MYTHS ABOUT FINANCIAL LITERACY: VIEW FROM THOSE WITH NO MONEY TO MANAGE

Welcome to RRSP Season!  As we leave our holiday season, pack up our Christmas decorations, park the tree by the curb and get back into the business of actually working for a living, we not only bombarded with credit card bills from the Christmas season, we get bombarded by commercials reminding us how we are "richer than we think", or how "banking can be this comfortable".  They then remind us that RRSP deadlines are approaching, usually about the end of February of each year.  Those of us who put our meager pay cheques into our accounts every couple of weeks show up at our bank branch to deposit them are greeted with signs everywhere, reminding everybody about this, as well as how important it is to save for our retirement.  Unfortunately, retirement is quickly becoming a consumer commodity, and no longer a rite of passage, so deserved after many years of hard work either in the labour market, contributing to one's community and/or raising a family.  It is becoming a domain of the rich.

At the same time, we are reminded how profligate we really must be, as financial analysts in the mainstream media constantly berate the majority of Canadians for not having saved enough for our retirement.  We are reminded that the population as a whole is living longer and that most of us will outlive our money if we are too much into spending for today, while ignoring tomorrow.  At the time, everybody from these same analysts to the Governor Bank of Canada warns us that Canadians are underwater with debt, where on average, each Canadian is carrying a debt load that is equivalent to 160% of their annual incomes.  At the same time, the likes of Stephen Harper and his sidekick,James Flaherty tell us how Old Age Security is no longer "sustainable", so we must now delay retirement for everybody until sixty seven, instead of sixty five.  This famous speech by Harper delivered in Davos, Switzerland last year was unprecedented, taking us all by surprise, particularly when Harper campaigned that he was not going to touch Old Age Security.

Aside from the cynicism that those that are making these changes will likely retire with an income most of us can only dream of and would therefore not even be eligible for OAS themselves, this is a ripe attack on the poorest of Canadians, those among us that have no workplace pension or sufficient savings to carry us over. The poorest Canadian seniors are eligible for Old Age Security and a Guaranteed Income Supplement, as well as a small GAINS (Guaranteed Annual Income for Seniors) upon turning sixty five, which at present does not deliver a huge sum, approximately $1,300 a month for a single person.  While those close to retirement today are protected from the later age of retirement, it is those of us in the second half of the so called Baby Boomer generation who will suffer the most.  Our part of this generation was the first to find work that no longer continues to offer benefits, such as pensions, health and dental or disability insurance, so we are told to not only become self sufficient, but to somehow figure out how to save money from a lower average income than our first generation Baby Boomer counterparts.

We are the generation that is getting laid off from our jobs in our late forties, or early fifties, with no realistic prospects to replace the income we lost.  We are the first generation to see pension plans that have been promised to us go bust, when a business makes a decision to go bankrupt or spend these resources elsewhere. Think Nortel, as the best known Canadian example. Despite now being shunted to an even lower income bracket, we still have mortgages to pay, credit card debts, as well as other costs of living that only seem to point in one direction: up.  Harper is not thinking of this group when he talks about how OAS is unsustainable and how we now have to retire later and later, despite our health and financial ability to retire.  As the labour movement continues to badger governments of all stripes to support reform of the Canada Pension Plan system, this would address only part of the problem. With as much as one third of all jobs being non traditional or precarious, and growing more in that direction, more and more workers are unable to make payments of any significant amount into the CPP system anyways.  Financial experts tell us that CPP only replaces 25% of one's pre-retirement income anyways, with the rest to be made up by workplace pensions, OAS and personal savings, which we just stated doesn't exist for most people.

There is a portion of people I work with who have had to drain virtually all of their retirement savings, including all RRSPs, in order to get onto welfare, after their short stint with Employment Insurance did not yield them with any job prospects despite earnestly trying to find work.  For the sake of what was supposed to be "short term" assistance, these folks were pushed in making permanent damage to their credit histories, life chances as well as possibility of even retiring at all, if they should ever re-enter the workforce.  This asset stripping only guarantees that more people will be reliant on the tax base if and when they retire.  Now, with the prospect of having to wait an extra two years to retire, seniors will likely be forced to spend an extra two years on welfare before they can apply for their seniors' benefits.

