Transcript
Speaker: I'm Jane Williams. This is the Red Eye Podcast. You can hear our live broadcast on Saturday mornings from 10 till noon at 100 .5 FM in the Lower Mainland. Today we're bringing you a talk by economist Marjorie Griffin Cohen. On September 14th, Cohen gave the 2022 Gideon Rosenbluth Memorial Lecture at an event organized by the Canadian Centre for Policy Alternatives BC office.
Speaker: Her talk was titled, Handled with Care, Growth Through the Care Economy Benefits People and the Climate. And in the talk, she looks at the blind spots in economic thinking that devalue the care economy and in doing so miss opportunities for expanding the economy in a way that meets people's needs and addresses the climate crisis. Here's Marjorie Griffin Cohen.
Speaker: I'd like to thank the CCPA and the UBC Economics Department for the invitation to deliver the Rosenbluth lecture today. Gideon was one of the very first people I met when I moved to BC and I really admired his work and most of all his dedication to progressive public policy. Today I'll talk about the need for a better understanding of the care economy and government economic policy.
Speaker: The COVID -19 pandemic was a crisis that exposed decades of neglect of public services in Canada. It also demonstrated how important the care sector and care workers are, both to people and to the reasonable functioning of the economy. Specifically, the pandemic showed how years of inadequate spending and planning on long -term care meant Canada
Speaker: had the highest death rate of people from COVID in long -term care among OECD countries. And that's among the 38 richest countries in the world. The pandemic showed that because of inadequate planning for labor needs, chronic labor shortages were evident in most aspects of care. And that's a condition that escalated even after the pandemic. So now we have shortage of care aides, nurses, paramedics, doctors, childcare workers, and there's a long list.
Speaker: It especially highlighted the very low wages and precarious working conditions for a large group of care workers, a group highly overrepresented by women and those from racialized and immigrant groups. It showed that early childhood education and care is absolutely crucial and how its absence meant that many women just could not work and the economy suffered. The underlying problems predated the pandemic, but they were so chronic they tended somehow
Speaker: not to be visible enough to compel governments to develop significant new programs. Or if they were visible, governments easily shifted blame to other or previous governments and said it would take a really long time to fix and they could only provide slow incremental changes. Unfortunately, in the post pandemic period, once again, while the problems are acknowledged, they are not the focus of major government programs or action.
Speaker: Our one exception is on childcare, and that shift began by the federal government before the crisis of the pandemic, although it will take a long time before there are enough childcare spaces. Many care disasters of the pandemic were entirely preventable if we'd had the care sector we should have had. But now that people are back to work, kids are back in childcare and school, families are allowed back into long -term care, nothing really substantial is changing in the care sectors.
Speaker: And we're pretty much back to normal in the way the economy is run. The big problem is that governments are treated as pure expenses normally by the government. And it's one that's paid for by the other sectors that are considered economic drivers.
Speaker: that are most productive. And these sectors are resources, manufacturing, and technology in the export sector. Resource development, which includes exporting liquefied natural gas to Asia, developing new mines, and building the proposed Site C hydroelectric GAN, represents an opportunity to ensure BC's place as an economic powerhouse in Canada, while providing continued support for education, healthcare, and social services
Speaker: and public infrastructure. Now this is by Christy Clark, who was the minister quite some time ago, but I'm using it because it shows in one sentence very clearly that cause and effect between growth in areas like resources and its use for social programs.
Speaker: But the economic approach is the same now and it is common across Canada. This is a common view from economists whenever arguments are made and that governments need to kickstart the economy. Real investment in buildings, structures, equipment, tools and machinery is the most important leading edge of growth and job creation in the economy.
Speaker: The main points that I want to convey to you today are that there is a blind spot in economic thinking about the care sector that fails to understand the significance of care to the economy. And that relates to what is understood to be crucial and productive economic activity. The care economy can and should be considered a significant contributor to economic growth.
Speaker: Economic growth and care is especially significant in the economy that needs to deal with climate change. Growth through care is not only the ethical approach for the future, but will stimulate the economy in ways that are much cleaner than other forms of activity.
Speaker: Now, first of all, I want to look at what is the care economy? The care economy is very large part of the total economy and encompasses both paid and unpaid work involved in the reproduction and care of people. Now, this is an enormously broad definition, but its strength is that it acknowledges the areas of unpaid care worker also require the attention of governments. But even within the paid sector of the economy, the care sectors are large.
Speaker: They include the entire range of health and education services in addition to government programs that are crucial for maintaining income and health, things like employment insurance, paid sick leave, social housing, social assistance, labor standards, and services related specifically to disadvantaged populations. At this point, there's no formal definition of a care economy by governments or international bodies.
