Feb. 10, 2015 – Anna Mehler Paperny, Global News
The percentage of working-age Canadians who aren’t working – who aren’t even looking for a job – is at a historic high years after the economy supposedly bounced back from the recession. The labour participation rate for Canadian men in their working prime – ages 25 through 54 – is the lowest it’s been since Statistics Canada started collecting that data.
Women’s participation rate, rising since the 1950s, has been largely stagnant since 2006.
Canadians want to work. They’re settling for temp, seasonal or part-time jobs, without the stability of a pension or benefits, to stay in the workforce.
But for many, the numbers just don’t add up. They go back to school; they settle for seasonal, contract work; some just throw in the towel.
Read the series
- Instability trap: When you’re income rich, but asset-poor
- Chequed out: Inside the payday loan cycle
- Feb. 17: Life in the temp lane
- Feb. 23: Retirement lost
‘Like banging your head against a wall’
Jillanne Mignon quit her job because she couldn’t afford it.
She was working a decent gig for the city of Winnipeg’s 311 service – a job she’d left her university program to take so she could support her toddler son, Michael.
But even with that salary, she found herself in a cycle of debt just to pay for child care.
“When there’s a subsidy, there’s no spaces. When there are spaces, there’s no subsidy. …
“When you have people depending on you and you can’t give them all that you want, it’s nightmarish.”
Ultimately, she realized it just didn’t make sense.
“I’m going to work to pay for childcare because I don’t want to be on welfare.
“But then it’s better if I go on welfare because then I don’t have to worry about childcare because welfare won’t force me to go to work until my kid is six. So I’m tired. And I don’t know what I want to do.
“It’s like banging your head against a wall.”
So she quit her job. Moved to Toronto, where the combination of family support and all-day kindergarten helped with child care.
Swallowed her pride and went on welfare.
“When you have student loans and you still have to go on welfare, that hurts. Because you’ve tried to educate yourself so you don’t have to be dependent on the government for social assistance,” she said.
It sounds like an inconceivable decision, to abandon a decent job in favour of a penurious social-assistance program that’s become (inaccurately, evidence shows) associated with sloth and system-scammers.
But that’s the reality for a growing number of Canadians.
Job market dropouts
The percentage of Canadians over 15 who are working or actively looking for work is 66.1, its lowest point since 2001. (For both men and women aged 25-54, it’s 86.1 – the lowest since 2002. For men 25-54 it’s 90.4, the lowest since at least 1976.)
Ontario’s participation rate for the same age group, 65.9, hasn’t been this bad since 1998. In British Columbia, under two-thirds of the working-age population is in the job market – the lowest percentage since at least 1990.
“It is indicative of a weak economy, no question,” said Mike Moffatt, an economist with the Mowat Centre and the Ivey School of Business.
While it isn’t unusual for job market participation to drop in a downturn, recoveries are supposed to have the opposite effect, as more people re-enter an invigorated labour market. If the percentage of people working or looking for work continues to drop, as it has, something’s wrong.
Moffatt sees the historic low participation rates as part of a decades-long trend, hastened by the financial crisis.
“It’s a trend, unfortunately, I expect to see continue with globalization and automation: It’s getting tough for men, particularly ones that don’t have levels of higher education,” he said.
It’s “problematic not just for the individuals, but it causes an ever-shrinking tax base if you have smaller proportions of adults in the labour force.
“It absolutely is worrisome.”
A government that wants to reverse that trend, then, would have to both encourage men and women to join and remain in the labour market, and ensure they have the skills they need to do so. And while both federal and provincial governments have touted “job creation” partnerships with businesses, economists have argued it makes more sense to focus on the individuals who need jobs and marketable skills.
“People want to be in the workforce. I don’t think anyone wants to stay at home and feel useless,” said David Macdonald, senior economist with the Canadian Centre for Policy Alternatives.
“The question is, how do we provide circumstances where there’s employment for them?”
A fraying safety net
Mignon has a plan: In Toronto, on welfare, she spent nine months researching the job market to qualify for Second Career funding so she could go back to school and get back in the workforce.
