Politics and Transformation: Welfare State Restructuring in Canada

1. Politics and Transformation:Welfare State Restructuring in Canada WENDY MCKEEN AND ANN PORTER Ryan Whittick

2. Welfare State and Social Reproduction • Welfare State: A country with highly developed social services • What does a welfare state do? A welfare state provides: Health Education Income for those who are unable to support themselves (elderly, ill, or people that can’t find work)

3. Social Reproduction: A Process where by peoples basic needs are met. • Needs: • Ensuring people have a minimum to survive on • The requirement for long term development and education are met • People are cared for or have the means to look after themselves if they become sick

4. Who takes responsibility for societies needs? State, Market, • Institutions (Family, Church, Trade Unions, Benevolent Associations, Charities, Food Banks) • Contested Issues Division of responsibility The standard set for how income security is provided and care is given

5. What shapes these Issues? • Changing economic issues • Evolving family structures • Federal provincial institutional arrangements • Conflicting Ideas and political struggles

6. What shapes these Issues? BECAUSE: Early in the century responsibility for human welfare was left to: Family, market, religious organizations, civil society, *Not to the government*

7. During and after WW 2 • WFS expanded, and the state assumed greater responsibility for Social reproduction • Provision of: • Health, Education, Welfare Was assigned at confederation to the provinces, while the federal government was granted the major means of revenue.

8. Result: How Does This System Work? Negotiations and struggles between different levels of government Provinces compete for funding from the government

9. Federal Government • Provides provinces with the appropriate amount of funding • Establishes programs involving the transfer of income directly to individuals • Including programs related to • Pension • Unemployment • Child or family benefits • Canadian millennium scholarship

10. Two Major Questions of This Chapter: • What form has this transformation taken, and what are the implications for individuals and groups within society? • Which social forces and groups of actors have pushed for welfare state restructuring, and in what direction? • These Questions relate to the Nature, and extent of the transformation, as well as the politics

11. The Argument • The new welfare state is characterized by “employability” emphasizing re-entry into the work force, by the shift from universality to the targeting of benefits from adults to children • More generous system compared to what the neo-liberals described as “tough love” • The Aim: Help WF dependants “Kick the Habit”

12. The result of the new system: • More punitive (punishing) model • The Result: • Increased • Poverty • Inequalities • Hardship among some groups

13. Downloading of responsibilities for meeting social needs to individuals and the homes • Social groups have become marginalized in WFS discussions

14. Comparative and theoretical approaches: New WFS-based not on universality, but by the selective targeting of benefits base on income. -In An Effort To: increasing work incentives, reducing expenditures, and increasing benefits to the poor

15. Clayton and Potusson Argue • Significant WFS occurred, but changes have not been positive • Poverty, and inequality have increased, • security of employment and income has diminished • Growth per capita social spending has failed to keep up with per capita GDP • Some people are running schemes with the money they receive from social assistance

16. Sociological Imagination • Potussion: What needs to be taken into Account when assessing politics of change? • Social Interest • Coalitions between different sectors • Long term mass unemployment

17. Feminist Analysis / Argument • WFS cannot simply be evaluated in terms of the relationship between states and markets. We must take into account: • Unpaid work in the home, and it’s contribution to human welfare • Services that relieve house holds of caring work, and thus provide all members with access to paid work are of fundamental importance • Moreover, the relationships between States-Markets-Families is critical

18. Analysis from the perspective of Families-Markets-and States • A range of other institutions have played a role in WFS restructuring • Churches, food banks, ect… The relationship between F-S-M was key welfare state nexus in the period after WW 2,

19. Critical Element: Assessing the Welfare State • Not simply having the income to support an “autonomous house hold”, but the ability to create networks of support that can provide a sense of community and reduce isolation which is often a part of caring activities

20. Political Voice • The need for care or to give care affects ones ability to earn income and both receiving and giving care affects ones ability to participate politically • Equally Important: a sense of effectiveness of the more marginal political coalitions and actors pushing for WFS change in other directions • Macro level trends and developments • Struggles at the policy community level

21. Political Voice • Much of the struggle over welfare state occurs as the debate over policy-whether it be poverty, health or education • Usually, debate only involves narrow groups of political actors, not the entire political community • Result: plenty of voices and concerns are never heard, and therefore never considered

22. From Keynesian to a Neo Liberal Welfare State • The period from WW 2 until the mid nineteen seventy’s was one of welfare state expansion in Canada, and else where in advanced capitalist countries. • During WW 2, two key programs of the Canadian welfare state were introduced • Unemployment Insurance 1940 • Family Allowance 1944

23. Major Expansions of the 1960’s, and early 70’s • Intro to Universal health insurance • Two new pension programs • The Canadian Pension Program • The Guaranteed Income Supplement, and the Canadian Assistance Plan These two programs provided federal and provincial cost sharing for social assistance and social services. • provincial health and education expanded

24. Key Factors of the WFS of this Period • The state had come to assume greater responsibility than it had previously for social reproduction • The state realized: • Economic systems could result in unemployment through no fault of ones own • Federal Government had to keep unemployment relatively low, and provide income security for those who fell through the cracks • Welfare state programs were considered important: • Maintain social well being of the aggregate demand • Beneficial to the economy as a whole

