Economic Crisis, Social Fallout
This is the second in a three-part series exploring the effects of the global economic downturn on Toronto. Last week, economist Walid Hejazi gave an overview of what we’re in for as the slowdown worsens. Next week, a view from the halls of power.
Photo by Brad Saunders.
Much of the news coverage surrounding the economic downturn has centred on the threat it poses to Southern Ontario’s long-struggling manufacturing industry. But although a prolonged slump will no doubt have an effect on that troubled sector, it’s the working poor who will be hardest hit, according to John Campey, executive director of the Community Social Planning Council of Toronto.
“As better-paying jobs disappear, or as people with better qualifications start taking the lower-paid jobs—the jobs requiring less skill—people get pushed out of the bottom [and] back onto the unemployment rolls,” said Campey in an interview with Torontoist. This, he says, is creating a growing underclass of people who jump back and forth between social assistance and low-paying temporary jobs.
“Those will be the people who I think suffer the most from this,” he continued. “As everybody on top of them moves down a rung, they’re the people who get squeezed out at the bottom.” The situation will be compounded, he said, by employers’ hesitation to expand operations or hire more workers in a time of economic uncertainty.
With unemployment rates rising rapidly, Campey says that this is the perfect time for government to address the issue of poverty head-on. “The current economic downturn presents an opportunity for the province to take really bold leadership in terms of using the need to stimulate the economy to bring in a really comprehensive and robust poverty reduction strategy,” he said.
The downturn is also an opportunity for the other levels of government, says Campey, and he is pleased that city hall is so far “sticking to their guns” and continuing to spend money on infrastructure projects even as the financial situation tightens. But he also thinks that the city should go further and take advantage of low interest rates to borrow money for a variety of projects.
“I’d like to see the city be as creative as they can about rebuilding that infrastructure and financing it in a way that takes advantage of our current economic situation,” he said, noting that the city could inject life into the struggling construction industry by taking the opportunity to repair city housing, recreation centres, and other infrastructure.
As for the federal side, Campey expressed disappointment with the government of Prime Minister Stephen Harper, which he believes is not doing enough to inject money into the slowing economy. “I think it’s unfortunate that we have a federal government that still doesn’t seem to get the need for counter-cyclical spending and targeting it in ways that will actively remain in the local economy,” he said. “I’m still not hearing anything out of Ottawa in terms of putting money in the pockets of people who will spend that money locally.”
“That money, if the government puts it into the hands of poor people, they spend it right there, [which has a] multiplier effect in the local economy. Every other government seems to be getting that. The federal government doesn’t yet seem to have grasped the necessity of doing that.”
But although he believes the Conservative government should act to stimulate the economy, Campey does not agree with the knee-jerk approach taken by the United States.
“In the States, if they can come up with $750 billion overnight to bail out the banks, why the hell can’t we come up with $75 billion to end child poverty?”
Despite the tough times ahead, Campey remains optimistic. To him the financial crisis represents both change and opportunity. “It’s a little bit of a sense of unreality, but it’s also a sense of possibility.”
“It really is a case of all bets are off.”
Photo of John Campey by Jerad Gallinger/Torontoist.