“I worked for that money,” she says.
And now, if she can keep up the commute from her Parkdale apartment to Scarborough for classes at Centennial College, she can make it work.
But it isn’t easy.
Every dollar of the money she’s getting to pay her tuition is being deducted from the welfare cheque she needs to pay rent, feed and clothe herself and Michael, who is now five-going-on-six and adjusting to Grade One and the prospect of homework.
“Social assistance is now saying, ‘Well this [Second Career funding] is an income,” she said. “It’s taxed. They’re going to take it off my cheque, dollar for dollar.
“I’m basically being penalized [for going back to school].”
Ontario Community and Social Services spokesperson Kristen Tedesco confirmed that Second Career funding gets deducted from welfare cheques. But she added that “A recipient’s payment can fluctuate for a variety of reasons. … We encourage Ontario Works clients to contact their caseworker immediately with any payment support issues.”
(Mignon assures that she has: “I have a very big mouth,” she said, laughing. “I’ve realized if you don’t advocate for yourself, they’re just going to step on you.” For now, she says, she’s making it work.)
At the same time, there are strict limits on anything Mignon can save: Put too much aside, and your welfare gets clawed back.
The asset limit on how much Mignon and her son can save, given the assistance they’re getting right now, is $3,000.
“They’ve basically said, ‘We are going to keep you in poverty by not allowing you to save enough money to get out of poverty.’”
Upping that asset limit by a few thousand, she said, could change everything.
“If you have $10,000, you have a stable stand. Maybe a bank will lend you $500. Maybe you can move to a better neighbourhood; if there’s an emergency, if you need your wisdom teeth out, you can afford that,” she said. “You can say … ‘Let me see what my options are.’”
“But $3,000? $3,000 gets you nowhere quick.”
Economists and advocates who study the social assistance cycle argue having savings, or being allowed to accumulate them without losing income assistance, would help keep people from falling back into poverty.
“You have to impoverish yourself to have access to” welfare, says Mary Marrone, director of legal services at Ontario’s Income Security Advocacy Centre, This makes it much more difficult to pull yourself back out.
“People are living on a razor’s edge. … You haven’t had a chance to build up any savings.”
The goal of social assistance programs, Marrone argues, should be to get people into sustainable financial situations so they stay off social assistance, rather than simply get them out of the program as soon as possible.
When social assistance becomes ‘a trap’
About 45 per cent of people who leave Ontario Works to rejoin the job market are back on welfare within two years, the province’s Tedesco said.
Frances Lankin, the former head of Toronto’s United Way, co-authored a report on how to reform Ontario’s social assistance framework. She says there’s too much focus and too many resources devoted to policing the program rather than helping people get off assistance, and stay off.
“It’s not a joy, being on welfare,” she said. “Social assistance can become a trap.
“So if minimum wage is very low and if the jobs available have no prospect of becoming decent, middle-income jobs … let’s say you’re a single parent with a kid with asthma, all of a sudden you’ve got a moral decision: Do you go back to work and get a job that pays a fraction more … but has no drug coverage to pay for the asthma drugs for your kid? That’s not a decision that, ‘Oh, I am lazy and don’t want to work.’”
At the same time, Lankin said, people in that position are faced with fewer options.
“A number of the supports outside social assistance have become frayed over time. And people can’t live on the margins. So they fall into social assistance quicker and it’s harder to get back out.”
On bad days, Mignon is overwhelmed with the juggling her life entails, swamped by self-doubt. Graduation feels far away, the prospect of subsequent employment iffy.
On good days, she has plans: Getting Michael into a better school. Moving – maybe someday to a white-picket home in the suburbs around Toronto, with a backyard for Michael.
Graduating from Centennial and working in community economic development.
“I know what it’s like to be on both ends of the spectrum – to have financial security and to be very, very, very insecure, financially,” she said.
“I think that, as Canadians, we kind of have rose-coloured glasses on where our economy really is.”