Category Archives: Income Inequality

Democracy is dying. Time to get to work.

I came across an article by George Monbiot (www.monbiot.com) that appeared in the Guardian this July. In this article, Monbiot writes about James McGill Buchanan, an economist influenced by neoliberalism and deeply funded by billionaire Charles Koch, the 7th wealthiest person in the world.

According to Monbiot, Buchanan was an advocate for what he called the public choice theory. The general gist is that “society could not be considered free unless every citizen has the right to veto its decisions. What he meant by this was that no one should be taxed against their will. But the rich were being exploited by people who use their votes to demand money that others have earned, through involuntary taxes to support public spending and welfare. Allowing workers to form trade unions and imposing graduated income taxes are forms of “differential or discriminatory legislation” against the owners of capital.

“Any clash between what he called ‘freedom’ (allowing the rich to do as they wished) and democracy should be resolved in favour of freedom. In his book The Limits of Liberty, he noted that “despotism may be the only organisational alternative to the political structure that we observe.” Despotism in defence of freedom.

His prescription was what he called a “constitutional revolution: creating irrevocable restraints to limit democratic choice. Sponsored throughout his working life by wealthy foundations, billionaires and corporations, he develop both a theoretical account of what this constitutional revolution would look like and a strategy for implementing it” (Source).

Buchanan’s influence extends beyond the United States. In 1980, he assisted the Pinochet dictatorship to write a new constitution. “Amid the torture and killings, he advised the government to extend its programmes of privatisation, austerity, monetary restraint, deregulation and the destruction of trade unions: a package that helped trigger economic collapse in 1982” (Source).

GIFSec.comNevertheless, believe it or not, in 1986 Buchanan was awarded the Nobel Memorial Prize for economics. This was the man who was against desegregating schools in the American South. He advocated for the privatization of just about everything: universities (at which all students would be required to pay full tuition). He was a proponent of privatized health care which is so costly what is spent in the United States by governments to mitigate its impact on those who can’t pay exceeds the costs of universal health care in Canada. He also thought it would be a good idea to privatize Social Security. Ask yourself when privatization materially improved the lives of everyday people.
According to Monbiot, Buchanan set out to “demolish trust in public institutions. He aimed, in short, to save capitalism from democracy” (Source).

While you may not have heard of Buchanan, his economic theories and political ideology appear to have served as the backbone for how things work in America.
One has to wonder if his form of “radical capitalism” influenced the financial crisis in 2007, when millions lost their homes due to banking and loaning practices that were driven by greed by those with money in pursuit of more. Remarkably, despite legal activity up the yin-yang, those who caused the disaster were bailed out, made sure they got big bonuses, and no one went to jail. Those who lost their homes received no help to speak of.

the_rich_fewAs income inequality prospers in the United States (and to a lessor extent in Canada), we see the Trump administration making decisions that benefit the super wealthy and punish those struggling to survive. His new health care act will kill people, harm those who are just surviving, and create more profits for mega-health providers. He is a savvy businessman if nothing else. He knows that a single payer system would work better and cost less. By the way, despite their advertisements to the contrary, these health care corporations hire people who can earn bonuses by denying claims (based on an interview I did with a claims officer at one of the largest health providers in the US.).

It all comes down to money. Not humanity. Not any smidgen of moral obligation to the marginalized. No one would vote to give up more of what little they have in order to increase profits for the wealthy – well, at least not knowingly. Oddly enough the poorest of the poor tend to vote Republican. This has been true for year and years, and yet they are no better off for their loyalty to the party.

There is a distasteful mythology that has been nurtured by those who are not poor about those who are. The poor are lazy, defective. They don’t have a work ethic. They prefer to lay about and live off of others. Given the obsession that successful people often have about their own success as a model for others, it makes sense, twisted sense I grant you, that one who purports the bootstrap theory of success would in turn rile against the unsuccessful as deserving of their failures. Blaming the poor by defining them as lesser beings than those who have money is a major reason why poverty continues to exist.

rich-vs-poor

Monbiot concludes his article this way: “In one respect, Buchanan was right: there is an inherent conflict between what he called ‘economic freedom’ and political liberty. Complete freedom for billionaires means poverty, insecurity, pollution and collapsing public services for everyone else. Because we will not vote for this, it can be delivered only through deception and authoritarian control. The choice we face is between unfettered capitalism and democracy. You cannot have both” (Source).

President Franklin Roosevelt once warned Congress: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.”

