In my last column I discussed the need “to build more sustainable and inclusive economies and societies”, as UN Secretary General António Guterres wrote in an April 28th editorial in the New York Times. Note he links sustainability to inclusiveness – the better world we seek to build, he added, is not “one that is good for only a minority of its citizens”. Because globally and in Canada we face both the massive challenge of rapid human-created changes in global ecological systems and the concurrent, and related challenge of rising inequality.
As Heather Scoffield pointed out in this newspaper on May 12th, “the pandemic economy has shown us how steadfastly the deck is stacked against low-income and precarious workers”. Hourly-paid workers – who generally have low pay, few benefits and not much job security – are now almost two-thirds of the workforce. But while low-wage employment is down 30 percent compared to a year ago, she adds, it is only down 1.3 percent among high wage earners.
This is ironic, because it turns out that many of our most essential workers are among our lowest paid. Recognising this, the federal and provincial governments have given them a pay increase. But if their work is that essential, then the pay raise cannot just be a temporary bonus for the duration of the crisis. Their work does not cease being essential when the crisis has passed.
The more general point here is that we vastly overvalue the worth of some people – e.g. sports and entertainment stars, major corporate leaders – while undervaluing the essential work of cleaners, sanitation workers, care aides and the like. There is a principle in environmental economics that could be adapted and applied here: Full cost accounting.
So what about ‘full value accounting’? We should pay people their true worth to society. At the very least, that would mean that everyone gets not just a minimum wage, which barely keeps your head above water, but a living wage. That should be accompanied by mandating a comprehensive set of pension, sick pay, vacation and other benefits, and an end to ‘McJobs’ that lead to perpetual economic insecurity.
These reforms should be a central plank in the post-Covid recovery plans for the federal and provincial governments, along with a rigorous examination of the concept of a Basic Income for everyone, something we have in effect implemented during the pandemic. This would be simpler and cheaper to administer than the complex set of social support programs we have now, and the evidence from a 1970s trial in Dauphine MB is that it improves health while not replacing the commitment to work.
A second important point is that in making the transition to a ‘One Planet’ society, some sectors of the economy will have to shrink, while others will grow; the transition from fossil fuels to a clean energy system is the most obvious but far from the only example. We know that people working in a whole range of industries will be affected, just as they have been by the pandemic.
Hence the call for a just transition; we need to support workers and industries as they change. In the case of fossil fuels, we should stop all subsidies and tax breaks – amounting to at least $600 million federally in 2019 and $830 million in BC in 2017–2018, according to the Winnipeg-based International Institute for Sustainable Development. That money should go to supporting the clean energy sector and the just transition for fossil fuel workers.
So how can we afford all this? Well, Henry Ford recognised that if he did not pay his workers enough to buy his cars, he was not going to sell many. The same principle applies here. Yes, prices will rise if wages rise, but we should pay the full cost of our society, not take a cheap ride on the backs of the poor.
We need to become a more just society, where people earn a fair wage and the rich pay their fair share – which means higher taxes and, especially, a wealth tax. The wealthy can easily afford it, and after all, as has been remarked, ‘taxes are the price we pay for a civilised society’.
© Trevor Hancock, 2020