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How the caring economy can revive us – Corporate Knights Magazine

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Economic policy-making has, over the past hundred years or more, stripped out caring from our understanding of what makes the economy tick. Caring – for children, for elders, for the planet – sounds to many like a distraction from the main attraction, especially during the pandemic, when what we need are jobs and robust economic growth.

But as the COVID-19 pandemic brought the global economy to a grinding halt, locking down working parents and idling activity in many sectors, it became clear that if we don’t put caring back into the economy, we can’t achieve economic recovery. The pandemic has revealed economic fault lines that must be addressed. We can’t “get back to normal”; we need to create a better normal. And we certainly won’t be able to build back better without making the caring economy a critical component of federal recovery plans.

He-cessions and she-coveries

In past recessions, downturns would most deeply affect goods-producing industries, which have historically been dominated by men. Canadian economist Armine Yalnizyan named these “he-cessions” that were then followed by “she-coveries” as women increased their participation in paid work to support household incomes. This kind of “within-family insurance” meant women provided the stopgap in hard times.

The 2020 economic crisis has taken a different path. It’s become clear that the traditional “family insurance” model doesn’t work in a pandemic recession. Service sectors such as retail, personal services, childcare and hospitality were among the hardest hit – sectors staffed predominantly by women. In Canada, 56% of women workers are concentrated in these occupations, compared to 17% of men. This “she-cession” has meant that in March 2020, 63% of job losses fell to women, and as the economy reopens, women’s jobs are coming back at less than half the rate of men’s.

Those job losses have been exacerbated by closed schools and shuttered daycare centres. Because of gendered norms about who is responsible for children, many women have had to switch from full-time to part-time work or leave jobs entirely to care for or home-school children of all ages.

In August, UN chief António Guterres cautioned that the pandemic may undo three decades of progress toward gender equality in economic opportunity. “Without a [concerted] response,” he noted, “we risk losing a generation or more of gains.”

Writing caring out of the economy

Feminist economists have for years pointed out that production (in the market economy for goods and services) and reproduction (in starting and maintaining families) are intimately intertwined. Unpaid work caring for children, elders and households enables the economic activities that get counted by measurements such as gross domestic product (GDP). However, in traditional economic thought and practice, women’s work at home was seen as altruistic and having no “value” since it was not sold on the market the way male activities were. Though if we were to value women’s unpaid work at home, it would be something like US$10.8 trillion globally each year.

Separating care work done by women from the image of the economy has been so effective that today in implicit association tests – meant to measure our preconscious cognitive biases – more than 75% of people (of all genders) associate women with family and men with careers.

Even in Canada, which professes a commitment to gender equality, women still perform nearly two times more unpaid work for households than men. That gender gap has been exacerbated by the pandemic. Though many men took on more care work during the initial lockdowns, we are learning that – as the economy reopens – their contributions are returning to pre-COVID levels, but women’s remain elevated. (And, by the way, this analysis excludes non-binary and transgender people: another problematic aspect of traditional economic models is to reinforce the gender binary in our society.)

At the same time, women are putting their bodies on the line to make sure we get the food, medicine and care we need. Women – especially women of colour – make up the majority of workers in the nursing and personal-care sectors that have been essential for meeting the COVID-19 health crisis, as well as the majority of staff in grocery stores and other businesses deemed essential.

Further, a wave of bankruptcies has hit the childcare industry, with many daycare centres unable to weather the lockdowns or recoup the extra costs of social distancing, cleaning and disinfecting. Surviving centres will have reduced spots. These closures will have two impacts on women’s employment: since daycare centres employ predominantly women, there will be fewer jobs, and since there will be fewer spaces for children, more women will need to leave work to care for their own families. In the U.S., Bureau of Labor Statistics data show that in September alone, 865,000 women dropped out of the workforce – four times the number of men.

There will be no “she-covery” from this recession. Instead, building back will require aggressive investments in the care economy.

Investing in care pays dividends

Often in recessions, government spending has focused on major infrastructure projects to get the economy going again. After the Great Depression, Franklin D. Roosevelt’s New Deal saw the construction of dams, power stations, roads, bridges and power lines. The extraordinary success of that program has imprinted in our minds that investing in physical infrastructure is the way out. But in 2020, we need a different kind of infrastructure investment: investment in social infrastructure, primarily in the care economy.