Look at what is happening in the United States. Fascism is something we think is done over there, across the water, by despicable people. Now, it’s emerging at a rapid rate just south of our border. It’s frightening, isn’t it? A president who holds himself above the law, who threatens to fire people if they don’t toe the line, who utters outlandish diatribes at anyone who would hint at opposing him. He won’t be transparent about his taxes. He makes decisions that are rooted in his own passion for self-benefit. Although I have to doubt President Trump ever read a word of Buchanan’s, he appears to be an ardent advocate for the super-rich, while unable to hide his distaste for the poor.

capitalismquoteWe can see this thinking and the divisiveness it perpetuates elsewhere of course. Even here in Canada, where we see the emergence of a far right political party in Alberta. Its leader, Jason Kenney, a student of Ralph Klein, who believe some pretty scary stuff, such as (Source).

“We shouldn’t indoctrinate students into the most extreme view about [climate change], I don’t think we should be teaching in our schools that whatever David Suzuki says is gospel truth.”

“Carbon dioxide is no biggie because trees like CO2.”

“I think it’s the first generation [Millennials] to come through a schooling system where many of them have been hard-wired with collectivist ideas, with watching Michael Moore documentaries, with identity politics from their primary and secondary schools to universities. That’s kind of a cultural challenge for any conservative party, any party of the centre-right, and we’ve got to figure out how to break that nut.”

He is anti-choice, against gay marriage, does not support assisting the severely ill with ending their lives. And he believes that the supremacy of God trumps the authority of Parliament. I assume he means the right and true Christian God. All the others no doubt do not matter.

When Trump ran for president, I still had my head in the sand. I thought no way he will become president — and voila. I have urges to discount Kenney as a quack that no sane Albertan would vote for, but I know those urges are wrong. Acting like an ostrich will not protect ourselves from the dangers in the wild.

We are on a journey, have been for a long time, to a time when life is ruled by dark money by old, wealthy men in closed-door meetings.

I have often wondered if despicable people have a good side. Did Hitler open doors for elderly women? Did Pinochet ever say a kind word to a homeless person on the street? Did George Bush Sr. ever regret introducing HMOs into the US healthcare arena? Does Trump ever for a moment stop to truly think about how many people will die because of his ego and shabby, hurtful design of a new health care system?

I don’t really know the answer to such questions, though I have my suspicions. But I do know that it will take courageous political leaders to turn our journey into a better direction. I wonder who will do that, who will turn away from corporate donations that come with clear expectations, if not demands?

Who will rise up to claim democracy once again as the way we should and must live, where people are equal under the law, have human rights that are enforced, and where governments make decisions that benefit the majority, if not everyone.

If you think improving socio-economic conditions requires systems change, this is what we are facing: A Noble prize winner, funded by billionaires, who has set a course  for a place where the rights of the few trump the rights of the many. Ironic that the US president is named, “Trump.”

Who will lead a new journey? We know who won’t. But we can’t do it without leadership at all levels of government.

Thanks to Monbiot and others like him, we can see the twisted agenda of the super powerful and wealthy.

In the context of Collective Impact, which is a practice area for me, we do not just need to agree on what the problems are. We need to understand that the old maxim, “Know thy enemy” rings true here as well.

Time to get to work.

 

Further reading:

James M. Buchanan,The Calculus of Consent: Logical Foundations of Constitutional Democracy[1962]

Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America By Nancy MacLean

Missing Link, George Monbiot

Working yet Homeless in Banff, Alberta

Banff, Alberta. Located in one of the most beautiful areas in Canada. People come from all over the world by the bus loads. There is money being made for sure. Nothing wrong with making money, right?

The hotel industry does alright. I perused hotels there via Expedia and most of the rooms available were $400 to $500 per night. Then there’s all the restaurants and bars, the tourist shops, art galleries, the rafting experiences, horseback riding, and on and on.

Life is good in Banff. Good for business people. Good for visitors who can afford to be there. But what about the workers at the clothing stores, or at the restaurants, or the ones who clean the rooms at the $500 per night hotel?

Josh, 22, homeless worker in Banff, Alberta. Photo credit: Falice Chin/CB

Josh Smith moved to Banff a month or so ago because of the abundance of work there. He moved all the way from the east coast. He landed a job right away as a clerk at a retail outlet, making $15.00 per hour.

Let’s make sure that sinks in. A young man wanted to go to work so badly he travelled across the country to land a low wage, retail clerk’s position. Industrious. Committed. The kind of young man I would hire.

One problem, though: Josh is homeless.