This trend is happening around us as spin masters continue to control mainstream messages from the media that make it look like everybody is at their earnings peak, have plenty of opportunities and choices in how to "plan" their retirement.  These ads are often followed by commercials featuring luxury vehicles that many of us could only dream of owning.  People like myself wonder who is actually buying these cars, especially when all I hear around me is how this company or that one is laying off dozens or even hundreds of workers, or as more people come into my office trying to battle the Workplace Safety and Insurance Board, which to some extent is attempting to mirror its counterparts in the private sector: collecting premiums, but failing or refusing to pay our claims.  This runs counter to compromise made under Meredith in 1915, whereby employers pay into a "no fault" insurance plan, where if any of their employees get injured, they will be compensated by this plan and given health care without the employers risking getting sued.  Many of them are forced to downgrade into much lower paid employment, or to risk re-injuring themselves by returning to their original employer where they hurt themselves.

I don't see the world with rose coloured glasses, nor do I have any religious faith to hold onto, because I am a realist.  I see what I see, and I observe history in the making.  Understanding how history has played out in the past, I certainly am not confident it will play out much better in the future, especially when people who make the decisions about the rest of us do not have to live with the consequences of these decisions.  In a chat with a disgruntled union worker the other day, he reminded me how he tried to get the by-laws changed to impose term limits on union executives, so once they negotiate deals with their employer, they have to someday return to the floor and live with what they just bargained for.  Unfortunately, it seems that the union in question has had the same leadership for many, many years and will probably not change in the near future.  Given the sinecure of these positions, it is hardly likely that these same union leaders and bargaining teams will give a damn about how their negotiations impact on the workers on the floor.

In the meantime, the even less fortunate, those of us that have fallen from the tree, these bright messages about Freedom 55 and travel and leisure in one's "golden years" mean absolutely nothing, as most of us continue to struggle with mortgages, debts and out of pocket health care expenses, that are simply not in our budgets as we attempt to squeeze every penny of our OAS/GIS incomes.  Even many who are presently on ODSP seem to be joyous once they hit sixty five, believing their problems are over, only until they discover they are no longer covered for certain home care services, the 25% portion of assistive devices under the ADP program, or for dental care or eyeglasses.  None of these people will be going away very soon on any kind of vacation.  They will be lucky enough to even hold onto their homes.

At the same time, our governments are throwing good money after seniors that are wealthy enough to afford decent homes and could afford significant renovations up front, in order to benefit from tax credits directed to assist them in remaining in their own homes.  These same seniors are portrayed in such commercials like the Premier Care bath commercials, where a relatively healthy senior lies back in a jacuzzi like setting in a bathroom that is typically larger than most of our living rooms. Low income seniors do not have the same options, even if they are able to hold onto their homes.  However, if they become too ill, they are more likely than wealthier seniors to be shipped off to nursing homes where they get stuck in a room with three other people for the rest of their lives, with only about $30 a week to spend on personal hygiene needs.  Many also languish all day in wet diapers tied down in restraints.  These are not the people that Harper envisions helping to live long and healthy lives.

All I can envision from the powers that be at this stage is a clucking of their tongues, rebuking these unfortunate souls, reprimanding them for not saving enough to pay for their own retirement, or getting themselves too deeply into debt, despite the fact many of these people ended up that way because otherwise, they would not be able to pay the bills to allow them to eat and have a roof over their head in the same month.  At the same time, these same powers that be held publicly paid positions resulting in generous pensions that amount to more than most working people earn in a year, actually wondering why other people can't be more like they were: so damned responsible, parsimonious and careful.  Yeah, sure.