25. Universality • Universality of benefits was granted as a right based onparticipation in the labor force, or as a right of citizenship, and was based on a family wage. Moreover, social welfare became more firmly centered on a core state-family-market nexus (connection)

26. Universality • Ultimately, this resulted in: reinforced structural inequalities for large numbers of Minorities, and women (especially, those not in full time employment were excluded from the benefits of welfare state)

27. Mid 1970’s Expansion Period Comes to an End • Number of factors faced reevaluation of the WFS model • Growing economic crisis • Fiscal pressure on the welfare state • Changing labor market • Family forms • Political struggles

28. 1990’s-The Most Substantial WFS Restructuring took place • Budget was particularly significant in both reducing expenditure and restructuring federal involvement in social policy • The Canadian Assistance Plan and Established Programs Financing Act were replaced by The Canadian Health and Social Transfer • This provided transfers of funds to provinces with fewer conditions

29. 2000 • A new Neo Liberal Welfare State had been consolidated • The 80’s and 90’s were more concerned with inflationrather than unemployment

30. 2000 Shift in Neo Liberal Philosophy • The shift in the new neo liberal philosophy was that high unemployment was the result not of market failures but of individual behavior, attitudes towards work, and the nature of welfare state programs themselves further influenced the shape of welfare state programs

31. 2000 Shift in Neo Liberal Philosophy • Income security programs were seen as creating dependency and disincentives to work • Redesigned to be compatible with economic growth with an emphasis on Individual behavior

32. New Philosophy Towards Dependency • Incentives to enter and remain in the work force • Subsidize low wage employment • “active” programs encouraging re-entry into the labor market

33. Shift Away From Universality • Increased “Targeting” of benefits to the poor who are defined in terms of family income level • Social Assistance: Core Model Key Areas • Child Benefits • Old age security

34. Shift In Eligibility • From Individual => to Family • From Adult => To Child • From Labor Force Status => to Family income as a basis for receiving benefits • These shifts are in a wide range of programs of federal and provincial levels

35. Unemployment Insurance / Employment Insurance • UI-key Labor market based state program providing benefits to unemployed according to their past participation in the labor force • Amendments between 1975-78 Focus shift • From Market Failures => to individual attitudes towards work

36. Goal of Amendments • Reduce disincentives to work • Encourage workers to stay employed • There by reducing their dependency on UI

37. Qualifications Reforms Increased the penalty for those who left their employment early, and increased the number of weeks needed to qualify Anyone who: Quit, turned down a job, or was fired for misconduct was eliminated from receiving UI

38. 1997 Amendments (most dramatic changes) • Major with drawls from the social safety net for the unemployed • Receiving UI=> 83% 70’s, 80’s, down to 42% by 1997 • The Result: a major source of federal revenue • The program name changed from UI to EI • Previously all paid occupants of the work force were insured against the risk of unemployment while only a minority are now. • These changes greatly encourage growth and maintenance of low wage, exploitive working conditions, because they left low wage contingent workers no options • Finally, these changes represented an erosion of universality

39. Federal Family / Child benefits • The family Allowance • Child Tax Exemption • Child Tax Credit program • Supplement for those with employment Income

40. National Child Benefits (NCB) • NCB-provides benefits to low and moderate income families through an income tested tax credit with eligibility and amount being based on family incomes reported on previous years tax credit form • Also referred to as NIT- Negative Income Tax

41. Changes In The Philosophy of the program • Disposable incomes of those families with children and those without should be equalized (Horizontal Equalization) • Family Allowance was universalized • Old program-set an amount and paid monthly • New program-oriented primarily to children at risk

42. Goal of FA • To alleviate the poverty of parents who have failed as individuals to support themselves and their children

43. Two Goals of the NCB • To address poverty • To reinforce work incentives • Underlying goal is to maximize private responsibility for the care of their children • NCB also serves a purpose to ensure parents they are better off working

44. NCB 1970’s, 80’s, and 90’s • 70’s it was important for checks to be written directly to women • By the early 90’s the focus shifted to “child poverty”, and any concern for the financial concern of women was lost

45. The Consequences of Restructuring WFS • Erosion of: • Social Solidarity • Social Equality • Downloading of Responsibility for social reproduction from state to family, market, institutions

46. Currently • Poverty rate as 96 went up from 13% to 17.6% • The majority of unemployed have to rely on family or provincial social service • Employment Insurance is 55% of earnings

47. Women • In addition, The consequences of the increased reliance on the family for caring responsibility combined with the assumption that women should be in the full time labor force has made pressure high women especially minority women • Juggling jobs, day care and a fragile position within the labor market

48. Single Mothers • Disadvantaged when it comes to attaining material resources • Targets for being neglectful parents, caretakers, workers • Makes achieving autonomy and access to independent income more distant than ever

49. Negative Facts about WFS restructuring • Has had Negative consequences for the social citizenship status of adults and for their ability to exercise a political voice • Implications of growth of low wage contingent work and increased responsibility for unpaid care work are increasing gaps between those who have the time and energy and resources and those who do not • Children are becoming the new deserving citizens, and increasingly adults entitlement is based on the fact that they are attached to at least one child

50. Understanding The Changes:The Politics of Welfare State Change • After WW 2 the changes facing Canada as a developed nation became more dynamic • Women entered the work force • Internationalization • Economic crisis