state and implementing a regime of social citizenship. The idea of social citizenship and the social rights it entailed, as British sociologist T.H. Marshall so eloquently theorized, was necessary for the fulfillment of civil and political rights. For Marshall, without a guarantee of the basic necessities of life and protection against the vicissitudes of the market, civil and political rights could not be exercised to their fullest extent and citizenship thus remained incomplete. Post-war legislation, from public pensions and social housing, minimum wages to welfare, guaranteed citizens the right to retire in a state of dignity, the right to shelter, and the right to work at a decent wage and have access to material support from the state when unemployed.

There have always been exclusions and silences in Canada’s regime of social rights. Aboriginal people, immigrants, and other racialized groups could not enjoy the benefits of social citizenship to the same extent as others. And prior to the struggles waged by the feminist movement in the 1960s and 70s, women primarily had access to the social wage through their male-breadwinner husband.

But despite these limitations, social citizenship was widely recognized by states and citizenry alike as a legitimate and worthwhile ideal. As the economic clouds of the 1970s formed and governments turned their attention to fighting inflation, social citizenship lost favour among ruling elites. In the era of neoliberalism, where governments are concerned with rolling back the state and allowing the market to work its “magic” for the well being of “all”, social rights fell victim to successive cutbacks in government expenditure and an ideology of individualism. Social policy became synonymous with, and subsumed under, employment policy: The goal of government was not to provide protection from the vagaries of the market, but to put people to work so they could protect themselves. The social safety net became a trampoline, bouncing those who had fallen on hard times and had become reliant on government support back into jobs, no matter what their wages or working conditions.

The impact has been devastating. Not only do we see rising inequality and poverty, the growth of the working poor and the homeless, but the economy’s ability to recover from economic downturns has been severely hampered by the withering away of what economists call the automatic stabilizer. Typically, as the economy enters a downturn, government tax receipts fall, expenditures on income supports rise (as more people are laid off) and the government likely runs a deficit (assuming it make no cuts in expenditures). The automatic stabilizer refers to that increase in government expenditure on income supports (such as welfare and EI) that occurs in an economic downturn and thereby props up aggregate demand (people’s ability and willingness to buy goods and services) and in theory, eases out the recession. Yet the automatic stabilizer loses its impact as the government dismantles the welfare state and undermines social citizenship.

Take the case of Employment Insurance. What was once a right has become a luxury for the few, as millions of workers facing unemployment during this crisis will not be able to access EI and instead must rely on that program of last resort, welfare or social assistance, which has been severely undermined by cutbacks and downloading. Currently, only 54 per cent of the unemployed are eligible for EI benefits with 41 per cent actually receiving them. In an effort to make our labour market conform to the neoliberal mantra of “flexibility” and “competitiveness”, these reforms can have the perverse impact of drawing out recessions over a longer period of time.

As the economic crisis has so devastatingly demonstrated, neoliberalism as a financial model has failed. Deregulation of financial markets and a skewed distribution of the economic surplus has created a series of speculative bubbles, from dot-com to real estate, that have done little to promote sustainable economic growth and have left markets floundering in their wake. As a social model, neoliberalism cut a hole in the post-war safety net, weakening the welfare state and the social protections and regime of citizenship it entailed. Living through boom times, although evidence of this hole was apparent amongst society’s most marginalized, buoyant markets and consumer credit meant less people fell back on the safety net. For many, the size of the hole was masked. The markets are no longer buoyant and consumer credit is drying up. As the economy plunges into a deep recession and unemployment grows, if government’s at all levels don’t act, we are about to see how big that hole really is.

Published on, Feb 10 2009