Shift Happens

This op-ed by Armine Yalnizyan was originally published in the Toronto Star on Monday, March 11, 2019.

Have you noticed? Power dynamics are being shaken up everywhere.

What started as a rejection of business-as-usual politics with Trump and Brexit has morphed into a new energy in the corridors of power. The entry of Alexandria Ocasio-Cortez in the U.S. and the exit of Jody Wilson-Raybould and Jane Philpott from Trudeau’s cabinet are potent symbols of how the status quo is being challenged. But moving from rhetorical to substantive change will not be easy.

The gathering power reset not only needs champions. It needs a new vision.

Global institutions like the International Monetary Fund, the World Bank, and the OECD have lately envisioned “inclusive growth.” Ironically, these same organizations pushed deregulation, privatization, liberalized capital flows and deficit-reducing austerity for decades to spur growth — measures that excluded billions of people. The global financial crisis of 2008 made clear that can’t continue indefinitely.

What makes growth “inclusive?” Consider the International Labour Organization’s report on the future of work, Work for a Brighter Future. It recommended investments in lifelong learning; strengthening institutions that protect social rights and social dialogue; and intentionally creating decent work.

Wholesome, but woo-woo? Well, a century ago who could have predicted how our lives would be transformed by technology, democratic institutions and collective action? Play through the strategy and see how differently people’s lives, communities, whole economies would develop if these were widely practiced strategies for growth.

What if all children were learning-ready when they entered public school? What if no one faced barriers to training and skills upgrading, whether in a job or in between jobs? Expanding everyone’s potential through lifelong learning is a sure source of growth that’s inclusive.

How would businesses and supply chains change if companies whose practices killed or injured workers, or stole wages and pensions, were charged and convicted like other murderers or thieves? Rigorous application of the rule of law changes behaviours and supports broadly-shared gains.

Inclusive growth could result from simply doing the work that needs doing. Caring for the young, the ill and the aging; building and fixing public infrastructure; and hastening the pivot towards sustainable energy and production are three easy pieces. Relying mainly on markets to meet these needs guarantees many needs won’t be met. The result? Economic growth falls short of its potential.

Doable strategies, all. Yet the path forward faces plenty of roadblocks.

Sure, public and private investments are the twin engines that propel shared prosperity. But where will the money come from for the public role? Labour is taxed more heavily than capital, but labour’s share of GDP is falling in most places, and within labour’s share inequality is rising. Meanwhile, as fewer companies dominate more markets, globe-straddling corporations are becoming larger and more difficult to regulate and tax. In a period that begs for more international coordination, the backlash against globalization and rise of nationalism may hobble rather than strengthen protections of the weak against the strong.

The antidote — people more involved in the decisions that affect them, more diversity at the table — has challenges too. Social dialogue is the secret sauce of better, more durable decision-making; yet tripartite processes (labour, business, government) have limits.

Business interests are consistent and well-organized. Newly elected governments may be determined to undo the work of their predecessors. Labour does not speak with one voice, and the most exploited workers are rarely represented by a union or covered by basic social protections. In local or global processes, shared problem-solving is often dominated by corporate interests, bringing us back to the beginning: popular rejection of business-as-usual.