The Convergence of Economic and Social Development

1. Genuine Progress Index for Atlantic CanadaIndice de progrès véritable - AtlantiqueSocial and Economic Development- Are They Compatible?Ronald Colman Ph.D,FEDC-DM, Halifax, 19 March, 2003

2. The Convergence of Economic and Social Development New economy brings • New social faultlines, and • New opportunities in society.

3. New Economy….New Faultlines • Knowledge economy may exacerbate education and health disparities • Dismantled trade barriers have major impact on domestic firm structure, work hours, work security • Women doubled employment rate affecting gender roles, children, family structure, time stress • Era of fiscal restraint shrinks health and social supports, social capital is stressed. • Natural resource consumption has deeply altered fishing, forestry, farming, water resources.

4. More consumption of goods…. But natural world is poorer

5. Result: Economic Developers Face New Paradigm • Economic and social development inseparable. • Global evidence: greater income equality is related to economic success and higher productivity.(Savoie, Osberg, Sharpe, et al) • Realistic view of “capital” includes human, natural, and social capital…. and their depletion. • Costs of ill health, illiteracy, crime --crowd out investment in productive infrastructure.

6. Full cost accounting shows: Unemployment, poverty, inequality, poor education bring… • higher costs of health care, crime; defensive expenditures • loss of innovation potential….by waste of precious human assets(C. Leadbetter, et al; Livingstone, 1998) Full-cost accounting improves market efficiency, (eg energy conservation); AND obviates need for heavy-handed government regulation

7. E.g. Health costs of inequality …. • Low income women 15-39 = 62% more likely to be hospitalized than high income women; 40+ = 92%. Men < 40 = 46%; 40+ = 57% • No high school = use doctors 49% more cf BA; Low income = 43% more than higher income. $70 mill/yr = excess use due to inequality • If all Nova Scotians were as heart healthy as higher income NS = save 200 lives, $124m /yr

8. ….delayed development in children • 31 indicators - as family income falls, children have more health problems, (NLSCY, NPHS, Statistics Canada) • Child poverty -> higher rates respiratory illness, obesity, high blood lead, iron deficiency, FAS, LBW, injury, delayed development, poor job prospects….+…. ….Poverty is costly!

9. The high costs of poor education and unemployment • 42% NS prison inmates have less than Grade 10 education (cf 19% population) • Aboriginals jailed at 4 times pop. Rate • 67% unemployed at time of admission (=5x population rate) = Costly: • $44,165 inmate/year; cf 3-year SMU - tuition, room, board = $33,200

10. Economic developers …new paradigm • Quality of life influences location decisions -especially for knowledge economy sectors • Efficiency and equity no longer a tradeoff…. new notions of competitiveness • Longer- term innovation capacity more important for sustainable development than short-term productivity gains

11. Economic developers … Area Development magazine- corporate surveys say knowledge-based sectors watch quality of life indicators… • crime rates • recreation, • environment (air quality influences CEO location) • education, health care

12. Quality of Life a Proven Economic Development Issue • US cities which invested in quality of life and social infrastructure retained best and brightest.(Richard Florida, 2002) • Montreal resurgence explained by economic and social attractions - I.e. environment, arts, festivals, recreation, diversity.

13. More awareness of Econ-Social links, awareness of indicators Quebec election, social issues are in the forefront: “We have one of the world’s highest suicide rates among young people, one of the highest divorce rates, one of the highest rates of single-parent families, not to mention North America’s highest abortion rate and lowest birthrate. What are the people we elect to govern us doing to solve these problems?” Henri Comte, president, Medianor, Globe & Mail (Mar 15)

14. Challenges in advancing new paradigm are major • Current indicators equating GDP growth with wellbeing are misleading - for policy makers and public alike. E.g. Higher fuel consumption and crime rates make economy grow • Data availability limited by current view • Silo nature of government • Requires long-term vs short-term (4-5 yr) thinking (investment orientation)

15. Government Silos…. costly examples • Tobacco control: need ministries of Health, Education, Finance, Tourism at table • Employment: Government and unions failed to cooperate on voluntary work time reduction to avoid layoffs (Albany NY model) • Equity and social inclusion-no ministerial portfolio (UK now has one)

16. Human, social, natural capital depreciate invisibly if not counted 1) Health as human capital investment • NS workers lose more work days due to illness and disability (8.3/yr) compared to Canada (7), Ontario (6) • If NS workers were as healthy as Canadian workers, economic savings would be $63 m. /year. If NS workers matched Ontario = savings would be $97 m. • Health promotion pays = In NS healthier workers can save economy almost $100million per year

17. Current indicators send misleading messages • Canadians spend $10 billion buying 40 billion cigarettes – counts as economic growth • Canadians will spend $12 billion on fast food. Tim Horton’s will open 170 new stores • Taxpayers will spend $6 billion treating smoking and obesity-related illnesses • We spend $103 billion treating sickness, up by 6.5 per cent a year since 1998, and double the spending in 1980 – “growth industry”

18. Measuring wellbeing more accurately • ask whatis growing, not just how much is growing; • distinguish assets (eg health, security) from liabilities (eg sickness, poverty); count sickness as cost, not gain to economy; value health as human capital subject to depreciation • value health and its key determinants (e.g. equity, education, livelihood security, environmental quality) as core measures of wellbeing; • Policy implication = shift focus of action from an almost exclusive preoccupation with treating illness to a greater emphasis on improving health and preventing disease.

