ONA report shows privatization adds less to GDP than public care.
by Kimberley Brown
Recent research by the Ontario Nurses’ Association’s Economist and Policy Analyst, Salimah Valiani, shows that cutting public sector funding doesn’t actually save money. Not only that, but public spending actually adds more to overall economic output than some forms of private spending.
The role of public spending in economic production is regularly undervalued, much as the role of careworker has been typically undervalued.
Easy to Take for Granted: The role of the public sector and carework in wealth creation, includes data showing the effects on public and private investment on gross domestic product (GDP) in Ontario in various sectors. One dollar spent by the public sector on education, health and social services adds 87 cents to total output. Government spending on construction adds 71 cents, and spending on machinery and equipment adds 64 cents to GDP. Conversely, one dollar of private sector spending on machinery and equipment adds just 61 cents.
One dollar spent by the public sector on education, health and social services adds 87 cents to total output, whereas one dollar of private sector spending on machinery and equipment adds just 61 cents.
So according to the numbers, public sector spending actually contributes more to GDP than does private sector investment.
Not only this, but cuts to public sector funding will cause GDP to grow by less and less each year. Projections show that by 2014, if public expenditure cuts continue, real GDP growth will decrease by 0.7 percent. Given that GDP growth in North America is expected to be only around 2 percent annually, this is a significant number. The public sector is not simply using up resources as popular political rhetoric would have us believe, but is central to economic growth and development.
The public sector is not simply using up resources as popular political rhetoric would have us believe, but is central to economic growth and development.
Cuts to public health care in particular have the least impact on deficit reduction both in the long and short term.
In the short term, cuts to health care mean a shift in the cost of care from governments to households and individuals. This ends up costing us more in the medium to long run as unmet care needs lead to complications and worsening health and thus increases demand for health care services.
For care workers that are paid, this leads to work intensification and exhaustion, which contribute negatively to their health and the health of the system. Between 1997 – 2008 — a period that saw health care spending significantly reduced — unpaid overtime for registered nurses (RNs) in Ontario increased from just over 50,000 hours to just under 100,000 hours. That’s almost a 50 per cent increase in unpaid overtime hours in 10 years.
Among other recommendations, ONA’s discussion paper calls for a shift from "market efficiency" to "social efficiency" as the organizing principle for public services. Market efficiency is based on short term financial savings.
Social efficiency is based on practical knowledge sharing and collaborative decision making in the organization of care and services. In health care, resident nurses (RNs) and other frontline careworkers are central to this — rather than private consultants working on the basis of short term calculations.
© Copyright 2012 Kimberley Brown, All rights Reserved. Written For: StraightGoods.ca
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