In September’s throne speech, the Trudeau government said it recognized the urgency of the challenge, noting that “Canada cannot succeed if half of the population is held back.” The government pledged to make “a significant, long-term, sustained investment to create a Canada-wide early-learning and childcare system.” No specifics were shared, but if a federal investment is to be meaningful, it must bring public spending on childcare up to at least 1% of GDP, which is still below levels that countries like Sweden or France invest but substantially more than is invested today. It should also come with affordable prices for parents and a living wage and benefits for the workers.

One of the arguments against investing in childcare and eldercare is that it’s too expensive. But this frames the costs as an expense from today’s budget rather than an investment in tomorrow’s prosperity. The U.K. Women’s Budget Group recently analyzed the returns that come from investing 1% of GDP in childcare versus in construction (construction jobs being those typically targeted in infrastructure investing for economic recovery). They found that the childcare investment would create 2.7 times as many jobs as a similar investment in construction, more than a third of which would be in industries outside of childcare. That’s because the investment leads to direct employment in the sector as well as indirect employment in sectors that support childcare centres, including construction, in addition to jobs generated in the local economy as a result of employed workers buying more goods and services.

Of note is that the number of jobs created for men is almost the same whether you invest in childcare or construction, but the number of jobs created for women is almost four times higher in the childcare scenario (assuming the mix of women and men in the sectors doesn’t change).

Of course, investing in childcare is not just about creating jobs in the short-term but also about providing safe environments for effective early-childhood learning. All the evidence suggests that higher-quality learning in preschool leads to better learning throughout the school years, reduced needs for special education, fewer high school dropouts and juvenile arrests, and higher wealth and lower need for welfare assistance in adulthood.

All to say, spending on childcare is an investment in infrastructure, not a short-term expense: infrastructure because the benefits extend beyond direct uses to support the broader community and an investment because it creates benefits that extend well into the future, improving productivity and preventing greater need.

On top of that, research suggests that government investment in childcare pays for itself quickly. In Canada, the province of Quebec implemented a low-fee childcare program accessible to all residents. The investment led to a 1.8% increase in total employment (by creating jobs and also by freeing up women to work in paid employment). For every $100 spent by the government, the province experienced returns of $104 and the federal government, $143.

A caring economy is a green economy

Devaluing caring has also had devastating effects on the environment. Caring for our planet, much as caring for our children and elders, has been framed as an expense that we can’t afford when financial returns are at stake. Since caring has been relegated to the women’s realm, it makes sense that there is a gender gap in environmental views, with women being more concerned about climate change and other forms of environmental degradation.

It’s also true that climate change has a disproportionate impact on women around the world. Like COVID-19, climate change exacerbates existing social and economic inequalities. Climate shocks such as water shortages, heat waves and other extreme weather have increased the prevalence of gender-based violence. As families become more economically insecure, girls are also more likely to be pulled from school or forced to marry early. These impacts are taking place in the global South as well as in many marginalized communities in developing countries.

But many of the proposed green recovery plans still put construction work (such as installing solar panels or wind turbines) at the forefront. These initiatives are most assuredly needed, but it’s important to keep in mind that jobs in eldercare or childcare centres are some of the greenest out there. Care economy jobs – be they in healthcare, childcare, teaching or social services – are inherently low-carbon.

Just as with care work at home, caring for the planet has been framed as in conflict with “real” economic value as measured by our GDP. Ultimately, creating a caring economy redirects our attention, instead, to the value that comes from assuring equal opportunities for people of all genders, drinking clean water, providing good jobs with livable wages, avoiding devastating wildfires, investing in our children’s development, breathing clean air and saving our homes from flooding.

What is now clear is that a thriving economic recovery can be achieved only with a caring economy at its core.

Sarah Kaplan is distinguished professor and director of the Institute for Gender and the Economy at the University of Toronto’s Rotman School of Management. She is the author of The 360º Corporation: From Stakeholder Trade-offs to Transformation.

How to pay for the caring economy 

By CK STAFF 

In 2017, the International Monetary Fund estimated that Canada’s labour force could grow by more than half a million – boosting GDP by 4% in the medium-term – if women matched men in workforce participation, and much of that participation gap could be reduced through better childcare options. 

A national childcare program built on lessons from Quebec would require additional federal investment of $80 billion over the next 10 years, representing 0.35% of GDP (assuming 50-50 cost-sharing with provinces and territories) annually. The cost would be offset by economic growth (2.4% higher in the medium-term) created by reducing the gender gap in workforce participation. Federal revenues would increase by 0.36% of GDP (using the 15% federal revenue ratio to GDP), if we base figures on an IMF study extrapolating from the Quebec experience.

