America’s neighbor to the north has an admirable—and achievable—set of policies for helping those who are down on their luck.
Victor Tan Chen
Vermont senator Bernie Sanders called on Americans to look to countries like Denmark and “learn from what they have accomplished for their working people.” He pointed to the generous policies of paid medical and family leave and low levels of income inequality associated with Denmark and other Scandinavian nations.
Hillary Clinton, too, said she loved Denmark—but, apparently, not as much as Sanders did. “We are not Denmark,” she said. “We are the United States of America. And it’s our job to rein in the excesses of capitalism so that it doesn’t run amok and doesn’t cause the kind of inequities we’re seeing in our economic system.”
This enthusiasm gap for all policies Danish is a handy way to sum up some of the political differences between Sanders, a self-described democratic socialist, and Clinton, whose family’s political fortunes rose on a centrist Democratic wave in the 1990s. But the real, substantive question that should be debated in the months ahead is not how much America should be like Denmark. It’s how much it should be like Canada.
In terms of policy, Canada is a better, and more realistic, point of comparison. America and its northern neighbor are quite similar. They both have racially and ethnically diverse populations. They both have relatively “liberal” (in the classical, laissez-faire sense) economies where the power of government and workers is not so centralized. Spending on government benefits is relatively light in both countries when compared to how the coffers flow across the Atlantic.
Nevertheless, America and Canada intervene in the economy in different ways and to differing degrees. And these seemingly small differences can have a huge impact on individuals, families, and communities, as I’ve found in my research.
Clearly, America won’t expand its social safety net to anywhere near the scale of Denmark’s over the next president’s time in office. Judging from their rhetoric in the debate, though, Clinton and Sanders both agree that government can and should play an important role in extending economic opportunities more broadly. Canada’s approach to policy shows us some of the practical ways a country can do that—without having to go far from our roots as a New World society of dreamers and strivers.
A long tradition of research comparing America and Canada—from classic work by Seymour Martin Lipset to more recent studies by Irene Bloemraad and Dan Zuberi—has examined the ways that the unique characteristics of the two sister countries bring about very different outcomes, in areas ranging from politics to immigration to union organizing. Here, I’ll focus on some of the national differences in the policy area I know best: unemployment.
In terms of policy, Canada is a better, and more realistic, point of comparison.
For my book, I interviewed dozens of unemployed American and Canadian autoworkers on either side of the Detroit River—in Michigan and Ontario. They used to work in the same kinds of plants for the same kinds of companies, and they had similar incomes and levels of education. As much as I could, I also tried to find pairs of individuals from each country who resembled one another in terms of their personal histories and present difficulties. Of course, the comparisons weren’t perfect, but by interviewing all these people—71 workers in all—I got a good sense of how much specific policies in each country helped (or did not help) as these individuals slipped into months and even years of unemployment.
Take two of the unemployed workers I got to know—one from Highland Park, Michigan, and the other from Windsor, Ontario. (As is standard in sociology, my interviewees were promised confidentiality.) After they lost their jobs, their spouses left them, taking their children. They ended up moving in with other family members—the Canadian with his parents, and the American with his sister. “It takes a lot for me to actually ask somebody for help, because I feel embarrassed,” said the Canadian, who has two young daughters.
Being unemployed turns you into “a different man,” said the American, who also is a father of two. “When I was working, I may have walked around with my head way up in the air, and now it’s kind of like looking down. It brings you down to a sense of reality.”
As disheartening as their situations were, both of these men tried their best to do the right thing. They looked diligently for new jobs, lived frugally off their unemployment checks, and continued to pay off the mortgages on the homes their kids lived in.
Unfortunately, both wound up in the emergency room. The Canadian got in a car crash and was rushed to the hospital in an ambulance. The American developed an excruciating pain in his back and side and was forced to head to the ER. “I finally just had to go and see what it was,” he said. “They ran a bunch of tests and everything on me, ultrasound and all this other stuff, and couldn’t necessarily really pin it down. They just called it inflammation.”
