Economy

"Our human destiny is inextricably linked to the actions of all other living things. Respecting this principle is the fundamental challenge in changing the nature of business."
- Paul Hawken, The Ecology of Commerce

 

Farewell to Welfare

Greentown, Southern Ontario, 2007

Hi there ! My name is Jules Carstairs. I'm Manager of the Cavendish Neighbourhood Trust. Picture me as big - 6'3", 230 lbs, blue eyes, big sea-going beard. On my mother's side, we were all Scandinavian sea-farers. On my father's side, we're Scottish to the bone, evicted from the impoverished patch of heaven in the outer Hebrides Islands we called home when the landlords sent their men in to burn our cottages and drive us from our land in the clearances of 1873. Now that was poverty. I'm a man with a mission. But first, let me give you a wee bit of background.

For all of our lives, there's been welfare, thanks to the courage and dreams of the good Lord's social reformers in the 1930s and 1940s. We no longer have to face the cruelty and indignities of the workhouse if we fall on hard times, our wives and bairns being dragged off crying in one direction, ourselves in the other. Back in the 1890s, my father's great-great-great grandparents were forced into a workhouse in Glasgow, before migrating to a new life in Canada.

I was unemployed for two years in the 1980s. I saw the good side of welfare, in the protection it gave me against choosing between starvation, begging or crime, and the time it gave me to get involved in community development, but I also saw the bad side, in the constant feeling that I wasn't part of the community, because I didn't share in the work. For a short while I worked illegally, picking apples on a farm, with a hundred other people. After work, we rode home from the fields in the sunset, sitting high on the tractor trailers. It felt wonderful to be part of the community again.

There's no doubt about it : welfare degrades. It was only ever intended to provide short-term protection for people who fell between the safety nets of unemployment insurance and old age pensions. If the founders of welfare could come back today and see what had happened to their dream, they would be shocked. They never anticipated permanent unemployment, the way it is today.

What can we do about it ? South of the border, they've thrown hundreds of thousands of people off the welfare rolls. They took the tough approach : cut the rope, and see if they can swim. Some do, and are pleased to have had that extra push. Others drown, disappearing into that massive hole in the ocean of statistics called 'discouraged workers'. Many are obliged to accept abysmal wages and unhealthy hours, depriving their children of proper parenting and undermining their family life.

Here in Greentown, southern Ontario, our unemployment rate is twice as high as the official rate across the border in Detroit and Michigan. It's a pleasant town, with a typically mixed economy. There are the people with the professional and high-tech jobs, who live in lovely houses in the leafy suburbs. There are the blue-collar workers, who keep the factories going. There are the poor, who struggle along in service jobs. And there is the underclass, the ones who have no permanent jobs, who live in the twilight zones of welfare and government schemes. Some of them have no homes at all.

Each time the economy booms, the unemployment rate falls, but with each recession it leaps ahead again, always ending up higher than it was before. How could we end the cruelty and inhumanity of this human denial ? How could a society tolerate the pain and waste of so many people living in poverty, without work ? These were the questions a group of us asked ourselves in 2001. If welfare was the answer for the 1930s, what was the answer for the 2000s ?

We had three lights to guide us. The first was our belief that the poor were not poor because they were lazy. They were poor because the system had kicked them out, and forced them to adapt to idleness. Underneath the apparent despair and lack of motivation they could be just as skilled, energetic and creative as any early-rising, self-employed Volvo-owner.

Our second light shone from the city of Halifax, in Nova Scotia, where for a while, by a stroke of municipal intelligence, the city had control over 25% of the welfare budget, which is normally controlled by the provinces. For ten years in the 1980s, a non-profit society called the Human Resources Development Association (HRDA) worked alongside the City, using part of the welfare budget to create jobs for the unemployed, on the understanding that they would save the city the same amount of money (or more) in welfare payments. Using the tools of community economic development, they started 14 businesses. Four failed, four succeeded and were sold to their employees, and six remained with the HRDA, producing a surplus which was used to start other ventures. More than 150 people worked for HRDA businesses, and a cost-benefit analysis found that for every $1 invested in business start-ups, $2 has been returned to the public purse. Not even Wall Street does that well.

