Depression-era unemployment levels among young men in Alberta; 2,600 autoworkers out of work at the GM plant in Oshawa; hundreds of journalists across the country unemployed as the big machines at TorStar, Postmedia, Bell Media, and CBC cut jobs; 420 jobs lost at a smelter in New Brunswick.
Unless the losses are in their community, politicians and other policy-makers don’t get too worried about news like this. They point to the natural dynamism of the labour market, and to Canada’s employment picture, which is quite strong on the whole. They point to our limited but relatively strong supports for the unemployed when compared to countries around the world.
But national employment statistics are just one part of a larger picture. Income is not the only thing that disappears when a job is lost. A job is an identity. It’s a community. It brings satisfaction, happiness, a healthy routine and meaning. Work is about more than money, a point that the think tank Cardus makes with its latest paper, a study of the economic, health, and sociological effects of employment and unemployment. The decrease in happiness from moving from employment to unemployment has also been shown to be about twice as large as the decrease in becoming separated or being widowed, even when controlling for the income loss associated with not working.
Unemployment takes a toll on physical and mental health, the stability of families, the educational and economic success of children, communities and the public as a whole.
So, it’s about time we reform labour and economic policies at all levels to recognize that work is about much more than wages or a paycheque. Much more needs to be done for those who are unable to acquire work for whatever reason – a disability, for instance, or because they no longer have the skills needed in a changing labour market. Why? Because not working has hidden and intangible costs for people. Unemployment takes a toll on physical and mental health, the stability of families, the educational and economic success of children, communities and the public as a whole.
Losing a job can be like a death sentence. In a Swedish study that looked at what happened after businesses shut down, the risk of dying was shown to have risen 44 percent for men in the first four years after a job loss. Men appeared to be more affected than women by job losses in the long run, but both men and women were approximately 200 percent more likely to die by suicide in the first two years after losing their jobs than if they remained employed.
Other negative outcomes include increased use of alcohol and tobacco, substance abuse (including opioids), a greater number of reported medical conditions, and increased hospitalization, use of medical services, and use of disability benefits.
One representative study by American scholars Sarah Ward and Laura King shows that those who are working have “lower odds of depression and anxiety, as well as higher life satisfaction and happiness” than those who are unemployed, and that it isn’t just the paycheque that accounts for it. And when a job is lost, it is more than the lost wage that hurts mental health, they say. Job losses are closely connected to self-harm and suicide.
The effects extend to spouses and children as well. Unemployment is associated with increased divorce, domestic abuse and child abuse. The effects of job loss on family stability are akin to an earthquake: they’re shattering and can have long-lasting, intergenerational effects on children’s educational, social and economic prospects. One study authored by Ann Huff Stevens and Jessamyn Schaller showed that children whose parents lost a job were 15 percent more likely to not advance to the next grade, and that this appears to be causally linked to the job loss. The aftershocks of this earthquake also extend into the community via declines in civic participation and increased anti-social behaviour and criminal activity.
The reverse also matters.
The positive side of work is truly impressive. It has significant cognitive, psychological and physical benefits, sending beneficial ripples out into marriages, families and communities. Working people even tend to be bigger volunteers. As researchers Morley Gunderson and Rafael Gomez note “volunteering is not diminished by the compression of time related to long hours of work or by the fact that the spouse is on the job market or back to school. Busy families seem to do more of everything, including volunteering.” But work with inconsistent hours and unpredictable schedules does make it harder to volunteer, the study shows.
It’s notable that making money isn’t the only reason people work. Some lottery winners continue to work even after being showered with millions of dollars. The spouses of lottery winners continue to work more than the winners themselves. Perhaps one reason is the intrinsic value of work, with its networks and other non-monetary aspects.
People are often willing to accept lower wages to work at socially oriented non-profit organizations. Their motivation connects to a broader social purpose that they value. In 2002, one survey of American non-profit workers found that 61 percent placed the chance to make a difference higher than pay.
