Politics and Transformation:Welfare State Restructuring in

CanadaWENDY MCKEEN AND ANN

PORTER

Ryan Whittick

Welfare State and Social Reproduction

• Welfare State: A country with highly developed social services

• What does a welfare state do?A welfare state provides:

HealthEducationIncome for those who are unable to support themselves

(elderly, ill, or people that can’t find work)

• 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

• Who takes responsibility for societies needs?

State, Market, – Institutions (Family, Church, Trade Unions,

Benevolent Associations, Charities, Food Banks)

• Contested IssuesDivision of responsibilityThe standard set for how income security

is provided and care is given

What shapes these Issues?

– Changing economic issues– Evolving family structures– Federal provincial institutional arrangements– Conflicting Ideas and political struggles

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*

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.

Result: How Does This System Work?

Negotiations and struggles between different levels of government

Provinces compete for funding from the government

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

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

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”

The result of the new system:

• More punitive (punishing) model

• The Result:– Increased

• Poverty• Inequalities• Hardship among some groups

• Downloading of responsibilities for meeting social needs to individuals and the homes

• Social groups have become marginalized in WFS discussions

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

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

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

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

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,

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

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

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

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

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

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

Universality

• Universality of benefits was granted as a right based on participation 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)

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)

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

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

2000

• A new Neo Liberal Welfare State had been consolidated

• The 80’s and 90’s were more concerned with inflation rather than unemployment

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

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

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

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

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

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

Goal of Amendments

• Reduce disincentives to work

• Encourage workers to stay employed– There by reducing their dependency on UI

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

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

Federal Family / Child benefits

• The family Allowance

• Child Tax Exemption

• Child Tax Credit program– Supplement for those with employment

Income

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

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

Goal of FA

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

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

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

The Consequences of Restructuring WFS

• Erosion of:• Social Solidarity• Social Equality• Downloading of Responsibility for social

reproduction from state to family, market, institutions

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

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

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

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

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

The Construction of Neo Liberalismas a Hegemonic Paradigm

• Ideological Struggle that took place over 20 years

• Supported by business organizations, think tanks, such as the Frasier Institute, economic officials within the state

• Shift of power away from labor, and a shift of power towards capital

• Entitled strategies to take power away from organizations representing marginal social groups and progressive social movements

Strategies included

• Eliminating Both:– State funding for advocacy groups within

social society (including women’s groups)– Advisory bodies within federal state that

represented marginalized groups to the government

– A Range of other social groups that have been further marginalized by labeling them “Special Interest”

Neo Liberal Cut Backs

• The focus on the individual rather than the state or collective responsibility was a first important step away from social solidarity– Who was affected?

• Single mothers• Married women • Youth

Neo Liberal Cut Backs

Cost are disproportionately borne by women and the poor and the lack of social provision Creates new forms of social inequality

• The possibilities for having policies that foster the reconciliation of paid work and domestic responsibility have become even more remote, as concerns of adults, and especially women are becoming side stepped in favor of focus on children

• Policy making institutions have been restructured in a way that marginalizes opposition voices– Goals Have Shifted To:

• Meet international economic competitiveness rather than domestic well being

The Social Policy Community and the Response of Left Liberal Actors

• Responsible For:– Targeting “Child Poverty”, and those deemed

“Needy”, Elderly, Single Mothers, Women, Children

– Provision on helping only those who have fallen through the cracks

The Social Policy Community and the Response of Left Liberal Actors

• Responsible for Legitimizing:– Neo Liberal Model– Marginalizing the values of Universality– Horizontal Equity– Social Solidarity– Personal Autonomy for women

Summary:Dimensions of a Welfare State in Canada • Significant reduction in state responsibility for

social reproduction• Shifts:

– Major function to encourage people remain employed

• Restructuring has resulted in:– Targeting poor– Privilege of an upper tier of full employed workers– Shift benefits from adults to children– Has encourage the growth of low wage industries

Impact of Restructuring

• Increase in Poverty

• Inequality

• Hardship

• Especially for:– Women– Poor Women– Minorities and their families– Increased pressures and poverty

In Design and Impact

• Policy shifts work against the possibility of:– Women gaining autonomy or independence

from exploitative situations– Reduced space for individuals to exercise a

political voice or public engagement– Targeting the marginalization of more

radical voices and visions

Questions• Should the Federal Government be responsible for social

reproduction?• Is it possible for people to lose the motivation to work if they have

the ability to rely on social assistance?• Have people lost the motive to work as a result of social assistance?

• What is so important about reducing isolation, and having a sense of community with respect to social services provided by the government?

• Why are women and minorities the ones mostly affected by the neo liberal hegemic paradigm

• Is engaging in more HARDSHIP a really bad thing for the nation when It forces people to strive?

• Should people have a choice as to where their tax money goes, with respect to social reproduction?

Questions