Our third light came from Mondragon, a small town tucked away in the mountainous Basque country of northern Spain. Following the initiative of a community-minded Jesuit priest in the 1950s, an entire network of co-operative enterprises had been created in Mondragon, with 26,000 people working in 100 co-operatives they had launched themselves, using money saved through their credit union, the Caja Laboral. They had their own business start-up division, their own training college, and their own welfare system, which they rarely ever used. If a co-op had to close, they re-employed its workers through education, retraining or preparation for a new co-operative, rather than have them lose their self-esteem living on welfare.

If the Nova Scotians and the Basques could take this kind of initiative, why couldn't we ? So we got together with some progressive members of the Ontario government and drafted the legislation which allows any municipality to set up one or more non-profit Community Trusts committed to the goals of community economic development, and apply for a license to take over the welfare payments within their boundaries. We wanted the employment insurance payments too, but that's a federal jurisdiction, and they have yet to agree to our proposal.

In our pre-ambles, we quoted from the book Re-Inventing Government, where the authors argue that the task of government is to steer the boat, not row it. Delivering welfare payments and creating jobs was rowing, not steering - so why not hand the job over to local communities, to see if they could do a better job ? The idea of communities becoming more self-sufficient and entrepreneurial appealed to the Ontario government, and the bill was duly passed.

10,000 people was a good size for a Community Trust, we thought - small enough for people have names and faces, and not be treated in a cold, impersonal manner. A city like Greentown, with 500,000 people, might have 50 such Community Trusts, one for each neighbourhood. Our intention was that the Community Trusts would use the welfare funds to organize training and community economic development for their communities. Combined with initiatives to encourage worksharing and speed up the environmental revolution, our goal was to eliminate all unemployment lasting longer than 6 months, and consign welfare to the history books, just as an earlier generation did for the workhouse.

So how's it going ? I'll let my diary speak for itself.

A Week in the Diary of the Cavendish Neighbourhood Trust Manager

Monday, April 9th, 2007

There was a fresh coating of snow on the ground at 7am, when I shook off my boots and settled in to observe the first of this morning's PEP Groups. PEP stands for Personal Encouragement Plans. We have 40 PEP groups, each of which meets weekly, so the Cavendish Centre is on the go from morning till night.

It has been four years since the Neighbourhood Trust took over the responsibility for managing and distributing welfare in Cavendish. We have 800 people on welfare, out of a population of 12,000, and the PEP groups are at the heart of the Trust's work. They invite their members to help each other, to work with their own ideas and energy, instead of us trying to squeeze them into ill-fitting jobs just to get them off the welfare rolls. There's no more 'customers' or 'clients', or talking to computers. They're members, and they even get to vote for half of the Trust's Board of Directors.

The PEP groups are self-managed, with assistance from an encouragement counsellor. They are encouraged to become peer support groups, in which the members commit to stay for a 6 month stretch, even if they get a job. It's all about creating community, and interdependence. As an extra incentive to stay together, we use a trick that we borrowed from Egypt. Each month, the members put 5% of their welfare cheques into a common pool, and then give it to two of their members to spend on something related to training, career development or business development. We use an encouragement road map, which enables people to identify their natural skills, track down any habits of self-sabotage habits that they may have developed, and set a course for the future.

It has been amazing what has showed up, from the ex-alcoholic who made it possible for his fellow members to talk about their feelings, to the graduate who realized that she had a natural skill as a carpenter, and preferred working with her hands to the management jobs her parents had pushed her into. And there was the terminally shy man in his fifties who had been out of work for fifteen years, who turned out to have a real talent with rabbits. When his group asked him to bring his bunnies in one morning, he turned in the show of his life. He's off welfare now, working with three other men in a rabbit-meat co-operative we helped them set up. He just needed someone to draw him out, and help him put the pieces together.

