Rethinking Capitalism in a Post-Pandemic World

Rethinking Capitalism in a Post-Pandemic World

Capitalism has never existed without pushback, but calls for change continue to escalate amidst growing climate change concerns and the unequal economic impacts of COVID-19.
Heather Russek
Collaborator, Innovation Design + Futures
Jessica Thornton
Collaborator
Darren Elias
Collaborator
February 10, 2021
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For some, capitalism has resulted in significant economic benefit, yet for many, it has resulted in low wages, unsafe working conditions, precarious work, and environmental exploitation. Capitalism has never existed without pushback, but this conversation has recently grown in prevalence, especially given growing climate change concerns and the noted unequal economic impacts that COVID-19 has brought. Growing calls to “build back better” and to revisit the social contract, and the exploration of a wealth tax to finance COVID-19 recovery, signal that capitalism may face significant reform in the coming years.

In our new report, Yesterday’s Gone: Exploring possible futures of Canada’s labour market in a post-COVID world, produced in partnership with the Future Skills Centre, we’ve identified 34 meso-trends that could impact the future work in Canada. This report uses futures research and expert workshops to explore a broad range of trends—many of which have been accelerated, disrupted, or created by COVID-19—that have the potential to impact Canada’s labour market over the coming decade. This report is not meant to be a comprehensive overview, a prediction of the future, or a deep analysis of any one trend. It’s meant to explore and consider the potential for different trends to interact in ways that are not always obvious, as well as how these trends may impact populations and demographic groups differently. Here, we explore meso-trends related to capitalism in question that could shape Canada’s labour market in the decade ahead.

1. Degrowth Movement

The OECD released a new report, “Beyond Growth: Towards a New Economic Approach,” that challenges the assumption that economic growth is good for everyone. John Perkins, an economist and author, makes an argument for transitioning from aDeath Economy” to a “Life Economy” that cleans up pollution, regenerates devastated ecosystems, recycles, and develops technologies that restore resources. And in April 2020, 170 Dutch academics put together a five-point manifesto for economic change based on degrowth principles, while New Zealand introduced a federal budget that prioritized quality of life over economic growth. The concept of degrowth is focused on ecological goals and defines new metrics of economic progress. This has the potential to create a paradigm shift from a focus on GDP growth to a new system that prioritizes human well-being, environmental sustainability, and economic resilience. 

However… economic growth continues to be the dominant thinking, including in Canada, where economic growth remains a dominant priority in government budgets and policy statements. 

In 2030 this could mean:

  • Governments may start tracking well-being and equity impact as important metrics.
  • More employee-owned companies may emerge as an alternative to large multinational corporations.
  • With a focus on happiness, leisure, walkability, and green space, medium-density communities that support these priorities may be in greater demand.
  • There may be a greater emphasis on work–life balance and happiness, and four-day work weeks may become the norm.
  • Reduced ownership may mean new service-based business models emerge .

Potential labour market implications:

  • There may be a greater demand among companies for workers with expertise in ESG (Environmental, Social, Corporate Governance) strategy. 
  • Reduced consumption, and a focus on minimalism, may result in reduced demand for retail and hospitality industries.
  • National sources of wealth could transition from selling resources and physical products to a greater emphasis on intellectual property.

Signal Maturity: Emerging

2. Gender Equality Rollback

In 2019, Canadian women made $.87 for every dollar made by men, a slight increase from 2018, not including unpaid work associated with child and elder care. Gender equality in the workplace has been a significant focus in recent years, illustrated by the 2017 Women’s Marches, #MeToo, and record number of women in political power. However, coined the “She-Cession,” the COVID-19 economic crisis has disproportionately affected women across all industries. Furthermore, mothers have been overwhelmingly responsible for supervising remote learning, and working mothers in particular are leaving the workforce at unprecedented rates in 2020. While these events may be short-term, it is possible that COVID-19 may have long-term employment implications for women and women-dominated sectors. 

However… the UN and other global institutions are calling for a gender-focused COVID-19 recovery plan, putting women and girls at the centre, which may limit the impact of this trend. Additionally, free childcare could also significantly impact the direction and evolution of this trend.