A similar phenomenon shows up among profit-making corporations with a social-responsibility agenda. Recent studies suggest employees in such corporations will often work for lower pay, and that the degree to which workers experience meaning at work might influence wage levels in a given sector. Workers value purpose and meaningfulness, and they are willing to give up pay for such non-financial benefits.
So, what might change if we were to take full account of the hidden non-financial costs of unemployment and the benefits that accompany work while still appreciating that money matters? How could they be better reflected in our policies?
In Canadian public policy, we have a longstanding, cross-partisan consensus on the importance of helping people get work, which is a breath of fresh air and should be a source of Canadian pride in this age of increasing political polarization. The Canada Workers Benefit (formerly the Working Income Tax Benefit) incentivizes work by providing a benefit to low-income earners in the form of a percentage on top of money earned in the labour market. As Rob Gillezeau and Sean Speer noted in these pages a few years back, it’s a benefit that functions as “a social welfare program with a strong pro-work bias.” It provides recipients not just with cash, but an opportunity to gain the ancillary, non-financial benefits that accompany regular work.
But there are other policy interventions that create obstacles to work for some people. Occupational licencing, for instance, raises the bar for entrance into certain professions (via training requirements and the attaining of credentials) and lowers the possibility of immigrants holding a credential-requiring job. Other licencing constraints can also work against newcomers. Minimum-wage policy can also prevent particular people from getting a job. Someone with Down syndrome, for instance, might be able to contribute value by cleaning tables in a coffee shop, but the owner isn’t likely to hire that person if he doesn’t think the task is worth minimum wage. The value that person could bring to the company is lost, and so is the financial and non-financial value to that person, who remains unemployed. Given the importance of work, could a public subsidy for a portion of that minimum wage allow more disabled individuals to enjoy the dignity of work? There are obvious challenges to any policy on this front – ensuring that such subsidies don’t drive down overall wages, for instance – but, given the benefits of work, taking on those challenges seems worthwhile.
The way in which social programs (disability benefits, for instance) interact with employment does not always account for the negative social effects of unemployment, and can end up placing barriers in the path of those who might otherwise be able to access the benefits of work. For instance, someone on disability benefits who wants to work would face the loss of “income-in-kind,” such as supplementary health and dental benefits, something that is often not adequately offset by income from employment, as documented in a study by the Caledon Institute of Social Policy in Ottawa. How might we shape policy to ensure that the contributions of such individuals aren’t lost entirely?
Government routinely measures the impact of policies on job creation and loss, but important nuance could be added by measures to ascertain policies’ broader costs and benefits – the ones hidden from simple economic calculations yet present in the data related to the non-financial costs and benefits.
Perhaps the biggest change needed is the introduction of regular auditing of social policy to account for all the costs of unemployment as well as the benefits of employment. Government routinely measures the impact of policies on job creation and loss, but important nuance could be added by measures to ascertain policies’ broader costs and benefits – the ones hidden from simple economic calculations yet present in the data related to the non-financial costs and benefits. And broader national policies on, for example, universal basic income, should do the same. The evidence on universal basic income’s effects on employment isn’t conclusive either way. But if, for instance, it were to lead to significant numbers of people no longer working over the long run, there could be hidden costs (the health effects of unemployment that seem to be independent of income) not accounted for by typical policy measurement tools.
Governments should not always favour employment at all costs, however. Sometimes, the right policy necessarily leads to significant unemployment. The federal government’s ban on asbestos in 2018 is one such case. Workers in the asbestos trade are now out of work. But given the deadliness of the product, it seems worth it. The ban on tankers off British Columbia’s coast, or policies restricting pipelines, blamed by many for high unemployment in Alberta, might or might not meet that test. Regardless, those decisions need to be made with a clear eye and with a view to balancing policy priorities.
Canada has a long tradition of multi-party support for pro-work policies, and is a global leader in public policy built on understanding the importance of work for Canadians, their families and our country. But there is still room for Canada to improve. Understanding that work is about much more than money, and shaping policies that account for the full suite of benefits that accompany work and the costs that accompany its absence could contribute to a wide variety of policies – disability programs, minimum wage, occupational licencing, even policies related to incarceration and restorative justice – that would bring those benefits to more Canadians.
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