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The Progressive Economics Forum

ONA Study on Macroeconomic Side-Effects of Austerity

The Ontario Nurses Association has been publishing some awesome economic analysis over the last couple of years, highlighting the talents of their new economist & PEF member Salimah Valiani.  Apart from a strong analytical & quantitative approach, ONA’s recent research has been very refreshing in the emphasis it has placed on gender analysis and the unique features of caring labour.

Their recent paper on the contractionary macroeconomic side-effects of provincial spending restraint is well worth reading.  Austerity-boosters always ignore the self-defeating side-effects of spending cuts in a context of generalized stagnation; as we’ve seen in Europe, austerity reinforces the same underlying macroeconomic problems that created the deficit in the first place.  The full ONA paper is here:

And here is a short summary of the paper from ONA:

TORONTO – As the province continues down the road of decreased public spending in health care and other public services through initiatives such as imposed wage freezes, forced pension erosion as well as sweeping labour law reform, the Ontario Nurses’ Association (ONA) is releasing a new research paper showing the wealth-creating role of public spending on health, education and social services in overall economic production.

Easy to Take for Granted: The role of the public sector and carework in wealth creation shows that the value of economic output generated through every dollar spent on public health care, education and social services is considerably higher than each private investment dollar.

“Using quantitative as well as qualitative data, our economist Salimah Valiani’s research demonstrates that what the current focus on public-sector cuts actually means is reduced economic growth in the years to come,” notes ONA President Linda Haslam-Stroud, RN. “Dr. Valiani demonstrates that Ontario needs to shift from a framework of ‘economic efficiency’ to one of ‘social efficiency’ for health care reform. Market efficiency results in short-term financial savings but also results in long-term costs for careworkers, the most vulnerable and negatively impacts economic growth as a whole.”

Haslam-Stroud says that, “remembering cuts to health care in the 1990s, our research and experience tell us that cuts to public health care are a false economy. We have to organize public health care and other public services so they are the most beneficial to recipients and providers. Contracting outside ‘experts’ who know nothing about front-line service delivery settings will inevitably leave Ontarians with poorer health and an increasing reliance on patients’ families and friends, to the detriment of everyone.”

The research paper concludes with recommendations for health care and fiscal reform. “In the current environment of increasing inequality and falling economic growth around the world, Ontario needs a combination of economic and human development in order to regenerate the economy and the population,” says Haslam-Stroud.

Enjoy and share:


Comment from Paul Tulloch
Time: December 19, 2012, 10:56 pm

Somebody at ONA had a thinking cap on the day they brought in Salimah, she is brilliant, and amazingly talented. Cannot wait to read more from her.


Comment from Angella MacEwen
Time: December 20, 2012, 12:50 pm

“Overlooking and undervaluing public services, public infrastructure, and carework does serious damage to the economy and the social fabric of which it is a part” – beautiful analysis Salimah!

Comment from John
Time: January 6, 2013, 12:40 pm

Why does Canada continue to march down the road of neo-liberalism after all these years? Because precious few people know about this kind of work. Bravo to ONA for doing this kind of analysis and research, but when I ask ONA members here at work if they know about the work ONA does they respond – to a person – “no”. Like the work of CCPA precious little of this information gets out even to progressive Canadians thanks to the nature of our media and the way people consume media (eg. getting “news” from Yahoo or the free papers – if they get news at all.)

I don’t want to be a bummer but we really need a national dialogue about this problem and we need to confront those on our own side who don’t want the corporate media to be an issue. One option would be to create a movement of people committed to sharing progressive news on social media on a daily basis – this has been done in Latin America to great success.

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