I invited John Clarke, former activist with the Ontario Coalition Against Poverty (OCAP) and now lecturer at York University, to discuss the impacts of global inflation on the most disadvantaged in society: low income families and individuals – and, what can be done.
Inflation and Low-Income Families
For low-income communities, increases in the daily cost of living can wreak havoc on their ability to make it through daily expenses. Housing costs in Canada for example, comprise a high share of overall monthly expenses for its citizens compared to other OECD countries. Food and grocery prices continue to climb as a result of a multitude of factors, including global supply chain issues.
Interest rate increases: Creative Destruction for the Poor
The Bank of Canada has increased interest rates during the first half of 2022 and there is speculation this will continue into 2023.
According to John, driving up interest rates will slow the economy and put some out of work. This is not unlike the 1980s, where the US federal government under Paul Volcker, raised interest rates to over 20 percent. While this helped curb inflation, the national unemployment rate rose to 10 percent and it made finding affordable places to live near impossible. As well, industries such as construction and farming were hard hit with the high cost of borrowing to finance business activities.
John calls this situation, ‘creative destruction’ as those at the very top will increase interest rates, guided by the monetary theory of taking money out of the economy, however many will suffer. Low-income families and individuals tend to lose out mos in the pursuit of taking money out of the economy.
In this situation, as workers struggle to keep up with costs of living, demands will increase for higher wages. This will be viewed by many, as increasing inflation by spending more on worker wages. Instead, the discussion on profit-making by the world’s top companies will not be discussed in depth. The problems of inflation will then fall to the working class and the poor, to take what has been given and not to demand more.
Increase Social Benefits?
Low-wage and precarious workers are facing an impossible cost of living, with impossible rents. According to John, the increases to the Ontario Disabilities Support Program (ODSP) simply do not keep pace with inflation and the growing cost of living.
For John, there needs to be a dramatic increase on:
- Minimum wage
- Workers rights
A vast decline of the standard of living is at risk for low-income communities if immediate action is not taken. As well, there must be protection for tenants, and so rents cannot be pushed up in the amount they are being pushed up.
The benefits specifically for disabled persons is particularly harsh. Currently in Ontario, the basic monthly allowance is $1,169. People are turned down on a widespread basis, summoning arguments and evidence and such like.
To apply for this basic monthly allowance, the Provincial government has made the application process very cumbersome and restrictive. For persons with disabilities, it may be challenging to complete the application and risk not being able to produce Very restrictive – lots of people who should be on disabilities benefits, where they receive precarious benefits where they are likely to be cut off. It’s not unique to Ontario.
There is a need to articulate the issues the poor will be facing in the new environment. As a result, Clarke and others argue that social resistance is the only tool low-income families and individuals have to promote large-scale public policy change.
For Clarke, those most marginalized stand to benefit the least from government policy and are yet, most dependent on them. As a result, social resistance is the only tool left for these groups to achieve their ends.