In response to an unprecedented crisis, governments around the world are doing unprecedented things. Student loans, mortgages, and utility payments have been suspended in Canada, Italy, and France respectively; Spain has gone further and nationalized all its hospitals in one fell swoop.
Even the United States, where the entire political spectrum skews to the right, is moving toward basic income, paid sick leave, and perhaps even socializing components of its private health insurance system.
It seems that calls to do the right thing—house the homeless, free prisoners, lift sanctions, tax the rich, and bail out workers—are finally being taken seriously and “the economy” finally being redirected in favor of everyday people.
These emergency measures are well and good, but nowhere near enough. The current economic system remains set up to reward delay and dithering. Across the world, we have seen quarantine and social distancing measures being implemented too late because governments and analysts have been busy calculating if prevention is economically “worth it.” This calculation has become explicit as the US government begins to weigh how many human lives it is OK to sacrifice for the stock market and especially “the economy.”
As we prepare for the coming decades of crisis, what more could we do if we organized our lives around collective social well-being rather than around “the economy”? Can we permanently quarantine “the economy” precisely in order to save ourselves?
“The economy” and whether it’s healthy has too often been the central question of the Covid-19 saga. This is because metrics like the Dow Jones Industrial Average and quarterly GDP estimates, used to assess the health of the “economy,” are routinely taken as a proxy for overall societal well-being. But “the economy” doesn’t really reflect all citizens’ lives. Even when a stock market crash accompanies a real livelihood crunch, the two things are often separate problems, and more often the relationship between the stock market and everyday people’s well-being is an inverse one.
The Dow and NASDAQ usually rise when wages fall, a fact we forget when we talk of a shared “economy” where workers and CEOs are all in it together.
“The economy” might seem like a fact of nature, but it is actually a very new way of thinking about production and distribution. If you said “the economy” before the 1930s, nobody would know what you meant. Back then, economists only ever discussed specific things like individual commodity markets (wheat, cotton), business cycles, or the industriousness of specific populations without thinking of all these things as forming a single totality called “the economy.” But as the Great Depression, World War II, decolonization, and the fall of the gold standard rattled the existing global order, a new way of measuring commercial success had to be found, one that could both be limited to the boundaries of discrete nation-states and yet “grow” without acquiring new territories or markets, simply by the faster circulation of goods and services.
This new concept was “the economy,” which quickly became governments’ main responsibility to manage and increasingly a way to measure a country’s and its people’s well-being by proxy of money changing hands.
We already know what’s wrong with measuring well-being this way. Metrics like GDP indiscriminately reward activity even if it’s bad, e.g., an oil spill or a war. Like the Dow, economic growth isn’t a good measure of everyday people’s well-being. For instance, since 1980 the GDP has grown thanks to financial sector profits, not shrunk because of most Americans’ stagnating wages.
But the “economy” concept does even more mischief. First, it leads us to assume that disparate things—like workers’ well-being and the Dow—are necessarily linked, when they don’t have to be: It’s not as if when the stock market crashes, work worth doing, shelter, and food just disappear off the planet. Talk of “the economy crashing” hides the fact that letting people go hungry during crises of profitability is a political decision, not a natural occurrence.
A second problem with talking of “the economy” is that it prevents us from recognizing when things actually are linked, e.g. it casts climate change as an “externality” rather than the logical consequence of an economic growth agenda. Similarly, it excludes and devalues the feminized, racialized, and “informal” labor of social reproduction (e.g., caring for children and the elderly, sanitation, janitorial work) which is often the bedrock of all formal and profitable “work.”
Because of its skewed valuation of labor, “the economy” today does not grow when we undertake urgent and essential crisis-mitigation labors but instead flourishes the more inhumane we are. This is why economic growth is boosted by useless and damaging work boosts economic growth, such as stock trading, landlording, price gouging, attempts to privatize vaccines, flying empty flights, and even political insider trading.
Meanwhile, those whose work is now the most essential—cab drivers, nurses, trucking and delivery workers, grocery store employees—are often devalued and excluded from “the economy.”
If this is what “the economy” means, should we really be rushing to save it?
Societies organized around economic growth are woefully unprepared to deal with the coming crises that their own single-minded pursuit of growth has produced. In the US and UK, there aren’t enough hospital beds or ventilators, and hospital workers have resorted to making their own face masks. In contrast to the scarcity of these essentials, the overabundance of steel and aluminum has gotten worse and a crude oil glut is sending investors into a panic. In short, we have tons of stuff we don’t need, but we don’t have the things we need.
So how would things change if we realized that this quarantine and essentials-only society that we are in right now shouldn’t be the exception so much as a new rule, going into the future?
If we apply the clarity that disaster brings to our thinking about how to organize society, the way forward isn’t hard to figure out. Public goods are the bedrock of such a society. We need guarantees that food, shelter, utilities reach those who need them and contribute meaningfully to society. Meaningful contribution must be redefined to include everyone who works to provide essential goods and services like transportation, food, cleaning, essential construction and repair. Useful work must be seen to include care work, ranging from nursing infants to caring for the sick and elderly. Care work should be seen as real work, involve training and support networks, and take place in all communities.
Unnecessary jobs—basically everything that is motivated only by profit and is being suspended during this crisis—should be taxed heavily because of the burden we, the society, bear for putting up with it. Nonessential forms of commuting and movement should be limited. This will be easy once everyone can find work in local communities, in their local schools, in their local health centers.
Since we’ve been taught to believe in the profit-driven economy, people will wonder: How will we live without the profit motive and its drive to innovation? But clearly the profit motive hasn’t created innovation. A vaccine for viral illnesses is within reach but hasn’t been developed, because it’s more profitable to improve Viagra than to develop treatment for pandemics.
Or perhaps some will may ask: Won’t living outside of the market system create deficiencies? But our health care “system,” if you can call it that, always runs on deficiencies. Millions go untreated, and tens of thousands succumb to preventable illnesses that are silent pandemics like diabetes, heart disease, and obesity. It does not supply what is needed; it supplies what is profitable. “If the stock market crashes, people will lose retirement” is also no excuse. Retirement should come from Social Security, a promise by younger generations to care for their elders enshrined in a collective contract, not the reckless whims of greedy traders. We need to de-link life’s essentials from unessential and damaging things and from the profit motive.
Every crisis is an opportunity not just to set short-term political agendas but to open up long-term visions of what’s possible. Especially in an unprecedented moment when global commercial activity has come to a standstill, we can be brave about asking for a better world. Many progressives realize that this crisis requires us to change our political priorities to favor people over profit. Their short-term response has been to demand paid sick leave, UBI, freezes on rent, etc., with long-term demands including Medicare for All and the Green New Deal. These are all crucial things. But we can go even further if we recognize that crises aren’t going away. We need to quarantine “the economy” and think beyond it. We should ask not for just a “bailout” for workers now but for a society where all essential work is rewarded for its full value, once and for all.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