This can be resolved easily.  Publicly funded pensions need to be transformed to defined contribution plans, while political positions should carry no pension entitlements at all.  Politicians should accept whatever options other Canadians are forced to live with in their own retirements.  It pleases me when Hudak speaks of rich public sector pensions given to public sector workers, such as government workers, teachers, fire fighters and others, while those of us with no pension whatsoever have to continue to pay taxes to pay for them to retire in greater dignity than we can ever dream of.  But aside from simply demolishing years of collective agreements for public sector workers, these same politicians also need to increase the rest of our pensions so that nobody retires in poverty, including the widows that never worked outside of the home or people that lived with disabilities that prevented them from working and contributing to their own pensions.

Those of us approaching our fifties are the ones that will have to take the reigns of this issue today to force politicians to come back to earth and rebuild a system of support for seniors that will enable any of us to live comfortably in our "golden years".  Some of you might be wondering if this will cost a fortune, thinking more money from "the taxpayers" will now have to be distributed to more and more people, particularly as those approaching or entering retirement create a bulge in our population demographic.  My belief is that doing this will cut back substantially on the number of seniors forced into nursing homes, or requiring expensive home care for illnesses that could have been prevented by better home environments or healthy diets, etc.  There are many ways this can be financed, not necessarily wholly by tax dollars, but this is a discussion for a different time.  I just don't know why, but this whole talk of RRSPs is depressing to the people I work with that are not allowed to have significant savings, have had to drain their previous retirement accounts, or if they deposit any money into their RDSPs, for the few that qualify to get one, are penalized for the income that this came from, especially if it came from employment.

A major re-think of our social security anybody?  The time is now.

NOW WHO OWNS THIS DEFICIT REALLY?

This was a nasty week, though not too full of surprises from either the federal or the provincial budgets. What bothers me most is how governments lie to their people about these things. They assume voters are stupid and will swallow whatever bit of ideology of the day that seems to make people believe they have to "do their part" in repaying the debts of others. Yes, that is what I said. This deficit is not our debt, at least for most of you reading this here. If your neighbour takes out a mortgage on their home and uses the money to enjoy a pool in their backyard and to create a fireplace in their basement, are you willing to give your neighbour some of your hard earned cash to help him pay off this mortgage? Of course not! So, why are we gladly acceding to paying for debts of the wealthy and the corporate sector, while our own incomes dwindle away year over year?

At the provincial level, the Premier stared at the camera and said in his usual gaze: “Others would make different choices,” Mr. McGuinty said, noting that the previous Progressive Conservative government cut welfare by 22 per cent.

“We are not prepared to balance this budget on the backs of families who may find themselves in difficult circumstances for the time being, or on the backs of our children.”

Yet, this is exactly what the provincial government is doing. As the wealthy and higher corporate elites sleep well this week, knowing the government is not going to be picking their pockets anymore, and in fact will continue to be getting even further "out of their way", the costs will all be borne by the poor and middle class. A single individual on welfare, or what is euphemistically called Ontario Works, gets a total of $599 per month to live on for all of their needs ... that means shelter, utilities, phone, clothing, transportation, and personal hygiene products. Most are lucky if they can even find housing at that price, let alone all the other necessities of life.

A single person on the Ontario Disability Support Pension gets $1,063 per month, also for all of their needs. While better than welfare, most people that get ODSP have major barriers in the paid labour force and often vilified by others, particularly those that think "at least half of those on disability aren't really disabled". I would love to have their internal knowledge of everybody's personal medical history like that. Would work nice in today's Parliament, particularly when vilifying another politician, but not in the streets where it is usually done. The people who say these things usually don't even know the people they are talking about, and use their "friend of a friend" story as statistical research. When you work at the ground level with these people, you know they pay rent and usually have very little for anything else, and they also face huge barriers to a healthy diet.