Banff has a zero-per-cent vacancy rate. Josh has done some couch surfing but doesn’t stay long out of courtesy to his friends. He just can’t find a place he can afford. According a CBC report (sources below), he is willing to pay up to $800 per month, but there is nothing at that rate that is decent.

“Some people want $1,000 to share a room with. That’s going to be drinking all night, partying — because it is a party town. If I’m going to work 10,12 hours every day, I don’t want to come home to a roommate in the room who is just drinking.”

So, a young man willing to work long hours for what clearly is not a living wage in Banff, Alberta is left to camp out illegally or spend the night tippling coffee at the all night McDonald’s (when does he sleep?).

Josh is not alone. In July of 2016, officials with Banff National Park reported knowing of 230 illegal campsites in the area, more in those seven months than the entire year of 2015. It’s risky camping out like that because there are wild animals in the forests and hills. Park officials also noted the risk of having to pay up to $5,000 in fines for being homeless in the national park.

Josh has to use public washrooms to attend to his basic needs. According to him, it’s a common thing to see at public washrooms. “I bet money someone is washing their hair, guaranteed,” he says. “Every time I go, there’s a buddy brushing his teeth or washing his hair. Or he’s got the wet paper towel and he’s wiping down his body. It’s like, yeah, everyone is in the same boat as me.”

There is something wrong when workers, who are essential to the economy in Banff, can’t find affordable housing and in order to maintain their low paying jobs have to resort to what amounts to illegal behaviour.

Creating more affordable housing in Banff is a challenge beyond what most communities face. Because it is located in the National Park, all land is owned by the Federal Government. The municipality is subject to the National Parks Act. In other words, developers (whether for-profit or non-profit) can’t develop as easily as they might in other cities and towns where they can actually purchase land.

City council is trying to address this issue. They are dealing with illegal Airbnb listings, as it is illegal in Banff to rent out residential homes for commercial reasons, without a permit. I found that interesting. The potential of earning revenues through Airbnb likely surpasses what can be made renting out a room; so this just adds to the affordable housing crunch. People can make more money off of tourists than the workers who support their economy.

As well, town Counselor Grant Canning reported that 130 affordable housing units will be built in 2018. Given the number of illegal campsites and the unknown number of workers living in garages, at illegal camps, or couch surfing, who knows what kind of dent that development will make in the overall housing problem. Nevertheless, it’s progress.

This is an example of a social problem (homelessness) being a structural problem, not one to be blamed on Josh and others like him. It’s complicated for sure. It’s about how the economy is structured, people’s incessant drive to make more money, and the laws and regulations that have helped to create and exacerbate the homeless problem in Banff. It’s also likely another example of income inequality, where those making money are primed to make even more, while the Josh’s of the world make low wages and live illegally in one of the most beautiful places on the continent.

Is Josh discouraged? No doubt, he has his moments. Despite the unfairness of his situation, he remains committed to staying in Banff.

“I know with enough determination I can make it out here,” he says. “I want to be better off when I go back than I was when I came out.”

Going back east is not an option for him. That suggests life back home is even worse than in Banff for this hardworking, homeless young man. That’s likely another story and one I bet you is rooted in structural causes of poverty, unemployment, and lack of housing.

Sources

http://www.cbc.ca/news/canada/calgary/homeless-resort-town-banff-housing-crunch-workers-1.4216765

http://www.cbc.ca/news/canada/calgary/banff-illegal-camping-affordable-housing-2016-1.3700223

Ending Precarious Employment – A Game-Changer Strategy

Precarious Employment is the jargon people like me use to describe the employment conditions and experiences of a growing number of workers in our country. Here is what that jargon means:

Precarious employment is in effect sub-standard employment that offers low wages that typically are not enough to live on, and that does not offer basic benefits like sick leave, vacation leave, or even unpaid bereavement leave. Health and dental benefits are too often absent as a benefit to low-wage workers.

In Ontario, according to the Wellesley Institute, one in three workers do not have health and dental benefits. And the lower your income the more likely you will not have these benefits. In fact, the Institute reports that only one in five persons making $10,000 or less receive health and dental benefits from their employer. As well, the Institute reports that it is not until workers are earning $60,000 per  year that the majority have employer provided health and dental benefits (90%). See this link from Benefits Canada’s website.

Such employment also lacks in any form of job security. Workers can be sent home on a slow day, laid off for seasonal reasons, or simply let go if they are seen to be a “problem.” By “problem” I mean when a worker has to stay home to take care of her child in a work environment where such leave is not allowed. It might be allowed on the books (unpaid sick leave) but not so in practice. Precarious employment can also include work situations where worker safety is ignored, side-stepped, and seen as an unnecessary drain on revenues.