Speaker: But the tendency is to use a limited approach when defining the care economy. And that's to include all paid aspects of education, including early childhood education and care, and all aspects of health care, including long -term care and home care. And of course, social assistance. These are things that are provided by governments.
Speaker: Even using this restricted approach, which I will use today, the care infrastructure is the biggest employer in Canada, with the industrial sectors of health, social assistance and education accounting for at least 21 % of the total paid labour force. Health and education alone account for at least 12 % of the GDP, contributing more to total income of the economy
Speaker: than sectors such as manufacturing or oil and gas or finance. So it's a big part of our economy. Now Canada has fallen behind other countries in providing care. The decline in the public sector dealing with care in Canada has had a long trajectory, but it came really transcendent in the period after the 1994 -95 federal budget
Speaker: and after NAFTA came into play, and when we had the escalation of the notion of austerity in government budgets across the country. Austerity budgets are characterized by progressively lowering taxes and pursuing the manic drive to be balanced at almost all costs, even when real interest rates were about 1%, which meant borrowing costs nothing. Another significant precursor that cemented neoliberal austerity
Speaker: was the shift to a singular objective for the Bank of Canada's monetary policy and that was inflation fighting. The extent of the decline in the care sector in Canada is not just something that is happening everywhere in the world. Canada changed from being a country that spent more on the care economy relative to most wealthy countries to one that is significantly below average. According to the OECD, Canada is a laggard in providing public care
Speaker: and it has held this distinction for over 25 years. Canada spends less now than it did in the 1990s when they spent about 20 % on social programs, now about 18. And also we are about 2 % less than the average for the OECD countries.
Speaker: Even the United States spends more on social programs through governments than we do, and that's often hard for us to believe. By the way, although Canada is below average in government spending on social programs, it is above average in general government spending. The important point to make with regard to these comparisons is that Canada can afford to spend more on care.
Speaker: And if Canada became just average by having government spend 2 % more of the national income on social programs, it would mean $46 billion more a year for care. This would go a long way toward beginning the care recovery necessary to shore up the serious deficiencies in care in Canada. The point I'd like to examine is why governments continue to discount the economic significance of a formal paid economy.
Speaker: and what makes them return to similar economic policies that we had in the pre -pandemic period. Behind much of this is the way certain parts of the care sectors have been completely unseen, that is the care work in the household. Partly this has to do with the low value associated with female and care work generally.
Speaker: But we need to remember how significant the household sector was during the pandemic period. And governments specifically directed people back to their homes. That was where care would occur. And of course with the assumption that there were people in the household who can do this. Governments are largely returning to pre -pandemic economic approaches in the formal sector with the new fear buttons being pushed. These fear buttons are fear of inflation,
Speaker: low productivity and the specter of poor economic growth. In the past, it was debt and deficit that were the major issues the corporate sector used to discipline government spending on social services. At least in the initial stages of the post -pandemic period, this no longer takes center stage, although it certainly is waiting in the wings.
Speaker: This is mainly because the public spending necessary to deal with the pandemic crisis demonstrated that government spending and action in the name of protecting people can be tolerated and it can strengthen the economy. Now to ensure government focuses on productivity and growth, the groups that governments listen to most, that is major banks, credit rating agencies, and the popular financial press, make a point of showing that Canada is a laggard in productivity measures.
Speaker: something that will negatively affect economic growth. The Globe and Mail, for example, very recently had an article that was entitled, why Canada's economic growth is expected to be dead last among advanced countries. And they claim that Canada will struggle to increase real GDP per capita from now until 2050. It's a long time out.
Speaker: The main problem they identify relates to Canada having too long supported the wrong issues, mainly public programs and people after the pandemic. When market rating agencies call on government to improve productivity in order to spur economic growth, they want investment in tangible things, traditional infrastructure projects like highways and bridges, or in areas of innovation like high technology or on increasing exports.
Speaker: which in Canada primarily means exporting energy and things from the other resource sectors. My sense is that we really do need to pay attention to this argument about productivity and to counter it. And especially we need to challenge the notion that care services are unproductive. I want to talk now about how productivity is measured in care services. Productivity is usually measured in terms of
Speaker: gross domestic product of the national income per person employed or per hour worked. Labor productivity is related to the quantity and the quality of capital it uses and productivity improves when labor has more capital to work with and the examples we usually hear about this is
Speaker: certainly somebody using a backhoe is a lot more productive than someone who's using just the shovel. So as the argument goes, low labor productivity is result of low capital investment, which means that the obvious solution is to get capital to invest more. And then this in turn brings about public policy preferences for encouraging capital, such as through lower taxes and increased subsidies to specific corporate sectors. And that's all to stimulate investment.
