A Complicated Problem |
Should we focus on jobs creation or workforce optimization? |
How to deal with a growing population of people with disabilities? |
Is Social Assistance a trap for some people? |
How do we pay for modern accessibility standards? |
I'm not in tune with provincial arithmetic, nor do I have access to all the numbers. But it strikes me there is a sensible and thrifty solution that serves Nova Scotians and not Bay Street:
In a nutshell | |
For every 1000 people with disabilities moving from Social Assistance to Minimum Wage or better | |
Savings in Social Assistance | $9,840,000 |
New tax revenue | $1,452,000 |
Worker Incentives | -$2,000,000 |
Accessibility Incentives | -$5,000,000 |
Net annual savings | $4,292,000 |
The Details
Disability keeps a lot of Nova Scotians from working. What's seldom recognized is the fact that many are prevented from working by arbitrary barriers and rules. Examples abound - every retail business with steps and no ramp represents a place no wheelchair user can work or shop. Some businesses that want to be more accessible run afoul of counterproductive regulations. Up until 2013, people with some disabilities couldn't even get in to MLA constituency offices, let alone work. We should find a way to remove barriers to employment without causing hardship to employers. We need to get creative.
Although the following math works for anyone on social assistance, it is especially appropriate for people with disabilities, who are eagerly awaiting new legislation, but fear it will be derailed by the perception of cost. It can pay for itself and then some.
Igate and RBC are recent out-of-province beneficiaries of taxpayer largesse. In exchange for committing to bringing jobs to Nova Scotia, the income tax revenue from those jobs is more or less refunded to the company. Details below. The notion that RBC (2014 profit $9 billion) needs the people of Nova Scotia to cough up $22 million over 10 years reflects poorly on RBC's corporate citizenship.
There is some truth that the new employees have a multiplier effect due to spending, but that's a subject of much speculation. Any multiplier effect is considerably diminished by the fact that rebates will end up on Bay Street Toronto, not Bay Street Antigonish.
Last week I wrote about the RBC deal, which nets the taxpayers of Nova Scotia $1,020,000 over ten years. I pointed out that Laurel Broten, CEO of NSBI, will earn $2.1 million over those same 10 years, leaving taxpayers $1,080,000 in the hole.
An alternative: saving more by spending less
The present NSBI strategy is just to give in to corporate demands, and the error is compounded by the neglect of opportunities to save real money by spending less. This doesn't have to be Greek-style austerity, just common sense. Moving people from social assistance to work is an excellent investment. At the same time, making Nova Scotia businesses accessible gives them a greater selection of customers and employees. We should support our own entrepreneurs, not ones in New Jersey.
The Department of Community services budgets $387 million for Employment Support and Income Assistance. How many people are helped and at what level seems to be an Official Secret, but a rough guess is that a typical recipient is eligible for these monthly amounts:
An alternative: saving more by spending less
The present NSBI strategy is just to give in to corporate demands, and the error is compounded by the neglect of opportunities to save real money by spending less. This doesn't have to be Greek-style austerity, just common sense. Moving people from social assistance to work is an excellent investment. At the same time, making Nova Scotia businesses accessible gives them a greater selection of customers and employees. We should support our own entrepreneurs, not ones in New Jersey.
The Department of Community services budgets $387 million for Employment Support and Income Assistance. How many people are helped and at what level seems to be an Official Secret, but a rough guess is that a typical recipient is eligible for these monthly amounts:
Personal (includes food) | $255 |
Rent - up to | $535 |
Clothing | $30 |
Total | $820 |
or $9840/year.
Using that amount, how does hiring just 10 Nova Scotians with disabilities who are currently receiving social assistance compare with the NSBI deals?
Using that amount, how does hiring just 10 Nova Scotians with disabilities who are currently receiving social assistance compare with the NSBI deals?
Keeping incentives local
This isn't a jobs plan, it's a people plan. We should recognize that people with disabilities have been excluded from the workforce. For everyone's sake, we need to make better use of our human capital. The important question is the net benefit to taxpayers. Moving one person from social assistance to work can save taxpayers $11,292 a year, while subsidizing a "new" RBC job is worth just $208. In the former case, this is because every job means a savings of $9,840 (plus some administrative savings) in social assistance instead of an expense in the form of a rebate.
Getting people from social assistance to work is complicated. Few people would choose to live in the poverty imposed by the basic allowances of the Department of Community Services. On the other hand, inconvenience, inertia and low expectations mitigate against risking a change. The nightmare stories are legion.
Consider getting to work in the first place: not all bus routes in HRM are accessible, in rural areas transportation can be nonexistent, Access-a-Bus is inflexible to the point of being useless. Or job accommodation: Employers are fearful of expenses like accessible washrooms or special tools like accessible workstations. Or the daunting 103 page rulebook controlling every aspect of your life. Independence and change can be scary, particularly when your self-reliance is untested.
Currently, a social assistance recipient trying work as an experiment is allowed to keep the first $300 earned plus 30% of anything over. A minimum wage job is worth $1767/month. A half time experiment would be worth $883 gross, or $300 + (30% of $583 = $175). Working 80 hours/month would be worth $475 or $5.90/hour. Not much incentive, and I doubt many are tempted.
In the US, those receiving Social Security Disability Benefits may keep their entire benefit while working full-time for up to 9 months.
