Societal Economics

  Our political elites keep talking about the economy. The pundits talk about the economy. Business leaders say, “It’s the economy, stupid.” And the financial institutions keep racking up the profits while the rest of us are frustrated by ever-increasing social costs.  Ronald Reagan, a former President of the United States, used to espouse something called trickle-down economics — the theory being that if we let the rich flourish the spin-offs will benefit the lesser among us eventually. So far, I’ve seen a few get very rich and the rest of us stay much the same or worse.

Since 1979, US statistics tell us that the lowest income stratum has improved by 16%; the middle income group has improved by 25%; the top or richest level has grown by 265%! What’s wrong with this picture?
Instead of ‘trickle-down’ economics, why not have ‘trickle-up’ economics. Now that it’s summer, let me try out a gardening analogy for you. We plant, we fertilize and water — we wait — then we harvest the abundance.

Why not:

1. Give the poor some money (plant the seed) through an allowance program (modify Ont. works/ODSP/welfare, etc.) that has no clawbacks and does not cease until the individual is fully employed at above LICO (low income cutoff) level. Treat this money like a pension  — taxable but like a guaranteed income.
2. Provide suitable training programs (fertilize) that will nurture the the individuals involved, guide them into programs where they can exploit their competencies and develop self-esteem. I am thinking primarily of hands-on types of programs like carpentry, general construction, landscaping, gardening, food preparation, hospitality industry and so on. Of course, you must give these same individuals the skills to seek and hold employment.
3. Most of these individuals will require ongoing counselling (watering) to keep them on track and to avoid discouragement  when everything doesn’t work out as hoped.

The Outcomes (the harvest):

1. We will create a much-needed, stronger, more versatile workforce for jobs in high demand.
2. Individuals will gradually move into jobs that will allow them to move off the allowance track and onto the income track.
3. The allowances paid out will flow directly back into the economy generating necessary productive economic activity (sometimes called ‘stimulus’).
4. This “hand-out” becomes a “hand-up” by the fact that it is an integrated program and does not allow individuals to get lost or fall through society’s cracks.
5. Because there will be fewer below LICO and more of us consuming goods and services, the entire economy will thrive. This is good news for entrepreneurs and corporations alike who will benefit the most.

Abundance

As I was enjoying a Sunday morning hot tub with Bonnie today, I realized that what I was referring to yesterday was simply, abundance. We live in a society, in a place where there is great abundance of all the things people need: food, drink, shelter, clothing and so on. Yet we still have an obvious and disproportionate way of sharing this abundance. While my family enjoys lots of nutritious food every day, our house stays warm in the winter and we have such lavish benefits that include a swimming pool in summer, a hot tub year-round, membership in an exceptional athletic club (Variety Village) and can afford to subsidize the grand-kids in Cubs and Sparks. So we have a lot and I haven’t even mentioned several colour TV sets, CD players and multiple computers. Yet we don’t consider ourselves rich.

It appears clear to me that my family lives in a lifestyle of abundance — did I mention that we have two cars? So how come there are so many families, especially those with young children living in poverty in our country? Is it because those of us who have don’t want to share what we have? Or is it because we don’t think that those who don’t have don’t deserve to have?

Perhaps it’s because we don’t know how to share effectively. We tend to assume that our political leaders will solve this societal problem but so far, they haven’t been very successful. there is an entrenched corporate mindset that leads the thinking on this issue and, unfortunately, corporations feel responsible only to their own shareholders and not to the community at large. Yes, I know some organizations have very generous charitable programs but many are focused only on special interest areas that have captured the attention of the senior executive groups.

Frankly, what we need is to get more money in the hands of the poor so that they can spend it. When they have money to spend they become consumers and our economy thrives on consumption. So why aren’t we paying people who do necessary grunt work livable wages. Why aren’t we providing livable support funding for those unable to work at regular jobs. When private or public money flows into the lowest income recipients in our society we will all benefit because that money flows back into the economy at large.

Only when individuals are earning significant wages in permanent jobs will they have an opportunity to put something by for the future. By giving people the incentive to live well they will naturally aspire to improve themselves and to build better living regimes for themselves. Thus we must raise the minimum wage to $12 or more an hour and provide support levels beyond $12,000 a year for those chronically unemployed or unable to be employed. The payback to our economy and to the well-being of our society will be enormous.