Families need ‘New Deal’

TheStarPhoenix.com  – life
October 19, 2011.   By Betty Ann Adam, The StarPhoenix

Canada needs a “New Deal for Families” to solve the enormous social and economic upheaval caused by soaring housing costs, creators of a study released Tuesday at the University of Saskatchewan say.

The generation raising children today has less money and time than baby boomers, despite a doubling in size of the Canadian economy since 1976, said Paul Kershaw, a family policy expert from the University of British Columbia.

“Young families are squeezed for time at home, they’re squeezed for income because of the cost of housing and they are squeezed for services like child care that would balance earning a living and having time for their families,” Kershaw said.

In 1976, the average house in Saskatchewan cost slightly more than twice the average family’s household annual income.

The average house was $145,000 in today’s dollars in 1976 but now, it is almost $245,000, which is four times today’s average family income, said Nazeem Muhajarine, a Saskatchewan researcher whose team worked with Kershaw and his colleagues on the report.

The change represents a 68 per cent increase in the cost of a house during a period when the average household income went up only six per cent after adjusting for inflation, Muhajarine said.

The current family experience is different from that of the boomer generation because household incomes today are no higher than they were then, but it now takes two people to earn the same total amount, Kershaw said.

Parents have less time at home with their kids and there’s a lack of the services they need while they’re working.

There are only enough regulated child-care spaces for one in five children, leaving parents to place children in private care, which may not provide the same stimulating environments.

The lack of time for children is showing up in a growing number of kindergarten pupils who are not ready for school. One in three are not ready in areas of social, emotional and physical health, or language and communications skills, Muhajarine said.

The solution is a “New Deal for Families,” built on three major public policy changes, Kershaw argues.

The New Deal includes extending benefits for new parents to 18 months from 12 for all single and dual earner households, including self-employed and unemployed parents, and a minimum benefit should be provided that would eliminate poverty for families with children under 18 months, he said.

The New Deal proposes providing $10-per-day child care and promotes flex-time to help employees combine work and family, making them more productive while at work. Incentives should be available to employers to limit work weeks to 35 hours.

This would require policies that make it less expensive for employers to use people up to 35 hours per week on average and more expensive to use people after that, and would involve spreading the same amount of work over a greater number of people, he said.

The changes would require tinkering with overtime premiums, employment insurance and CPP premiums, he said.

In Saskatchewan, the net cost of the proposals to federal and provincial governments would be $507 million in the first full year of implementation, and would decline thereafter.

The $22-billion cost of the programs Canada-wide could come from re-allocating existing government expenditures, raising taxes or cutting tax loopholes, asking the business community to step up and pay higher wages or parental leave benefits, or from the type of deficit financing the baby-boomer generation often relied upon, Kershaw said.

The net cost to governments after the first full year would be considerably lower, at $16.3 billion, the report states.

“The net cost is lower because governments recoup tax revenue both from the labour supply gains that result from the New Deal and from the pay equity wages earned by child care workers,” the report says.

It would also save government spending on health care, child welfare and anti-poverty programs.

The status quo is costing the Canadian business community $4 billion per year, according to estimates reached by researchers in collaboration with British Columbia chartered accountants.

Employees with preschool-age children have work-life conflict, leading to more absenteeism; they’re less likely to stay on the job after having a new baby; and they use more health insurance benefits, which increases premiums for employers, Kershaw said.

“Couldn’t we spend that $4 billion differently?” he said.

Kershaw believes the plan would control health-care expenditures, control crime, reduce education spending and prepare a labour force that will be more job-ready when they graduate because they’re more school-ready at the outset.

Baby boomers need to join with younger Canadians to pressure governments to create policies that will address the squeeze, Kershaw said.

The researchers hope the “squeeze generation” and the New Deal proposal will become an election issue in Saskatchewan.

The study was conducted with support from the Healthy Children research team at the Saskatchewan Population Health and Evaluation Research Unit at the universities of Saskatchewan and Regina, through their early years network, kidSKan.

The report is available online at blogs.ubc.ca/newdealforfamilies.

< http://www.thestarphoenix.com/life/Families+need+Deal/5571039/story.html >

1 Comment

  1. Wow this seems like a great plan. The problem with this plan is that child care in Ontario needs to be revamped from top down before implementing this $10 a day care service. Child care has been an increasing issue in Ontario in terms of quality (curriculum, staffing, programming, etc…), educator salary and leadership within organizations not being knowledgeable enough (meaning kids leading kids) to ensure quality is being implemented in their programs. Also before implementing such, the government better look into the money that the Liberals are putting in place for child care and ELK programs in schools. The Liberal spending spree, if you will, is good spending but it seems the chariot was placed before the horse.

    Second I am all for the 35 hour work week as opposed to the 40 + hours people is required to put into their employment. By adding this dividend into practice could potentially mean, that if it is regulated accordingly, more of a stable family dynamics where there may be less separations, divorces and more family vacations and outings. It can also potentially become a negative issue where by spending more time together; have family exposed to more domestic disturbances, separations and divorces, etc…

    Lastly, the new mom and dad benefit is a great idea. We currently have the 18 month leave but without pay. So by adding pay to the extended parental leave, children and families will have time to bond an extra 6 months not to mention, it would reduce the amount of spaces needed in childcare for infants. Infant care is very expensive in day cares and many day cares I have been associated with over the past 6 years in my current employment indicate a loss or barely breaking even when they run the infant program.

    Overall this plan could work very well in favour of young families but not so well in an already suffering service of child care. Additionally, funding can potentially be an issue therefore if I had the power or authority to recommend a strategy on how to approach this plan, I would recommend to take the time to research, a year (or more) of well developed planning followed by the implementation.

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