An even more attractive alternative would be to spend some of the $11,292 savings per job on incentives, as I suggested above. $500 to workers for transitional expenses, $1500 to the worker at the end of a year of full-time employment, $2000 or more to any Nova Scotia employer for workplace accommodations, $2000 to the employer for public accessibility. Still leaving $4292 for the taxpayer - more than 5 times better than the Igate deal. We should be generous to our own employers and to ourselves.
There are 12,641 people in the demographic: Nova Scotians of working age, with mild or moderate physical disabilities, not currently employed. They will have a variety of income sources - Canada Pension Plan, Provincial income assistance, private insurance. It's difficult to say how many have income primarily from the province, but someone knows the answer.
It will be hard work, but sustainable, predictable and in keeping with our ideals. There should be no disincentives to work.
The payoff
The accessibility legislation promised by this government will be a source of apprehension for many Nova Scotia businesses. Consequently, there are tremendous benefits to linking accessibility with employment. It's an incentive for employers, taxpayers and job-seekers alike. It has immediate and tangible rewards. It has lasting implications for the general public. It's transparent, voluntary and incremental. It strengthens the case against counterproductive by-laws. It makes accessible transportation a necessity. It saves a ton of money. Most of all, we help ourselves.
It will be a sign of progress; that Nova Scotia can be self-reliant, won't heed the siren call of corporate welfare and is intent on making the most of its human capital. That's the kind of responsible message Bay Street respects.
This isn't a jobs plan, it's a people plan. We should recognize that people with disabilities have been excluded from the workforce. For everyone's sake, we need to make better use of our human capital. The important question is the net benefit to taxpayers. Moving one person from social assistance to work can save taxpayers $11,292 a year, while subsidizing a "new" RBC job is worth just $208. In the former case, this is because every job means a savings of $9,840 (plus some administrative savings) in social assistance instead of an expense in the form of a rebate.
I'm proposing that some of the savings realized by moving people from social assistance to work be used as an incentive to home-grown employers and reward to participants. A person going from $9840/year to full-time minimum-wage employment has more use for a reward than the Royal Bank. And by encouraging local employers to make accommodations for disabled workers, we can make a permanent dent in the chronic underemployment of people with disabilities, only 47.9% of whom are employed (68.7% for everyone else).
Incentives should be well-integrated with existing training efforts and follow the principle that the money is tied to individuals, not government. And those incentives will be spent in-province, of course, instead of vanishing and reappearing on Bay Street balance sheets.
Incentives should be well-integrated with existing training efforts and follow the principle that the money is tied to individuals, not government. And those incentives will be spent in-province, of course, instead of vanishing and reappearing on Bay Street balance sheets.
Making it happen
Just as accessible constituency offices are a symbol of democracy, removing barriers to productive work is a symbol of equality. Figuring the cost of social assistance for disabled Nova Scotians and devising useful work incentives ought to be a priority at least as important to government as enticing some company from New Jersey to bring a few jobs to Dartmouth. We can take pride in fairness.
Just as accessible constituency offices are a symbol of democracy, removing barriers to productive work is a symbol of equality. Figuring the cost of social assistance for disabled Nova Scotians and devising useful work incentives ought to be a priority at least as important to government as enticing some company from New Jersey to bring a few jobs to Dartmouth. We can take pride in fairness.
Consider getting to work in the first place: not all bus routes in HRM are accessible, in rural areas transportation can be nonexistent, Access-a-Bus is inflexible to the point of being useless. Or job accommodation: Employers are fearful of expenses like accessible washrooms or special tools like accessible workstations. Or the daunting 103 page rulebook controlling every aspect of your life. Independence and change can be scary, particularly when your self-reliance is untested.
Currently, a social assistance recipient trying work as an experiment is allowed to keep the first $300 earned plus 30% of anything over. A minimum wage job is worth $1767/month. A half time experiment would be worth $883 gross, or $300 + (30% of $583 = $175). Working 80 hours/month would be worth $475 or $5.90/hour. Not much incentive, and I doubt many are tempted.
In the US, those receiving Social Security Disability Benefits may keep their entire benefit while working full-time for up to 9 months.
An even more attractive alternative would be to spend some of the $11,292 savings per job on incentives, as I suggested above. $500 to workers for transitional expenses, $1500 to the worker at the end of a year of full-time employment, $2000 or more to any Nova Scotia employer for workplace accommodations, $2000 to the employer for public accessibility. Still leaving $4292 for the taxpayer - more than 5 times better than the Igate deal. We should be generous to our own employers and to ourselves.
Worth Remembering |
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Hiring just 10 workers currently receiving social assistance, taxpayers receive more than the direct benefit of the RBC deal. |
There are 12,641 people in the demographic: Nova Scotians of working age, with mild or moderate physical disabilities, not currently employed. They will have a variety of income sources - Canada Pension Plan, Provincial income assistance, private insurance. It's difficult to say how many have income primarily from the province, but someone knows the answer.
It will be hard work, but sustainable, predictable and in keeping with our ideals. There should be no disincentives to work.
The payoff
The accessibility legislation promised by this government will be a source of apprehension for many Nova Scotia businesses. Consequently, there are tremendous benefits to linking accessibility with employment. It's an incentive for employers, taxpayers and job-seekers alike. It has immediate and tangible rewards. It has lasting implications for the general public. It's transparent, voluntary and incremental. It strengthens the case against counterproductive by-laws. It makes accessible transportation a necessity. It saves a ton of money. Most of all, we help ourselves.
It will be a sign of progress; that Nova Scotia can be self-reliant, won't heed the siren call of corporate welfare and is intent on making the most of its human capital. That's the kind of responsible message Bay Street respects.
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