Monday night.

The weekly board meeting. The main thing on the agenda was a discussion about purchasing an old boathouse for conversion into a business incubator. I'd like to see us set it up as a community-owned business, with local people purchasing shares to cover the downpayment, and then getting a mortgage from the credit union. That way, people will understand that the building is theirs, and no-one else's. The Board was quite supportive, and asked me to do some homework on the idea.

Tuesday

Big day ! The Mayor of Greentown came down to open our new Youth Enterprise Centre. Some of the 25 members are using it as a shared office base, some as a source of support for the home-based businesses they're starting, and some for production, like 20-year old Kirsten who is starting a clothing business using recycled and hemp materials. Our network of retired business mentors have done themselves proud, the way they've pulled this one off.

Wednesday

Spent the morning downtown with the Greentown Training Network, thrashing out problems with the new database we've set up which links all the schools, colleges and employers in the region, giving people up-to-date information about courses and training opportunities. We need more employers to list their training needs, so that the colleges can plan accordingly. It all seems so obvious. Why has it taken us so long to get it together ?

First Wednesday of the month is payday, when we pay everyone's community service checks into the credit union. It used to be a real problem, before they offered to provide subsidized banking services to our members. There was always someone who would lose his or her cheque, forcing us to become bureaucratic. Under the new system, there's an ATM where you can register any earnings you've made, whether in dollars or in Oaks (our community currency), and draw out the cash you need. To encourage people to exercise their initiative by earning extra cash, we've brought in a rule which says that your cheque will be reduced by half of any earnings from casual work or self-employment. The rest goes into a Personal Encouragement Fund, and must be spent on tools, equipment or training. It's an interesting system, since you have first to persuade your PEP group that it's going to be a worthwhile expenditure. It's a 'use it or lose it' system, which acts as an incentive.

Thursday

The Self-Employment Group met today, for their weekly training session. We use a person-centred approach to training, since it works so well. The track record has been excellent. During our first five years, we have trained 195 people, who have started 165 businesses, employinh 287 people, with an 97% rate of return on the loans administered through the peer-group loan circles the credit union set up. None of those people would have qualified for a loan if they had gone to a bank in the normal way.

The Cavendish Co-Business Club had their monthly luncheon meeting today. They always have great grub, so I try not to miss out. The Club started when some local business people got together to ask themselves how they could help each other. After a while, they started sharing their problems over such things as security, book-keeping and staff training. They formed a club, and now they help each other with things like marketing, technology development and exporting, all of which helps to keep jobs in the community. Today they were discussing ways in which they could expand their use of the Oaks, the community currency which was set up ten years ago, which is one of the methods we use we to encourage local trading and resilience.

Friday

My day to be out of the office, and into the community ! I started by checking in on Project Enterprise at the local high school, where the kids run their own co-operative mini-businesses. They start in the fall by coming up with an idea, then they do their product development and market analysis, and go around among their friends and families raising the capital - one group needed $100 to buy the wood to make birdhouses, for example. Then they run their businesses, going through all the normal stages, until in April they go into voluntary liquidation and share out any profits among their shareholders. It has been tough on some of the teachers, because the learning is all done by trial and error, not in the old blackboard manner, but the response among the kids has been fantastic. As soon as they feel they are in charge, their energy comes out. We're getting a whole new generation of young people leaving school who know what it feels like to run a business. We're already seen some who are going on to run their own businesses when they leave school.