Most employers are likely decent employers, but precarious employment is not rare. Living Wage Canada reports that one-quarter of workers are low-income, the highest rate in the world. Precarious employment is estimated to affect 50% of Ontario workers, according to the Fight for 15 and Fairness collaboration.

A livable income is a game-changer for people. Sufficient income means better access to health services, to good food, to accessing services for our children, for planning for the future, and participating in the economy. A good job offering sufficient income reduces mental health problems, helps reduce stress in family relationships and can avoid the embarrassment, not to mention lack of opportunity, that children face at school when their parents cannot afford the extra fees required for participation in a sport or other school activity. People who earn a livable income can turn their attention from survival to contributing to their community and the lives of those they love and care about.

Imagine if there were more groups, more community leaders, more businesses, more citizens focused on stopping precarious employment and increasing the number of jobs that compensate people fairly.

Systems would change, new and effective policies would surface, employers would treat workers with dignity and people’s human rights would be met.

For more information:

Fight for $15 and Fairness (Ontario)
Fight for $15 (British Columbia)
Fight for $15 (Nova Scotia)
Fight for $15 (United States)

 

Precarious Work

When an employer won’t allow a worker more than 25 hours a week but requires that worker to be available for work 7 days a week, people become little more than commodities on the open market of Precarious Employment.

Lately I have made an effort to talk with folks that work at places like Shopper’s Drug Mart, Home Depot, and Save-on Foods and none of the workers I have talked to get an eight hour shift. My partner’s son just landed a job at 30 hours per week, no benefits of any kind.

Efforts like the Living Wage movement are gaining traction but large corporations seem slower on the uptake than do small business owners. When will the incessant desire to keep wages low by major businesses end up hurting the economy on which these low wage employers depend? There is a tipping point somewhere down the road – for everyone.

The Living Wage movement is a welcome Pan-Canadian effort to ensure that people have a “livable” income. We also need to collectively address the commodification of human beings who are put to work without any consideration for what happens when a worker or her child is sick, for the need to have a day off to rest and revitalize, not to mention deal with life’s practicalities.

Imagine being fired for being sick and missing a couple of days of work. Imagine working for $12.00 per hour in unsafe conditions and suffering from a workplace injury that could have been avoided. Imagine no health and dental care, no vacation time, nada.

Imagine being a part-time worker and not being able to seek other part-time work because your employer wants access to your entire work week to schedule you.

For too many Canadian workers there is no need to imagine. This is their reality.

In Ontario, there is a movement to get the minimum wage to $15 per hour and to bring in legislation and regulations that would address the unsavory trend of precarious work. Led by Fight for 15 and Fairness, the good folks there launched A Better Way Alliance and features videos of business leaders who also believe in the importance of decent work. Click here watch the videos.

Take a look at some great employers who do care and who do value their employers. They tend to be small employers and I have to wonder if they can treat their employees like human beings that matter, why can’t large businesses?

better alliance

Signals of Coming Disruption

Big change doesn’t just click on. It occurs over time, starting out often as weak signals of the change to come. Sometimes it’s like the old frog in the boiling water story. Put the frog in when the water is cool and turn up the flame and eventually the frog realizes its plight, just too late to adjust, to escape.

For years, donor giving has been changing. Charities have become increasingly dependent on larger gifts from fewer donors. As the economy has served to increase the income and wealth gap between the small numbers of wealthy and the rest of everyone else, we have seen food bank use escalate and a growing number of workers living pay check to pay check. Job security is no longer a reasonable expectation for a growing number of people, much less the chance for advancement. Employee supported pensions are no longer the norm and health and dental benefits are harder to come by for low income workers and many who do not yet qualify as “low income” workforce members.

imagenoise_signalmlab2The adaptations charities have taken have been focused on how to grow revenues through different sources of revenues. Funders are looking at alternatives too, given their inability to fund all the good things that come their way. Crowdfunding, social enterprise, impact investing, social purpose businesses are among the more recent options in financing social good.

GDP growth has been slowing, 80% of Canadian incomes are not increasing or if they are, at far less a rate, the restructuring of the job market is creating more insecure and benefit-less employment. the ratio of workers to seniors is dramatically decreasing. Key drivers like oil prices are in turmoil. Consumer debt keeps increasing. The numbers of people making $15 or less are growing as businesses work harder to cut back on expenses in order to feed more profits to investors. Continue reading Signals of Coming Disruption