The Canadian paid nothing for his care. But the American had lost his insurance when he lost his job. He hadn’t extended his plan afterward because he couldn’t afford it. He ended up with a $1,000 hospital bill.
A health-care system where the government foots the bills—the single-payer system that Sanders wants—helps ensure that a random health emergency does not spiral into something worse. The man from Michigan was already in debt and already struggling to pay the bills—“I’m taking care of two households … so it can get rough at times,” he pointed out—and now he was getting pushed deeper into poverty.
Without a stronger safety net, it also becomes harder to pick oneself up from a psychologically devastating predicament like long-term unemployment. One of the American workers I studied was severely depressed and dealing with suicidal thoughts. After bouncing around government agencies and not getting any help, he turned to the Salvation Army for charitable donations of antidepressants and other prescription medications. He went to a local church for group therapy. The problem was, the only sessions available were for Narcotics Anonymous. He didn’t have a drug problem, but he started attending anyways. “They’ll talk to anybody,” he said. “They’ll let anybody in.”
I met a Canadian worker with a very similar background: unemployed, separated from his wife, in the process of losing his home, deeply depressed and anxious about the future. At times this man would walk around with his head swimming in rage, frustrated with other people and with himself. In his case, though, he was able to see a psychiatrist. “That’s not something that we’re supposed to do in my family,” he said. His friends would probably have sniggered if he told them. But the treatment was free, and he knew he needed help.
It’s important not to overstate the generosity of the Canadian model. For example, one of my depressed Canadian workers struggled to pay for outpatient sessions with a therapist that weren’t covered by the single-payer system. In terms of mental-health treatment, prescriptions, and dental and vision care, the Canadian system has gaps that supplemental insurance plans funded by employers often need to fill. But generally speaking, it was far easier for the Canadians I met to get the care they needed. And the fact that the Canadian system is lacking in some areas is exactly the point I want to make. We don’t have to be Denmark (or Great Britain or Spain, for that matter) to do a better job of helping people cope with a crisis.
Without a stronger safety net, it becomes harder to recover from a devastating predicament like long-term unemployment.
The same is true of policies to train unemployed workers and keep their families from falling into poverty. Here, too, Canada had small but meaningful advantages—though the gray areas are also instructive.
I remember two women I met, one from Michigan’s Macomb County and the other from Kingsville, Ontario. They were both in their forties and unemployed. They were both single mothers of two. Earlier in their lives, they had both escaped abusive marriages with the help of high-paying factory jobs. “That’s why I started at Ford—to get the money [to get] out,” said the Canadian, who had once showed up to the plant with a broken nose and blackened eyes because she couldn’t afford to miss work.
She was eventually laid off from that plant, though, and sunk into a deep spell of unemployment. After about a year, her unemployment benefits ran out. Fortunately, she got accepted into a government program that paid her way through nursing school. She received a living stipend in addition to her tuition costs, which allowed her to stay afloat financially as she finished school. Beyond the retraining, the government also provided a monthly child benefit and quarterly sales-tax refund that gave Alice additional cash in hand to pay off her regular bills. Eventually, she started working again.
The woman from Michigan didn’t have the same luck. She steadily used up her savings, including most of her retirement fund, and fell into a depression. “I try to cope with it the best way I can,” she told me. “I am on some antidepressant pills. I cannot sit here and let my kids down.” When I last spoke to her, she was talking to a government caseworker about getting enrolled in Temporary Assistance for Needy Families (TANF).
Through various targeted cash benefits, Canada does a better job of lifting the incomes of many families, especially single-parent households. These sorts of policies don’t just keep families out of poverty. Not having to worry so much about paying the bills also alleviates the tensions that tear some households apart, avoiding painful consequences for children and others caught in the middle.
Likewise, well-funded and long-term retraining programs make it realistic for the unemployed to go back to school and learn new skills that are actually in demand. And this approach doesn’t just improve their future job prospects. It also restores some of the sense of identity and purpose they had when they were gainfully employed. The woman from Kingsville told me she liked being a student, and thanks in part to her government-funded education, she added, life is finally “going the right way.”
