Abstract

From Post-War Welfare to Neo-liberal Workfare in Ontario

Charles W. Smith

In Ontario, post-war capitalism was defined through its branch plant dependence with the United States, which brought with it significantly high levels of economic growth, close to full employment and a relatively strong welfare state, including comparatively high levels of welfare and unemployment benefits. With the downturn in the global economy in the mid 1970s, however, Ontario’s industrial economy was particularly influenced by the GATT rounds, which loosened the tariff restrictions protecting branch-plant manufactures, thrusting the regional economy into the north-south pull of the highly competitive North American trade bloc. This restructuring was to have dramatic consequences on the Ontario working classes, as plant closures led to high levels of unemployment which hovered at 10 percent throughout the late 1970s and early 1980s. The high levels of unemployment in this time period placed a significant demand on the Ontario welfare state, as thousands of working and non-working poor were forced on to state sponsored social assistance, reaching a record of 12 percent of the population (or 1.3 million people) in the recession of the early 1990s. Within this climate, the backlash against those receiving unemployment insurance and state sponsored welfare reached new levels, as Conservative strategists and neo-classical economists argued that welfare benefits gave something for nothing, creating a labour market characterized by dependency and laziness. The Conservative solution, which dominated the Ontario election in 1995, called for a dramatic reduction in state sponsored social assistance, while also implementing work-for-welfare (workfare), which they argued would provide individuals with a “hand up not a hand out.” Upon their election, the Tory government moved directly to punish the working and non-working poor, cutting welfare rates, tightening eligibility requirements and forcing able individuals to accept limited work placements for significantly reduced benefits. In other words, it sought to shift the blame for high levels of unemployment on to individual workers, rather than on the structural weaknesses of the Ontario economy within the North American trade bloc. Yet, how do we situate the restructuring of the Ontario welfare state with programs such as workfare within the larger class structures of contemporary neo-liberalism? It is the argument of this paper that workfare in Ontario is designed specifically as a downward pressure on the working class and organized labour as a whole, as the Keynesian commitments to social assistance came to be understood by the ruling classes as an institution which shielded working people from the full effects of the market. Workfare can be understood, therefore, as one method to remove that shield, subjecting the working class to the full wage pressures of the global, and increasingly deregulated markets emerging out of the long downturn in the post-war economy.

Bio

Charles W. Smith (BA UNBC, MA York)
Ph.D. Candidate
Department of Political Science, York University

My research interests focus on the relationship between organized labour, the state and economic restructuring in Canada. I have recently completed an article for the University of Alberta Law Review (with Lorne Sossin) on the restructuring of the federal public service. My dissertation research is an examination of the changing dynamics between organized labour and the provincial state in the period between 1980-2000.

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