I argued one time here that the policies of the Ontario government are not unlike genocide in slow motion. Through the death by a thousand cuts, these programs are losing their purchasing power rapidly, leaving the poor in the dust, usually with very serious medical problems that could have been prevented if ... they had a healthy diet, they had safe housing and they had an adequate income. You know these are things our federal Conservatives don't want to hear about either? They just decided to cut the National Council of Welfare, a social policy advisory group that was established in 1969 to advise the government on poverty issues. Between that, and their elimination of the mandatory long form census, it is clear they don't want to know about poverty, and what to do about it, so they can lie to the public as well, about how there are no poor people in Canada. I suppose that might actually come true at some point when they all die of their medical conditions the state is imposing on them, but to me, they are no better than the architects of the Nazi Euthanasia program in the 1930s. It is just that those guys in the 1930s were just in a bloody hurry!

The provincial government is indeed making the poor pay for the tax cuts enjoyed by the wealthy for way too long. They say the budget for social programs is suddenly unsustainable, but their program for all day kindergarten isn't? Giving people on Ontario Works and ODSP a decent raise is unsustainable, but continuing the ongoing corporate welfare cheques is not? The Special Diet Allowance was unsustainable, but somehow a double digit jump in the number of low income people with diabetes, heart disease and other malnutrition-based diseases is not? They want to dump the Community Start Up and Maintenance Benefit and the Home Repair Benefit, which helped many people on assistance move from slum dwellings, get rid of bedbugs or replace their furniture after an infestation, or leave an abusive relationship, or fix the leaky roof that is causing mould to grow in the children's bedroom. They want to dump it to the municipalities, so they (the municipalities) can decide if and when they are going to do this, and what kind of benefits, if any, they will continue to offer.

Have you ever tried to secure a so-called discretionary benefit from your municipality? I have seen people repeatedly turned down for essential health services, such as physiotherapy, orthotics, mouth guards, dentures and other so called discretionary benefits, which get awarded on the basis of a worker's say so, not on actual medical need. By downloading these benefits, there are no appeal mechanisms available. Many municipalities use the money for other programs, and when one seeks help for these types of programs, they get handed a list of charities to go begging to. I don't know about you, but if somebody is seeking a job, the last thing they need is for a potential employer to know their personal and financial business. The reason I say this here is because the vast majority of these charities are run or led by local business people, aka employers. I met one woman who had been interviewed for a dream job, only to go to the food bank the next day to find the same man who interviewed her the day before stocking shelves at the food bank. The privacy of the rich was one of the reasons why the long form census was abandoned, while the privacy and confidentiality rights of the poor are so casually disregarded.

Hospitals will now get funding based on expertise and numbers, so if a low income person does not happen to live near a busy, urban hospital, their needs will likely not get met. The wealthy don't have to worry about this. They can just cross the border and use their VISA or American Express cards to pay for what they need right away, while the rest of us will be facing longer waits for poorer quality care. The health care sector is personal beef of Harper's. His strategy is to encourage provinces to "experiment" with private health care, and gradually give less and less to the provinces, so they will end up having to consider cuts. This has already been demonstrated with Harper's health care accord he just imposed on the provinces. There is no need for a meeting, he says. He will tell the Council of the Confederation where it's at.

So, wither the hope for the poor? This is no different how than the poor have always been treated. I don't recall massive spending programs to help lift people out of poverty, ever. Yet, it is these very programs that are now getting blamed for causing the deficit. Like, never mind ORNGE, eHealth, OLG and other programs gone mad under the present regime with truck loads of money being given to people that already have enough to do very little, and despite the controversy around any of these programs -- not a single benefactor, including those consultants billing over $3,000 a day for their "expertise" and their choco bites from Tim Hortons, ever had to pay a penny back! Yet when somebody on Ontario Works or ODSP even dares find a penny extra, it is clawed back before it is even noticed.

Dalton McGuinty has lied to us in the past. We know that. However, please know he is now lying to us once again when he says he will not balance the books on the backs of the vulnerable. He just did. It is too late for this friend of a friend of mine who heard "budget rumours" related to housing or something, that led her wrongly to believe she was going to lose her housing subsidy under the budget. She tried to kill herself, and is now in hospital under 24 hour suicide watch. This $800 a day could have went to give her better nutrition through additional funds to help her eat better, or they could have been spent on making necessary repairs in her building so that she can feel more safe ... but no, another $800 is a day is being spent to pay professionals to protect this woman from herself. I am sure there are more out there like this and I would encourage all of you to share your stories here.