Securing dignified eldercare as an element of universal healthcare almost certainly requires a national long-term-care insurance program, with a strong community-based and homecare component, according to the National Institute on Ageing. Setting this up will likely require federal contributions in the order of an additional quarter of 1% of GDP, assuming a matching contribution from provinces and territories. This kind of money would help bring the provinces to the table to hammer out a long-term-care insurance program that could fit within the CPP/CDPQ structures. Together, this would raise Canada’s spending on publicly funded long-term care from 1.3% of GDP to 1.8%, in line with our OECD peers, which would improve and extend eldercare while taking some of the load off the 35% of Canadians who balance paid work with unpaid caregiving.

The federal contribution would be offset by higher levels of GDP (1% in the medium-term) and a reduction in health transfers based on cost savings (0.12% of GDP) resulting from hospital beds being freed up through increased long-term-care spaces and in-home-care support services, which tend to be 80% more cost-effective.

If we dovetail investments in the caring economy with an annual 1% of GDP federal investment into clean-growth areas that align with Canada’s assets, this country could have a thriving economic recovery that readies us for a resilient low-carbon future. This could be financed by low-cost, long-dated sovereign bonds (issued now and put into earmarked accounts to lock in low interest rates), similar to what the EU is doing to pay for its economic recovery plans. Corporate Knights economists estimate this green-recovery investment would raise Canada’s 2030 GDP levels between 5 and 10%. At the mid-range, doing so would increase federal tax revenues by 1.1% of GDP, enabling us to manage our sovereign debt loads and sustain a clean and caring economy over the coming decades. Investing in a caring and green recovery will expand, mobilize and redeploy Canada’s productive capacity, enabling us to pay off the sovereign debt and sustain a clean and caring economy over the coming decades.

Building Back Better with a Clean and Caring Economy (2021–2030 annualized)
ProgramFederal Government Cost (% GDP)GDP Boost %Federal Government Revenue Boost %/GDP (5)Fiscally Sustainable
Childcare0.35%2.4%0.36%
Eldercare 0.25%1%0.15%
Hospital Beds  -0.12%*
Clean Economy 1.0%7%1.1%

Sources: Corporate Knights estimate based on Building Back Better Synthesis Report, Canadian Institute for Health Information, Caregiving and Care Receiving by Statistics Canada, Conference Board, Finance Canada, IMF, National Institute on Ageing, RBC Economics, Scotiabank Economics

*Reduction in hospital beds used by elders who are better served in nursing homes or home care will enable trimming of future health transfers. 

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Mexico Economy Grows at Record Pace With Long Recovery Ahead – Yahoo Canada Finance

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Chicco Black Friday & Cyber Monday Deals (2020): Best Nextfit Car Seat, Bravo Travel System & More Deals Reviewed by Saver Trends

Review of the latest Chicco deals for Black Friday & Cyber Monday, featuring offers on Keyfit 30 car seat, Bravo Travel System & more Here’s a comparison of the latest Chicco deals for Black Friday & Cyber Monday, including the best sales on convertible car seats, car seat and bases and more. Links to the top deals are listed below.Best Chicco Deals: * Save up to 43% on Chicco travel systems, carriers, sterilizers, and more at Walmart – see the latest discounts on a wide variety of Chicco infant car seats, strollers, food warmers, and modular sterilizers   * Save on Chicco travel systems, portable bassinets, hook-on chairs, and more at Amazon  – click the link to see live prices on top-rated baby safety car seats, travel gear, and more * Save on top-rated Chicco baby safety car seats, travel systems at buybuyBABY.com – check live prices on Chicco KeyFit 30 Infant Car Seat, Chicco Fit 4-in-1 Convertible Car Seat, and more      * Save up to 32% on top-rated Chicco travel systems at Walmart – check the latest deals on travel system models, including Chicco Mini Bravo, Chicco Activ3 Jogging, Chicco Bravo Trio, and more    * Save on best-selling Chicco KeyFit series car seats at Walmart – click the link for the latest deals on Chicco KeyFit series car seats, including the Onyx, Regatta, Q Collection, and more    * Save up to $90 on car seats from the Chicco NextFit series at Walmart – check the latest savings on top-rated Chicco NextFit convertible car seats    Best Baby Deals: * Save up to 40% off on a wide selection of baby gear at Walmart – find the latest deals on car seats, strollers, bassinets, activity centers, bouncers & rockers, carriers, playmats, and more   * Save up to 40% on Graco baby strollers, car seats & more baby gear at GracoBaby.com – click the link to see updated prices on best Pack ‘n Play® playards and other top-rated Graco cribs, strollers, and car seats * Save up to 49% on baby gear including car seats, strollers, clothing & essentials at Amazon – check live prices on clothing, bedding, baby care items and accessories   * Save up to $105 on baby strollers, car seats, cribs & more at buybuyBABY.com – including deals on Fisher Price, Carter’s and Disney    * Save on a wide range of Burt’s Bees baby items at BurtsBees.com – click the link for latest deals on baby ointment, lotion, creams, and bath bundles from Burt’s Bees    * Shop baby swings, bassinets, playards & more at 4moms.com – click the link to see the latest prices on baby stuff like the mamaRoo4, rockaRoo, mamaRoo sleep bassinet, and more   Searching for more deals? We recommend checking Walmart’s Black Friday & Cyber Monday sale and Amazon’s Black Friday & Cyber Monday deals for thousands more live discounts. Saver Trends earns commissions from purchases made using the links provided.About Saver Trends: Saver Trends research and share online sales news. As an Amazon Associate and affiliate Saver Trends earns from qualifying purchases.Contact: Andy Mathews (andy@nicelynetwork.com)