Interestingly, America does offer generous retraining benefits—but only for workers who were let go because of foreign trade. The benefits for the rest of the workforce tend to be much paltrier. Indeed, one of the problems with America’s safety net is that it carves out special benefits and exemptions for particular (and sometimes quite narrow) groups, rather than just spending the money to take care of the problem more thoroughly and simply.
One of the problems with America’s safety net is that it carves out special benefits for particular groups.
Policies in Canada tend to have a broader scope, and they also tend to be implemented better. In my research, for example, I found that Ontario took up a particularly creative approach to make government work better: action centers. When a large layoff happens there, the government is obligated by law to reach out to those laid-off workers. Often they choose to set up an action center, which provides job-search assistance and connects unemployed workers to social services and benefits.
The action center is typically set up just for the workers at that specific office or plant. Also, the government trains laid-off workers from the same workplace to staff the center. The peer helpers know the people they’re helping, and their coworkers trust them. They can stop by a coworker’s house and ask him to drop by the center. A government bureaucrat can’t really do that as effectively.
When I visited one of the centers, a Canadian worker confessed to me that she was in a “constant depression” over her tight finances. But she said she didn’t feel the need to see a therapist. “This is my counseling, right here,” she said, motioning to the center’s conference room around her. “These guys are a big, big source of [the] glue that holds me together.”
In the United States, programs similar to Canada’s action centers aren’t nearly as widespread, according to Lynn Minick of the National Employment Law Project, who has set up a variety of these peer programs. And almost all of them have shut down or scaled back in recent years due to budget cuts.
If the goal of the next president is to rebuild the middle class, then following the policy lead of Canada—a country where there is less income inequality and a greater likelihood that those born at the bottom of the economic ladder can rise to the top—is a shrewd strategy. And it’s also a strategy well within our reach.
One policy I haven’t gone into in detail yet—unemployment benefits—makes this clear. For several years after the Great Recession struck, American workers could receive unemployment benefits for a much longer time than they could north of the border—as long as 99 weeks in the hardest-hit states, compared to just a year in the Canadian provinces. That’s because Congress chose to enact a major federal extension of unemployment benefits, which ended up helping millions of American workers keep their families and finances intact.
Those extensions have since ended, and in some states, including Michigan, unemployment benefits are now being cut off sooner than they were before the recession—even though the number of people out of work for more than six months (a quarter of the unemployed) is still at historic levels. The policy advantage here is now squarely on the Canadian side. Nevertheless, by rising to the occasion during the recession, America proved that it could far surpass Canada in helping those in need if it really wanted to. The government spent money wisely to keep families from falling out of the middle class—and the sky did not fall.
Canada is going into its federal election next week amid a recession. But economists there don’t seem to be worried, given the recession’s mildness, the temporary drop in oil prices (America imports more oil from Canada than from any other nation), and continuing job growth that is pulling workers back into the labor force. In fact, the chief economist for the Bank of Montreal has called the current downturn the “Best. Recession. Ever.” Its toll will also be less severe for middle-class households thanks to the policies I’ve just described.
It’s important to remember, too, that the Great Recession in many ways has not ended for the middle class here in America. We’re supposedly six years out of the recession, but wages are still growing weakly, household income is still below its inflation-adjusted peak in 1999, and the labor force is the smallest it’s been in almost four decades—in part because many of the long-term unemployed have given up on finding work.
Public surveys tell us that strong majorities of Americans favor policies that would reduce inequality and reduce the risks that today’s economy foists upon middle-class families. Indeed, if we can get beyond the meaningless debates over what is “socialist” and what is not, we can find a lot of agreement about a sensible set of policies to pursue. This would entail, among other things, making the social safety net more effective and efficient. And the first place to look for good, practical, and politically viable examples would be north of the border.
Sure, Canada isn’t Denmark. But then again, it’s not Denmark.