New Deal for Families

The Canadian economy grew 108% since 1976, even after adjusting for inflation.  On average, this means it produces an extra $35,000 per household compared to 1976.

Yet the new reality for parents with preschool kids is a decline in the standard living.  Compared to the previous generation, young families have less time together, less household income after housing, and insufficient services to balance work and young kids.

This is a bad deal.  The Generation Raising Young Kids doesn’t get its share of the economic growth.  A New Deal will change this by providing a Time Dividend to families.

Just as the average dividend paid by Dow Jones Industrial stocks is 2.8%, a Time Dividend would ensure the generation raising young kids accesses 2.8% of the economic prosperity produced today compared to the mid-1970s.  2.8% equals $22 billion annually.

The Time Dividend will mean:

1. We put the family back into Canadian values, while acknowledging the diversity of households, and recognizing the very different circumstances facing parents today compared to the Baby Boomers.  This difference is particularly striking before kids reach school.

2. Spending more time together, and spending less on stuff.

3. Choices for women and men to contribute at home and on the job.

4. We enable and expect personal responsibility:  moms and dads alike will have enough time to raise their kids, and enough time to earn a living.

The Time Dividend requires three policy changes:

New Mom and New Dad Benefits will transform the uneven access to parental leave that is unaffordable and ignores dads into a benefit system that ensures all parents today have the time and resources to care personally for their newborns. How?

1. Extend parental leave from 12 months to 18 months, generally reserving the extra six months for dads (with exceptions for lone-parents and same-sex couples).

2. Make sure leave is affordable by insuring 80% of parents’ income up to $60,000 a year.  This increase will double the existing maximum benefit.  The new minimum benefit will be $440 weekly, enough to eradicate child and family poverty for this age group.

3. The benefits would be available to single- and dual-earner households regardless of parents’ attachment to the labour market, and would include the self-employed.  Moms and dads who currently do not qualify for leave would see their income increase by at least $14,000 in the 12 months following the birth of their child.

4. During a child’s first 18 months, parents will enjoy increased access to healthy child check-ins and parenting support to monitor for early developmental delays and to answer parents’ questions regarding children’s feeding, sleeping, crying, etc.

$10 a day child care services will remedy today’s epidemic of unregulated, unaffordable child care and early learning services to ensure that parents have enough employment time to manage the rising cost of housing and stalled household incomes. How?

  1. When the New Mom and Dad Benefits end, reduce child care service fees to no more than $10/day (full-time) and $7/day (part-time), making it free for families earning less than $40,000/year.
  2. Ample caregivers will be on site to ensure that kids spend their time in developmentally stimulating activities and play, including children with extra support needs.  Caregivers will have appropriate training in child development, and will be paid pay equity wages.
  3. The services will support healthy child development by supplementing, but never replacing, the care that families provide directly.  Families can choose to use the services regardless of parental employment.  Families will be able to access parenting support even if they do not choose to enrol their children in non-parental services.
  4. Where numbers permit, families can choose programs that feature a language other than English or French in recognition that Canadian families speak many languages at home.

Flex-time for employees and employers will remedy workplace standards that make it standard practice to ignore the family by ensuring all employees can choose to combine work and family successfully. How?

1. Overtime, Employment Insurance, and Canada Public Pension premiums paid by employers will be adapted to make it less costly for businesses to use employees up to 35 hours per week, and more costly for hours thereafter.

2. Overtime will kick in at 35 hours a week (averaged over a year).  Overtime premiums will be paid either as cash or earned time away from work.

3. With new incentives, employers will reduce the work week 3-5 hours on average for the half of men and the third of women who currently work more than 40 hours/week.  These employees will trade some after-tax wages (or future wage increases) in order to gain 4 more weeks of time per year.  In negotiation with employers, this time could be taken in chunks, or as earned hours away from work each week throughout the year.

4. Changes to the National Child Benefit Supplement will ensure any reduction in employment hours does not reduce income in low-earning families.  This may be especially important for some lone parent households.

5. Employees who currently work part-time hours will gain opportunities for more employment.

6. Within two-parent homes, flex-time may not change the total hours that parents work, but redistribute them more evenly between dads and moms.

Because Canadians are living longer, there are pressures to raise the official retirement age from 65 toward 70.  The New Deal does not reject this shift, but insists it must occur with greater appreciation for the time pressures facing employees when their children are young.  In other words, adults will trade some hours in retirment for more hours when their children are young.

Across the country, the three policy changes in the Time Dividend will cost Canadians $22 billion annually, before counting the immediate benefits, or considering from what programs we may re-allocate funding to pay for them.  For each Canadian adult, $22 billion a year means $2.20 per day, less than a cup of coffee and doughnut at Tim Horton’s.

$22 billion is about 1.25% of the Canadian economy.

It is about one-third of what Canadians currently pay for Old Age Security and RRSP subsidies.

Between 2002 and 2009, Canadians increased our public spending on medical care by more than $22 billion annually, after adjusting for inflation.  Clearly, $22 billion can be found for priorities.

Generation X-it

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