Speaker: All of these preferred spending measures are at the expense of government spending on care. In fact, the care sector is perceived as a drag on the economy because it is seen as a sector with very low measured productivity. Low and declining rates of productivity are considered serious problems across rich countries, not just in Canada.
Speaker: But I think this is primarily because the nature of the economy has changed and how productivity is usually measured does not capture real productivity in an economy dominated by services. Economic activity today looks very different from what it did 100 years ago and traditional economic concepts and measurements simply are inadequate for recognizing this change. Labor now looks different and it's not mostly related to production of physical things like food
Speaker: manufactured items, resources, and physical infrastructure. These are sectors that count for about 20 % of the economy. The output of the service sector is such that productivity as originally measured does not work for the care sectors within services. When things are produced, measuring increases in the relationship between inputs and outputs is easy, but it does not translate well to care services, primarily because of the empirical problems of measuring
Speaker: services output. Economists have not progressed much more than counting how this is paid for for the care service, that is, the input is the output of the sector. So this is particularly problematic when considering government provided services such as health care and education.
Speaker: Where in most rich countries, except the United States, market prices for the services do not provide a good way to see if productivity is improving. The current practice is to make the output of the service equal to the total cost the government pays. With rising costs of care services and no or little corresponding improvement in productivity, the care sector is by this measure an unproductive sector. Spending in the care sector then is by definition a drag on the economy
Speaker: activities that lower GDP per hour worked. An economic approach that properly values the contribution of the public sector could reset ideas about the care economy and could use it as a main driver of economic health. Currently, some very good work shows that the care sector is not only a significant part of the economy, but investments in this sector can make the economy perform better.
Speaker: One UK study shows how investing in care has significantly superior employment effects to any recovery led by construction. It creates more jobs, reduces gender inequality, and improves condition of work. Another example relates to the Canadian federal government's action in creating a national universal childcare program.
Speaker: This move was much strengthened by the work of economists who verified the longstanding claims by childhood advocates that investment in this area would result in economic gains. The proof was the Quebec experience of many years of universal low fee childcare. Quebec childcare boosted the labor force participation of young women to the highest level in both Canada and the world.
Speaker: This in turn also led to increased tax and economic benefits that basically meant the system did not require more taxes to pay for childcare. This convinced policymakers that scaling it up nationally would not negatively affect government finances and would increase economic growth. Now these examples work because they deal directly with the labor impact of investment in the chair sector. Information that is readily available and more specific work can and should be done
Speaker: to expand these kinds of analyses in other areas. But other methods of calculation are necessary in other areas where the improvements are not directly quantifiable by increases in labor alone.
Speaker: or especially where improvements do not directly lead to monetary gains. The most obvious relates to significant productivity gains in healthcare, such as improvements in overall lifespan, declines in mortality rates for specific groups, and the general increases in quality of life over time. The increase in lifespan in Canada has been absolutely extraordinary with the average now 83 years. That's increased almost 15 years since 1950.
Speaker: The important point is that the economic data significantly understates the real output in the healthcare sector. Better outcomes could similarly be shown with improved attention in services and long -term care facilities, home care, and all levels of education. The problem with understanding productivity in the care sector is that GDP counting is extremely narrow and altogether it is significantly understated
Speaker: because of the lack of appropriate output measures. This has been something feminist economists have maintained for a very long time. I'd now like to talk about how the care economy is compatible with work needing to be done to deal with climate change. The economy could grow if the care sector were truly understood for its role in improving not only social welfare, but also economic productivity in relationship to economic growth.
Speaker: But it's particularly significant now that governments are beginning to grapple with climate change. And that is that the care sector is in areas whose expansion is much less damaging to the environment than the traditional areas were targeted for growth. With the main exception of the hospital sector, the care sector represents green jobs and contributes yes to greenhouse class emissions and jobs that are usually associated with typical infrastructure spending.
Speaker: This is not normally how the future of a green economy is understood by governments. For the most part, climate change is viewed as a technical problem to be solved and is usually interpreted to involve investing in technology
Speaker: to change fuel sources, provide policy designed to inhibit certain kinds of action that are carbon intensive, and sometimes mentioned is government's action to compensate workers who are displaced through this process. So that's pretty low on the list so far. The masculine nature of most climate change action is evidence in its main targets, which is in many sense understandable.