I had lunch with our local neighbourhood councillor on the Greentown City Council, and then spent the afternoon with one of the Kitchen Table Workshops. This is a fairly unique formula that we hit on as a way to get ordinary people thinking about ideas for businesses or community initiatives. They meet in small groups of 7-8 people, in people's homes. Some of the groups are very suburban and la-di-da, but I love it when the Type-A women start rolling up their sleeves. Today, the group was discussing an idea for creating community bonds to raise local venture capital, based on a successful program that ran in Saskatchewan in the 1980s. There was plenty of money in Greentown, they argued : it just needed a formula to persuade people put it to work financing businesses run by local people.

Saturday

My day to be at home with my wife and kids, and play in the over-30s soccer league. The centre was still quite busy, however, as the Inventors' Circle met in the morning. This is a Greentown-wide initiative, which came together as a result of some research we did to find everyone in Greentown who had ever filed a patent. We came up with five names, and discovered that only one of them had actually turned his patent into a business. The circle works on the basis of confidentiality and shared trust, supported by a professor from the university's business faculty, who has made it his pet project. Over the past four years, the group has grown to 19 people, and they've filed for 23 patents. Thanks to a link we've set up with the Greentown College engineering departments, their ideas have led to four businesses being established, employing 10 people.

Sunday

Finally, the world pauses ! I took the kids for a hike in the woods this afternoon, to enjoy the first signs of spring. There's something about being out in nature which makes me come over all philosophical. Today, I was thinking about how our community is changing. We're down to 8% unemployment, two points lower it was five years ago, and there's a feeling on the streets that we're going somewhere. Our goal is to eliminate unemployment entirely by 2020. If we can get the break we need on worksharing, it's my belief that we can do it. I wonder what it would feel like to live in a community where there was no unemployment, no welfare, and no homelessness.

How the Worksharing Wheel Started Squeaking

Greentown, October, 2009

I can still remember the day when José Martinez came storming into my office at 9am on a Monday morning, requesting that we endorse the pickets they were planning to set up the outside the town's largest employers, wherever they practiced overtime. The Neighbourhood Trust had been established for seven years, and the last thing we wanted was to be caught in the middle of a labour dispute, pitting worker against worker. Not with the leader of the Public Service Union Local #221 and the President of the Greentown Chamber of Commerce both on our board of directors.

I have no-one to blame but myself. We had committed ourselves to the elimination of unemployment, and when a group of unemployed people came into our offices and started talking about worksharing, I encouraged them to get organized. I had in mind some kind of support group, but they went on to establish Willing Workers of the World (W3) as a union for the unemployed and under-employed, successfully placing worksharing on the public agenda.

José was a refugee from the political oppression in Guatemala, in the 1980s. He had trained as an electrical technician, married a Canadian woman and found work with Tyex, the big electronics firm. On one level, he seemed all set to join the middle class, but underneath, he was still a revolutionary, dreaming of a world where there would be justice, equality and brotherhood/sisterhood for all. Don't you hate it, when they want you to be all brotherly, and you don't feel like it ? That's what happens when you put an emotional Latin in a room with a sanguine Scot.

When Tyex was taken over by General Electronics, the new boss moved quickly to install robotic assembly units, and six months later, José and 30 of his co-workers were given their pink slips. The managers received pay-rises, and the remaining workers were put on overtime to cope with the increased demand.

José was stunned - but rather than despair, he organized. He called a public meeting, and within a week he had enrolled 200 new members in Willing Workers of the World. We supported them all the way, even setting up the retreat which led to the Worksharing Charter which spelt out the demands that underpinned the worksharing revolution.

Up until then, the unemployed had always been a very difficult group to organize. The mainstream unions responded poorly to the idea; most unemployed people tended to privatize their feelings, rather than channel them into action; and the ones with leadership potential were generally the first to find jobs. The poverty, pain and frustration were all there, but it rarely showed in public : the worksharing wheel never squeaked. Why this changed, I don't know. Maybe it was the influence of the new millennium, and the wave of determination that was washing away the cynicism of the 20th century.

