The new OECD “Society at a glance” (paywall) report came out today. It’s part of a series of policy papers assessing the social implications of the economic crisis and its aftermath, and offers a list of policy recommendations on a yearly basis.
The picture is never good.
The financial upheaval of 2007-08 created not just an economic and fiscal crisis but also a social crisis. Countries that experienced the deepest and longest downturns are seeing profound knock-on effects on people’s job prospects, incomes and living arrangements. Some 48 million people in OECD countries are looking for a job – 15 million more than in September 2007 – and millions more are in financial distress. The numbers living in households without any income from work have doubled in Greece, Ireland and Spain. Low-income groups have been hit hardest as have young people and families with children.
The financial crash was one of the most important events that occurred within my lifetime, but still some people don’t seem to get how far reaching its impacts have been. The American Republican Party seemed to mostly bury its collective head in the sand, perfectly willing to sacrifice the welfare of poor people for the sake of a few narrow political goals.
The paper is filled with interesting data and charts, but the are some other gems here. Food security:
While federal food assistance programmes in the United States now support roughly twice as many households as in 2007, the number with inadequate access to food at some time in the year has nonetheless climbed from 13 million (11% of all households) in 2007 to 17.6 million (15%) in 2012. Rates of food insecurity were substantially higher among households with children (20% in 2012) and lone-parent families were particularly affected (35%). Forty-one percent of all food-insecure households received no support through federal food assistance programmes.
As someone who grew up in a food insecure household, I take this quite seriously. Right wingers who have a stocked fridge don’t get what it’s like to have an empty fridge. It’s easy to say that SNAP benefits foster “a culture of dependence” with a bulging stomach. Perhaps they don’t know that in food insecure households, the last people to eat are the kids. Of course, they don’t care.
To “crisis-proof” social policies and to maintain effective support throughout the economic cycle, governments must look beyond the recent downturn. First, they need to find ways to build up savings during upswings to ensure they can meet rising costs during downturns. On the spending side, they should link support more to labour market conditions – for example, by credibly reducing benefit spending during the recovery, and by shifting resources from benefits to active labour market policies. On the revenue side, they should work to broaden tax bases, reduce their reliance on labour taxes and adjust tax systems to account for rising income inequality. Second, governments need to continue the structural reforms of social protection systems begun before the crisis. Indeed, the crisis has accelerated the need for these. In the area of pensions, for example, some future retirees risk greater income insecurity as a result of long periods of joblessness during working age. In health care, structural measures that strip out unnecessary services and score efficiency gains are preferable to untargeted cuts that limit health care access for the most vulnerable.
If GWB 1 is any indication, the Republican Party dislikes savings and when they get a surplus they seem to squander it. There’s no reason to believe that the future will be any better. I’m thinking about the dichotomy of labor taxation versus capital taxation. Republicans have made it quite clear that they dislike capital taxation and prefer labor taxation. But what this does is create a gated community of capital holders, who exert vast political control without having to take responsibility for, well, much at all.
While I do advocate for a national sales tax to pay for transfers to create an income floor for American wage earners, we also need to tax the hell out of inheritances. There’s no reason that Bill Gates’ son (does he have one?) deserves a leg up any higher than he’s already got it. If America wants to foster innovation, it has to start by bolstering it’s labor classes. Forcing them to go without meals and scramble around to meet basic health needs only creates a dog eat dog culture of basic survival, and leaves little room for good ideas.
Alright, happy zombie day.