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Iran economy could rebound to 4.4% growth if U.S. sanctions lifted: IIF – TheChronicleHerald.ca

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By Davide Barbuscia

DUBAI (Reuters) – Iran’s economy could grow 4.4% next year if U.S. President-elect Joe Biden lifts sanctions that have contributed to a deep three-year recession, although the COVID-19 crisis could limit foreign investment, the Institute of International Finance (IIF) said.

Biden’s victory in the Nov. 3 U.S. election has raised chances that the United States could rejoin a deal Iran reached with world powers in 2015, under which sanctions were lifted in return for curbs on Iran’s nuclear programme.

This is unlikely to happen overnight, however, and the prospects remain uncertain as the adversaries would both want additional commitments.

Iran’s rial currency has lost about 50% of its value against the U.S. dollar in 2020, reflecting economic damage from sanctions and the coronavirus pandemic, although it strengthened in late October in anticipation Biden would unseat U.S. President Donald Trump.

Iran has the highest COVID-19 death toll in the Middle East.

Trump abandoned the nuclear deal in 2018, and Tehran responded by scaling down its compliance.

The IIF, a trade body for the global financial industry, said that if United States lifted most of the economic sanctions on Iran by the end of 2021, the economy could expand 4.4% next year after an expected 6.1% contraction in 2020.

It would then grow by 6.9% in 2022 and 6% in 2023, the IIF said, adding that if oil exports increase, Iran could see its foreign reserves rise to $109.4 billion by the end of 2023.

Tehran has spoken optimistically about the return of foreign companies under a new U.S. administration, but lack of financial transparency could still curb interest from firms who had made tentative moves to invest after the 2015 deal was struck.

Garbis Iradian, IIF’s chief economist for the MENA region, told Reuters foreign direct investment inflows would increase progressively from this year’s $890 million to over $6.4 billion in 2025.

Assuming most sanctions could be lifted by late next year, FDI is likely to remain below $2 billion in 2021, with most of the money coming from China, Iradian said, adding: “Moreover, the coronavirus pandemic will limit FDI inflows in 2021.”

The Iranian economy would remain fragile, though “not to the brink of collapse” if most of the sanctions remain in place, the IIF said.

Under such a “pessimistic” scenario, Iran would post 1.8% growth next year and its foreign reserves would steadily decrease from about $80 billion this year to $46.9 billion by the end of 2023.

About 90% of Iran’s official reserves are frozen abroad due to U.S. sanctions.

(Reporting by Davide Barbuscia; Editing by Catherine Evans)

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Picture of US economy is worrisome as virus inflicts damage – Investment Executive

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The number of Americans seeking unemployment aid rose last week for a second straight week to 778,000, evidence that many employers are still slashing jobs more than eight months after the virus hit. Before the pandemic, weekly jobless claims typically amounted to only about 225,000. Layoffs are still historically high, with many businesses unable to fully reopen and some, especially restaurants and bars, facing tightened restrictions.

Consumers increased their spending last month by just 0.5%, the weakest rise since the pandemic erupted. The tepid figure suggested that on the eve of the crucial holiday shopping season, Americans remain anxious with the virus spreading and Congress failing to enact any further aid for struggling individuals, businesses, cities and states. At the same time, the government said Wednesday that income, which provides the fuel for consumer spending, fell 0.7% in October.