José wasn't asking for our approval to launch the pickets - he was simply giving us a chance to support them. The Board held an emergency meeting that evening, but split 5 : 5, half supporting him, and half applauding the Worksharing Charter but refusing to endorse the pickets.

By 8am the next morning the pickets were up, and W3's members were handing out leaflets inviting the workers to join them on the picket lines to protest their employers' use of overtime, rather than reduce the length of the working week and hire more workers. W3's energy was high, but the media's response was pathetic. So after a week of biting their tongues, W3's leaders brought in trained activists to advise them. Borrowing a leaf from Greenpeace's book, they climbed onto the roofs of the companies they were picketing and swung down by ropes in front of their office windows. Suddenly, the issue was on television all across the country, and on the front pages everywhere. The trickle of people joining W3 turned into a storm, and pickets were set up outside another twenty companies, demanding that they sign the Worksharing Charter and adopt the 32 hour week. The protest spread to nearby cities, and within a month, W3's membership had leapt to 5,000, with new chapters being established every day.

The Worksharing Charter's demands were eminently reasonable - a 32-hour week for everyone, a 5% reduction in wages for those earning over $35,000, and the elimination of payroll taxes, financed by the reduction in welfare and employment insurance payments. They also wanted the rights of part-time workers to be guaranteed under the Constitution.

It was the 5% pay reduction which the labour unions found so hard to swallow. Survey after survey showed widespread public support : 78% of respondents preferred more free time over further career advancement; the average worker was willing to give up 4.7% of his or her earnings in return for more free time; 66% of the people who worked long hours wanted to work less. W3's survey showed that 65% of the general public supported worksharing and the 4-day week, but the labour movement wouldn't budge.

Historically, from 1800 to 1950, the working week fell by 3 hours every decade. After 1960, however, it got stuck at 40 hours, and instead of falling further, unemployment started rising by 2% per decade, from 2% in the 1950s to 12% in the first years of the 21st century. It was obvious something had to give - it was just a matter of when.

The 'give' came quite suddenly, when W3 started organizing mass rallies all over Ontario to pressure the Ontario government into bringing in worksharing legislation. A private member's bill was on the order tables, signed by 55 members of the legislature, but the government was still refusing to budge, quoting employers' concerns about rising costs. Opinion polls showed that the public supported the 4-day week, and the evidence from France and Germany, which had been on the 4-day week for several years, showed that the employers' concerns were overblown. Friday December 4th was chosen for a huge rally in Toronto and ordinary people all over Ontario were asked to write, call, fax and email their politicians.

When the labour movement's leaders saw the extent of W3's support, they began to realize that many of W3's members were ex-union members who had felt abandoned and betrayed by the labour movement when they lost their jobs. At a crucial meeting, they switched their position, and came out in support of W3's demands, declaring Friday December 4th a Worksharing Solidarity Day, inviting their members to take the day off and join W3 in its rally on the Legislative Assembly. We closed the Neighbourhood Trust's office for the day, and rented 10 coaches to take people to Toronto for the rally. It was amazing. We sang on the bus, and when we got there, we joined the crowds and sang all the way up University Avenue to Queen's Park. There must have been almost 100,000 of us, led by a host of musicians who had come out to give their support.

The government agreed to talks, and the 4-day week was finally approved in June 2010, starting in January 2011. It was a victory for common sense, for working families and the unemployed, and for life in general.

 

About the author

Guy Dauncey is an author, organizer and sustainable communities consultant who specializes in developing a positive vision of an environmentally sustainable future, and translating that vision into action. He is the author of Stormy Weather : 101 Solutions to Global Climate Change (New Society Publishers, July 2001), and ‘A Sustainable Energy Plan for the US’ (Earth Island Journal, August 2003). He is also the publisher of EcoNews (a monthly newsletter), co-founder of the Victoria Car-Share Cooperative, and a consultant in ecovillage and green building development. He lives in Victoria, on the west coast of Canada.

His website is www.earthfuture.com.