In 2030 this trend could mean:

  • Because of the economic impact of women leaving the workforce for a year (or more), women may experience significant career pressure, making it less socially acceptable to take maternity leave, leading to declining birth rates or growing demand for infant childcare options.
  • There may be more single-income families should women decide to focus on unpaid child and elder care, resulting in a decrease in annual household income among Canadian families.
  • Potentially even fewer women will be found in decision-making positions.
  • There may be increased pressure on governments to increase gender parity policies and gender-based budgeting.

Potential labour market implications:

  • There may be continued barriers to workplace inclusion and equity, particularly for women who are Black, Indigenous, and people of colour.
  • Employers may become less transparent about salary range information if women have less power to push for equal pay and wage accountability.
  • Sectors traditionally dominated by women may find gender parity over time as demand drives recruitment of men.
  • There could be more women entrepreneurs or women engaged in gig work to maximize their flexibility, but less social and health insurance support for families.

Signal Maturity: Emerging

3. Workers First

As COVID-19 spreads across the country it continues to disproportionately impact the most vulnerable, including gig, part-time, and front-line workers. More broadly, the health, social, and economic crisis has exposed the gaps in the current social support system in place in Canada. This has put pressure on companies to improve working conditions and compensation. While many of these changes have been temporary, such as hazard pay, firms like Chapman’s have made their pandemic pay boost permanent. Additionally, formerly fringe policy ideas, such as Universal Basic Income (UBI) and a wealth tax, have been brought into mainstream politics. Fifty senators signed an open letter to the Prime Minister calling for a basic income, and the Federal Liberal Party has discussed both policies publicly as approaches to spur Canada’s economic recovery. The pandemic has led to a new understanding of what society views as essential work, which may lead to a restructuring of worker benefit and compensation structures in the longer term.

However… some concerns are being raised about spending on worker protections contributing to rising government debt levels, and Fitch Ratings downgraded Canada’s triple-A credit rating in June, dropping the country to an “AA+” rating over what it called “the deterioration of Canada’s public finances” due to COVID-19.

In 2030 this could mean:

  • Adopted policies like UBI may lead to increased entrepreneurial and educational pursuits.
  • There may be more flexibility for workers in terms of scheduling and location, which could impact where people choose to live.
  • A prioritization of well-being in the workplace could lead to more benefits and supports for workers, such as in physical and mental health.

Potential labour market implications:

  • A diminished luxury class could result in reduced demand for high-end goods, services, and real estate.
  • Wealth distribution policies could provoke high-net-worth individuals to leave the country, potentially contributing to a loss of talent.
  • The establishment of minimum standards for non-traditional workers could further increase the supply of workers in the gig economy in lieu of traditional labour.
  • Conversely, unionization pressure may incentivize large gig-work employers to reduce or eliminate operations in Canada.

Signal Maturity: Emerging

4. Public Services with a Price Tag

The economic crisis brought on by COVID-19 has led to record levels of government debt. In Canada, the pre-pandemic combined federal and provincial debt totalled $1.4 trillion. This debt has rapidly grown, with governments borrowing another $300 billion so far in 2020. In the coming years this could result in cuts to services across Canada potentially leading to a wave of privatization. Already, there are many signals across the country indicating this possibility, with Alberta’s United Conservative Party voting in favour of privatized healthcare, the undermining of public education by the use of pandemic pods, and the proposed privatization of parks and liquor in Manitoba and the move to privatize cannabis in New Brunswick. Given that approximately 20% of Canada’s labour force works in the public sector, privatization could have significant impacts on the labour-market landscape, while more private options for health and education could have significant societal implications.

However… the disproportionate number of deaths from privatized long-term care homes has increased demands for nationalization across Canada.

In 2030 this could mean:

  • Lower public sector budgets might generate more innovative public–private partnerships or motivate new approaches to taxation.
  • Access to public services in smaller communities may become constrained.
  • Privatized healthcare and education could lead to more polarized and unequal societies and reduced social mobility.
  • More private offerings may emerge for individuals willing to pay for additional services.

Potential labour market implications:

  • Pressure on public sector budgets could reduce the number of mid-skilled public service jobs, which might further polarize the skill distribution.
  • Privately owned citizen service offerings could continue to expand, for example in last mile transport, effectively taking over some government services.

Signal Maturity: Emerging

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For media enquiries, please contact Lianne George, Director of Strategic Communications at the Brookfield Institute for Innovation + Entrepreneurship.

Heather Russek
Collaborator, Innovation Design + Futures
Jessica Thornton
Collaborator
Darren Elias
Collaborator
February 10, 2021
Print Page

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