Speaker: considering the masculine nature of greenhouse emitting industries. By the way, a while ago, I undertook a study of greenhouse emissions by gender. It showed that male labor accounts for most emissions because of the industries where men work. We have a very gender divided labor force. Males account for 76 % of greenhouse gas emissions through work, transportation, and the household, while females account for 24%. The point is not to make males responsible for greenhouse gas emissions per se,
Speaker: but to understand and reinforce which sectors of the economy are the problem sectors and which are more benign. So far, cleaning up these dirty industries is a focus for public policy, but it's clear if there was lots less of this kind of work and lots more of the things that make life better, we will have a clearer, cleaner place to live and a better care of the economy. The economic solutions to global warming, most often advanced tend to be technical and consist primarily
Speaker: of the following kinds of things finding new clean energy sources through wind solar biomass nuclear and small hydro and making dirty fuels cleaner, such as the recent promotion and investment in.
Speaker: carbon capture utilization and storage and shifting transportation from one based on oil to one that is electricity based and also retrofits of buildings. These industry focused initiatives rely on big subsidies and market mechanisms to curtail emissions
Speaker: through carbon taxes. Some of these actions are a big important part of the solution as a step, but they are actions that are not sufficient and do not deal with beginning a major shift in the economy that could sustain the future. The main policy initiative now is to find adequate pricing of carbon so that the market sends signals to producers and consumers to change consumption and production decisions. The point for me is that this is really slow.
Speaker: an inadequate way to bring about change. In Canada, most governments now understand they need to take action to slow the progression of climate change. The problem is that the solutions most favored are at best what we might call a green nudge, small incremental changes that do not do what it needs to do to meet either people's real needs or reduce the negative effects on the environment. This is largely a result of how large corporations after initially stridently resisting
Speaker: any climate change action shifted their approach to actively position themselves as the primary agents for government policy considerations for action and support on climate change. The future could look different and could be one that envisions a stationary state in material productions, but expands care services to meet people's needs. The idea of a stationary state where material production does not expand
Speaker: but is better organized, more rational and distributed to meet people's needs has long been discussed, beginning with John Stuart Mill in the 19th century and is certainly much discussed today. Rethinking what is considered productive and where economic expansion can occur is possible.
Speaker: in our market -based system because what counts is whatever gets produced and sold. And there is no requirement that anything bought or sold has a physical form. Any kind of activity puts money into the economy and people to work, and it could function with any sectors, at least sectors. A different vision for an economy that focused on meeting rational needs of people would need a value system that understood the critical nature of the care economy to the successful functioning of the system.
Speaker: This requires shifting ideas about what constitutes productivity and economic growth from those that prioritize growth and material production to growth in care services. It requires a more equitable distribution system through taxation and the increased provision of services
Speaker: and it requires a shift from an economy dominated by government support for export -led growth. Material needs do need to be met, and the distribution of wealth within and among nations will certainly need to happen in order to arrive at a stationary material state. In the meantime, crucial shifts in government policy towards support for the care economy could increase economic activity without increasing greenhouse gas emissions.
Speaker: The pandemic taught big lessons the very hard way. These lessons were that government planning, especially long -term planning, is essential to ensure people receive the care they need. In addition to planning for care, this planning needs to include planning for labor needs. The pandemic also showed that privatizing the delivery of care results in inferior care, especially in health care, long -term care, and home care.
Speaker: The pandemic dramatized how the stagnation of federal and provincial initiatives in creating new programs undermines the wellbeing of the population and makes Canada a laggard in the provision of essential care services. And the pandemic made clear that people who traditionally perform low wage work are essential for the functioning of the care system and need better wages and working conditions.
Speaker: But most of all, the pandemic showed that leadership to deal with a crisis does work at both the provincial and the national levels. The need to control the pandemic generated a massive collective of focus that demanded leadership. It is an approach that needs to return and governing in Canada with regard to the care economy and the climate change. In ending today, I would like to stress the idea that the care economy and action on climate change are compatible
Speaker: And both are related to the ethics of care for people and for the planet. Most of us know that we have too many things, stuff that shifts around the world at a frenetic pace. We also are aware that care services are much in demand and that this demand is not being met. This is where the economy needs help from governments to see that this demand is realized. Thank you.
Speaker: We've been listening to the 2022 Gideon Rosenbluth Memorial Lecture given by Marjorie Griffin Cohen. Her talk was titled, Handled with Care, Growth Through the Care Economy Benefits People and the Climate. We'd like to thank the organizers, the Canadian Centre for Policy Alternatives BC office for making this talk available to us. The Red Eye podcast is produced at the studios of Vancouver Co -op Radio.
Speaker: you can support us by supporting Co -op Radio. Go to coopradio .org and click on the donate button. Independent media relies on the support of people like you.
