Category Archives: Social policy

What Drives the Circular Economy

sharing-economy

Published in the Telegraph-Journal 14th May 2013

Economists continue to insist that the recovery is at hand, even though unemployment remains stubbornly high, global warming continues unabated, GDP growth stagnates one quarter after another and governments stagger under record deficits.

In the face of these set-backs or even outright failures, some are asking whether more economic growth is the single solution to deliver prosperity and well-being for our societies. There is little denying that development and growth is essential for poorer countries but in the advanced economies the argument is gaining momentum that ever-increasing consumption makes little contribution to human satisfaction. In addition, the critics of unconstrained growth charge that the ecosystem that supports economies is straining to the point of breaking under the weight of rising consumption. For these critics, the solution is devising a route to prosperity that does not depend on continued growth.

This limited-growth thesis has startling implications. It proposes that society has reached a fundamental turning point in its economic history in which the growth of industrial civilization can no longer be guaranteed. Economic orthodoxy would view this as heresy. Supporters view the limits to growth as the most urgent task of our times. They see the possibilities of flourishing within the ecological limits of a finite planet. And they see an opportunity to improve the sources of well-being, creativity and lasting prosperity that lie beyond the reach of the market.

This is what became known as the sharing economy. Participants in this economy were developing better ways to share fewer resources for less money, sacrificing or limiting their ownership of things such as living accommodations, vehicles, clothing and consumer technologies. The sharing economy, which can be seen as a circular economy rather than the conventional linear economy, was built on the belief that, because the Internet had connected everyone, a global inventory had been created that could be discounted and shared.

The profit margin from the sharing business was significantly smaller than anyone thought even a few years ago. With time and perspective, the circular economy has failed to take over in the way it was anticipated. Instead, its resilience has been uneven and limited to specific segments of the market. The ideal sharing economy customers are young urbanites who value flexibility and savings over consumer purchases. The question is how much of their decisions are ideological and driven by concerns for the planet.

But the limited success of the circular economy is only part of the story. Tim Jackson, professor of sustainable development at the University of Surrey and an economic adviser to the UK government, makes a compelling case against continued economic growth in developed nations. Mr. Jackson argues that “prosperity goes beyond material concerns”, and at beyond a certain point growth does not increase human well-being. Mr. Jackson asks if it is conceivable that economic growth may not deliver lasting prosperity.

These concerns have some resonance in New Brunswick. Some are beginning to question if conventional economic growth is the solution for everyone in all parts of the province. New Brunswick is a society with not insignificant economic problems. Life in this province can be, for an increasing number of its residents, more difficult than in other places. But New Brunswick also possesses greater strengths and assets and it is clear that most residents find it a rewarding place to call home.

Facing a slowing economy, increasing regional disparities and a chronic skilled human resource scarcity, governments and businesses will soon be forced to review the prospect that unorthodox directions should be considered alongside those traditional policy solutions that have shown limited effectiveness for an increasing number of New Brunswickers.

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Filed under Economic Growth, Innovation, Sharing Economy, Social policy

Employment Insurance Reforms Are Inevitable But the Methods Are Not

By Peter Lindfield, published in the Telegraph-Journal 15th June 2012

The federal government recently announced sweeping changes to Employment Insurance (EI) that will have dislocating effects for many workers across Canada. In the Maritime Provinces, workers in industries that have seasonal characteristics will be particularly hard hit as the government’s new rules attempt to reduce their reliance on EI during what can be months of unemployment. The new rules place more stringent conditions on workers with three or more EI claims in the past five years, or who have collected EI for more than 60 weeks in the past five years.

Seasonal workers in industries such as fisheries, forestry or tourism would be considered frequent claimants and would be required to accept work for which they are qualified after collecting EI for seven weeks. If required, training would be provided to allow workers to learn new skills. Long-tenured workers and occasional claimants who collect EI less frequently would be given more latitude to find employment.

These new EI rules have been met with derision by opposition political parties, but some business groups welcome the changes. “These new rules should help push people off of a pogey lifestyle and into steadier jobs,” said Gregory Thomas, national director at the Canadian Taxpayers Federation.

Some critics of the government’s changes to EI have complained that a significant number of seasonal workers will be required to travel substantial distances to find year-around work. Other criticisms stem from observations that many workers will be forced to accept employment far removed from their chosen vocations.

Federal government officials deny both charges. “These changes are not about forcing people to accept work outside their own area, or taking jobs for which they are not suited,” said Human Resources Minister Diane Finley at news conference.

There is no denying that Canada’s social programs require an overhaul. The responsibility of government is to find that balance between fiscal stability and social conscience. With the global economy and the harbingers of fiscal and demographic constraints becoming more apparent, there is no guarantee that this twin trajectory can be maintained. At the same time, the gap between haves and have-nots is increasing. It is not a recipe for political, economic or social success: increasingly, this gap is a source of real social discontent.

There may be a better way to address the intersection of social and economic issues. The graduated way in which government introduced recent reforms to the Old Age Security (OAS) is a stellar example. Rather than instituting massive changes in one sweeping move, government has chosen to grandfather today’s recipients into the current plan for an extended period. A similar approach to EI reform could be made to pay large dividends. An orderly and measured transition from flagging industries and moribund locations to more productive ones could be made over the period of years rather than months. A precedent embalms a principle, observed Benjamin Disraeli.

More troubling is the overtly moral tone that has emerged when discussing the recipients of Canada’s social programs. One of the hallmarks of this moralism is the exasperation with what some consider the piousness of the soft-hearted left who are also considered enemies of the work ethic. This reactionary perspective is neither founded in fact nor helpful.

In fact, the consequence of this animus of work ethic moralism represents a danger to the larger project of comprehensive human decency. The current capitalist paradigm vastly underrates the value of economic equality and social stability. For most of the more than two hundred years since the Industrial Revolution, this has been inconsequential, as relentless technological advancement has tended to compensate for short-sighted policies. But economic globalization has re-written the rules in a profound way.

As with the changes to the Old Age Security program, Canadians should view reform of Employment Insurance as part of the blueprint for the Canadian identity. We will achieve greater success if we consider political, social and economic reforms not as a political mandate checklist, but a long-term journey.

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Filed under Government transformation, Income Inequality, Social contract, Social policy