The spike in virus cases is heightening pressure on companies and individuals, with fear growing that the economy could suffer a “double-dip” recession as states and cities reimpose curbs on businesses. The economy, as measured by the gross domestic product, is expected to eke out a modest gain this quarter before weakening — and perhaps shrinking — early next year. Mark Zandi, chief economist at Moody’s Analytics, predicts annual GDP growth of around 2% in the October-December quarter, with the possibility of GDP turning negative in the first quarter of 2021.

Economists at JPMorgan Chase have slashed their forecast for the first quarter to a negative 1% annual GDP rate.

“This winter will be grim,” they wrote in a research note.

Zandi warned that until Congress agrees on a new stimulus plan to replace a now-expired multi-trillion-dollar aid package enacted in the spring, the threat to the economy will grow.

“The economy is going to be very uncomfortable between now and when we get the next fiscal rescue package,” Zandi said. “If lawmakers can’t get it together, it will be very difficult for the economy to avoid going back into a recession.”

Some corners of the economy still show strength, or at least resilience. Manufacturing is one. The government said Wednesday that orders for durable goods rose 1.3% in October, a sign that purchases of goods remain solid even while the economy’s much larger service sector — everything from restaurants, hotels and airlines to gyms, hair salons and entertainment venues — is still struggling. But economists caution that factories, too, remain at risk from the surge in coronavirus cases, which could throttle demand in coming months.

And sales of new homes remained steady in October, the latest sign that ultra-low mortgage rates and a paucity of properties for sale have spurred demand and made the housing market a rare economic bright spot.

But at the heart of the economy are the job market and consumer spending, which remain especially vulnerable to the spike in virus cases. Most economists say the distribution of an effective vaccine would likely reinvigorate growth next year. Yet they warn that any sustained recovery will also hinge on whether Congress can agree soon on a sizable aid package to carry the economy through what could be a bleak winter.

“With infections continuing to rise at an elevated pace and curbs on business operations widening, layoffs are likely to pick up over coming weeks,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

The government said he total number of people who are continuing to receive traditional state unemployment benefits dropped to 6.1 million from 6.4 million the previous week. That figure has been declining for months. It shows that more Americans are finding jobs and no longer receiving unemployment aid. But it also indicates that many jobless people have used up their state unemployment aid — which typically expires after six months.

More Americans are collecting benefits under programs that were set up to cushion the economic pain from the pandemic. For the week of Nov. 7, the number of people collecting benefits under the Pandemic Unemployment Assistance program — which offers coverage to gig workers and others who don’t qualify for traditional aid — rose by 466,000 to 9.1 million.

And the number of people receiving aid under the Pandemic Emergency Unemployment Compensation program — which offers 13 weeks of federal benefits to those who have exhausted state jobless aid — rose by 132,000 to 4.5 million.

The data firm Womply says that 21% of small businesses were shuttered at the start of this month, reflecting a steady increase from June’s 16% rate. Consumer spending at local businesses is down 27% this month from a year ago, marking a deterioration from a 20% year-over-year drop in October, Womply found.

The heart of the problem is an untamed virus: the number of confirmed infections in the United States has shot up to more than 170,000 a day, from fewer than 35,000 in early September. The arrival of cold weather in much of the country could further worsen the health crisis.

Meanwhile, another economic threat looms: the impending expiration of the two supplemental federal unemployment programs the day after Christmas could end benefits completely for 9.1 million jobless people. Congress has failed for months to agree on any new stimulus aid for jobless individuals and struggling businesses after the expiration of a multi-trillion dollar rescue package it enacted in March.

The expiration of benefits will make it harder for the unemployed to make rent payments, afford food or keep up with utility bills. Most economists agree that because unemployed people tend to quickly spend their benefits, such aid is effective in boosting the economy.

When the viral outbreak struck in early spring, employers slashed 22 million jobs in March and April, sending the unemployment rate rocketing to 14.7%, the highest rate since the Great Depression. Since then, the economy has regained more than 12 million jobs. Yet the nation still has about 10 million fewer jobs than it did before the pandemic erupted.

All of which has left many Americans anxious and uncertain. The Conference Board, a business research group, reported Tuesday that consumer confidence weakened in November, pulled down by lowered expectations for the next six months.

And the University of Michigan’s Surveys of Consumers reported Wednesday that sentiment declined slightly this month, and remained far below where it was before the pandemic struck. With the resurgence of the virus depressing the outlook of consumers, the sentiment index fell to its lowest point since August.

“Gloomier consumer expectations will weigh on spending as the holidays approach,” cautioned Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.

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