An article describes Ontario Finance Minister Charles Sousa as having to pull of a miraculous balancing act:
He’s trying to prepare his first provincial budget while walking a high wire between anti-poverty advocates calling for more spending on relief programs and business groups calling for lower taxes to support the province’s faltering economic recovery.
Lowering taxes means reducing the government income and thus government spending. To pit this issue against creating a fair social assistance program is like saying “let’s cut back our household spending by not eating.” To many people on social assistance are actually starving, going without meals or eating most of their meals at soup kitchens and with food from foodbanks. Food banks were supposed to be temporary measures in the 1980s, not an accepted part of the landscape! “Saving” money by allowing the gap between what they have and what they need grow larger will mean paying for it in increased social costs – hungry children, medical bills and the other costs of poverty.
We need to challenge this type of argument. It isn’t a balancing act between these two issues. Finding the just fair tax levels is a separate issue from making sure that those who have lost their jobs or are unable to work are provided for. We need to have some serious discussions about taxes but those are seperate. For good information about taxes in Canada check out http://www.taxfairness.ca/ and People for Corporate Tax Cuts. Particularily relevant to this topic is a video on People for Corporate Tax Cuts that points out that for every dollar put towards people on low-incomes, the economy gets back $1.70 because the people spend it, and for every dollar put towards corporate tax cuts, we get back thirty cents. Corporations don’t have to put their savings into producing new jobs, they can put it into CEO bonuses, head-offices and off-shore tax havens.
Too often workers will identify with the business groups because they aren’t (yet) receiving social assistance and they don’t want to identify with that group. People want to believe that those on social assistance are somehow different than them, because they don’t want to believe they could end up there themselves. They want to believe that tax cuts for businesses will somehow save them from unemployment.
An article by Yves Engler in the Canadian Center For Policy Alternative’s Monitor explains why employees should think of themselves as being on the side of those on social assistance. There Mr. Engler speaks of the social wage, the socially acceptable minimum pay and benefits. He explains that for corporate lobbies
to reduce their salary costs, a multipronged attack against wages is needed. Simply cutting their own workers’ salaries is only effective to a point. If workers feel they deserve better wages, and social entitlements are available, they will refuse to accept less than the prevailing social wage.
Cutting back social assistance rates is part and parcel of the efforts to lower their own labour costs. Social assistance really doesn’t make up a significant enough chunk of public expenditure.
Social entitlements such as welfare and EI are an important meant to protect the incomes and conditions of working people. Decent welfare and unemployment benefits provide a security guarantor for wage workers who may fear losing their jobs. When decent social entitlement exists, invariable workers’ bargaining powers is improved.
Charles Sousa doesn’t have a balancing act before him. What he has is political cover from the business lobby to make his ideologically inspired choices to keep money in the hands of those who already have money, and to encourage workers across the province to accept lower real incomes. Or of course the opportunity to take a real leadership role, but I won’t hold my breath waiting. Instead I’ll join the other supporters of the Raise the Rates campaign and mobalize.