The sad fact is austerity agendas do not save the government any money or lead to more job, but in the end, can actually result in the needless misery and death of many people. It is a form of population control. At one time a former Minister of Community and Social Services suddenly announced there were "too many" people on ODSP. I would hate to believe this is the way the government would go in order to reduce these costs, although it is not difficult to imagine. The same debate is going on in the UK, except it has gone beyond debate into three dimensional reality. There are suicides, hate crimes, continuing harassment of people with disabilities, riots, etc. The government of the day wants to cut more taxes, only of course to make matters even worse -- less revenues means less money to spend and less money to spend can aid a government in enforcing their own prejudices.

The federal Conservatives chose the chicken way to get elected by denying they will ever touch old age pensions, but now as far away as Davos, Switzerland, he publicly muses about how the Old Age Security is no longer sustainable. Perhaps, as he tells his banker and other elite friends, most of whom earn too much to even qualify for the Old Age Security anyways, that it is good enough that people are "living longer" and perhaps, they should be working longer - assuming of course, they even have a job to work in, or can work at all. I have no illusions about ever retiring. People my age were literally robbed of our entitlement to a retirement pension by people like Stephen Harper and other proponents of socialism for the rich and austerity for the poor. It is also another way for Harper to "stick it to the provinces" which will now have to carry more people for two years on welfare or ODSP monies.

Unfortunately, this ignorance is just going to spin its course because there are still too many people out there who are "all right Jack", that continue to believe the poor and disadvantaged are there on their own merit, and not due to systemic issues beyond their control. Personally, I am in a bloody hurry too. I am in a hurry to one day see those who today say, "I'm all right Jack" lose the one or two things that are keeping them from joining the breadlines today. That may be their spouse who earns a good income. Marriage isn't guaranteed in stone, girls. Forty to fifty percent of marriages end in divorce. It may be their health. Not everybody can continue to work if they fall ill, and less and less workplaces are offering benefits to those recovering from serious health issues. Welcome to the world of ODSP, folks... the place you turn to on your way down! It can be their job. Many say they are living one or two pay cheques from the streets, and we all know how fragile jobs can be. Caterpillar is just the tip of the iceberg, folks. Maybe tomorrow it will be your boss that comes in to announce that you will have to take a fifty percent cut in pay, or lose your job. Can you survive on fifty percent of your salary? Maybe not. Even if you can, what stops your boss from coming in two years down the line and asking you to take a further fifty percent cut?

People like me have been watching the trends. Former middle class workers who used to be "all right, Jack" are now living out of their cars, losing their homes, and losing their health. Women who used to be self confident in the corporate world are now getting ill, having to rely on social assistance incomes. Because their doctors have nothing more to do for them, many of them have been shipped to nursing homes in their forties, just so they can have three meals a day! Another man I know, a former home builder, is going to lose both of his legs later this year to diabetes, because his disability allowance leaves him less than a hundred dollars a month for food. I wonder how much all of this is costing the public purse.

Perhaps, we need to take another look at that report on the cost of poverty, and how little it would actually cost at the federal level to bring everybody who is currently living in poverty out of poverty and destitution. Oh, I forgot. The National Council of Welfare that produced that federal report is no longer useful, because they do not march to drummer of austerity like the federal government thinks everybody must. I think all of you need to read the links, understand that the government is making policy choices to keep people in poverty, as opposed to it being an inevitable thing. There are countries where poverty is very rare, and such countries have the best economies of the world. Unfortunately, our governments don't want us to know that, because they want us to become more ignorant of the facts in our own country.

However, I refuse to be ignorant. I refuse to stop asking questions. I also refuse to stop demanding that our politicians start representing all Canadians, not just those that can live in comfort this week knowing their pockets will not be picked and that government will just "get out of the way" for them.

Your thoughts?