19. 2) Social capital -Volunteerism

20. But fewer volunteers/longer hrs. = depreciation of social capital

21. 3) Natural capital depreciation

22. Incentives to move ahead – NS as Nth American leader • Control health costs through health promotion • Outstanding models: Holland (work), Denmark (wind), UK (health), NS (waste) • Explosion in markets for clean technology, organic agriculture, sustainably harvested wood • Good news stories - new indicators would recognize and count assets of Atlantic Canada

23. “Smart Growth” Movement • Conference- Vancouver, March, 2003 • Austin, Texas - development projects must pass 13 sustainability criteria • Melbourne - “triple bottom line”: economic, social and environmental criteria for development • “Slow Cities” movement - Italy, Europe.

24. Fed-provincial policy shift occurring • Inter-jurisdictional: federal-provincial initiatives like BBI, CEED, skills-building, innovation, sustainable communities • ACOA – CED, inclusive entrepreneurship & loan provision, e.g. FRAM, ABSN • Inter-sectoral initiatives; Fed. Cabinet social and economic committee rotating chairs; Commissioner of Sustainable Development • Social determinants of health recognized

25. Provincial initiatives - e.g.: • Newfoundland Strategic Social Plan; Social Audit; Community Accounts • Manitoba legislated sustainability indicator reporting • Quebec – Anti-poverty law; four-day work week proposal • AACC – organic agriculture initiative • NS – Office of Health Promotion

26. Innovative policy e.g: Adjusting to new employment realities Statistics Canada, General Social Surveys, Households’ Unpaid Work, Labour Force Surveys, Women in Canada, Women in the Workplace, CANSIM

27. Dual Earner Families as Percent of All Families in Canada Statistics Canada, Characteristics of Dual-Earner Families, Charting Canadian Incomes 1951-1981, Women in Canada

28. Labour Force Participation Rate, Mothers with Infants, 0-2, Canada, Statistics Canada, Canadian National Child-Care Study, Labour Force Annual Averages, Charting Canadian Incomes 1951-1981, Caring Communities

29. Working Mothers = 75 hours / week 38% highly time stressed Statistics Canada, General Social Survey; Andrew Harvey et. al., Where Does Time Go?, Statistics Canada GSS Analysis Series

30. Long Work Hours and Health • Women moving to longer work hours: • 4+ times more likely to smoke • Twice as likely to increase alcohol consumption • 40% more likely decrease physical activity and gain weight • 2x likely experience major depression • Links to anxiety, strain, irritability, fatigue, sleeplessness, poor eating habits

31. Long Work Hours and Health • Less parental time with children may affect mental wellbeing of youth • May hasten family breakdown • Long-term subtle health consequences: Nova Scotians spend 30% less time in kitchens than 1992, eat more fast food -- impacts obesity, health of children (Harvard study) IN SUM – economic, social realities inseparable and must be approached as one

32. Hours per week spent Cooking and Washing Dishes, Nova Scotia 1961-1998 Statistics Canada, General Social Survey, Households’ Unpaid Work, Harvey et. al, Where Does Time Go?, Chris Jackson, The Value of Household Work in Canada.

33. NS can be 1st in Canada to implement leading-edge employment practices • Voluntary work-time reduction can increase employment, productivity • Improve balance: work, family, free time • Dutch part-timers get equal hourly pay, pro-rated benefits, equal opportunity career advancement. Dutch put in 1,370 hrs/yr compared to 1,732 (Canada)

34. Nova Scotia can be environmental leader • Solid waste management- recycling- • Smoke-free public places, • HRM first to ban lawn pesticides • Halifax Harbour, Sydney Tar Ponds • Kyoto as economic opportunity….

35. Can we do it?% Waste Diversion in Nova Scotia

36. First Steps Forward 1) Full-cost accounting, reporting of where we are with current data. Public costs, savings estimated = WHAT 2) Understanding, analysis of key linkages between social, economic, environmental outcomes = WHY 3) Identify targets and objectives = WHERE TO. 4) New indicators are identified publicly and adopted. Independent verification by statistics agencies, others. 5)A cross-sectoral strategy and champions to promote objectives, monitor progress, get started = HOW

37. The challenge now - to integrate social and economic development Will we play hesitation…... or leapfrog?

38. The Challenge and Opportunityfor Economic Developers: Step One... • Inaugurate full-cost economic reporting to include human, social, and natural capital along with the manufactured and financial capital already counted. • Statistics Canada has endorsed this approach, and created a framework. Methods, data available. • Provides a bold, accountable basis for policy initiatives that join social, economic development • Nova Scotia could become first province to implement it, serving as pilot and model for Canada

39. What kind of world are we leaving our children? – It’s up to us….