If you were to guess, how big would you think the caring economy is?
Let me break the suspense.
Measured only by money exchanged for services, and the share of paid jobs, the combination of health and education* services contributes 12.3% of GDP and 21% of jobs.
Personally, I found this shocking, because caring is often viewed as a derivative thing. It’s not. It’s foundational. To both our human and economic well-being.
Let’s take a look at the numbers.
As an economic driver, the Caring Economy rivals real estate (12.7% of GDP in 2019, before the pandemic, and 13.7% in 2020), eclipses the next biggest industrial sectors: manufacturing (10% in 2019, 9.5% in 2020), construction (7.2%/ 7.3%), finance and insurance (6.9%/7.6%), oil and gas (5.6% both years) and retail (5%/5.2%).
As a source of jobs, the caring economy packs a punch that is almost double that of the next-biggest job-creating sectors: retail (11.6%/11.5.% in 2020), manufacturing (9.2%/9.3%), construction (7.7%/ 7.6%). As it happens, the sectors that contribute so much to GDP aren’t necessarily such important job-creators: finance/insurance (4.4%/5%), real estate (1.9%/1.8%) and mining, quarrying, oil and gas (approx. 1.3%).
Now, the health and education sectors have plenty of fantastic, high-paid jobs; but they also include some of the jobs with the worst conditions in the country. Essential for our well-being and for maximizing our potential, many if not most workers in child care and elder care are poorly paid and lack workplace protections. And, notwithstanding our pandemic reliance on care, some of that work is becoming worse for workers, as Jenny Yang and Sara Mojtehedzadeh at the Toronto Star have been documenting this week.
Any job can be a great job. The Caring Economy has the potential to be a powerhouse for recovery, and a major source of good jobs. It could play the role that the manufacturing sector played in creating the middle class from the 1950s to 1970s. The Caring Economy will expand anyway because of population aging.
So how will it evolve? By policy design (putting a premium on affordable accessible, quality care) or simple market forces (with the emphasis on prices and quantities)?
It’s our choice. Currently child care is the chokepoint of economic recovery, and elder care is an amoral HR shambles. We have to do better, in order to deal with the pandemic and to lay the foundation for post-pandemic recovery.
As I’ve argued in a feature for the Globe and Mail, a deliberate focus on the Caring Economy could generate a better life, not just a bigger economy; but only if we address issues revealed by the pandemic, and stop discounting the value of the Caring Economy (GDP driver! Job engine!). If you want a more equitable recovery, and a bigger, healthier middle class, you need to look no further than the Caring Economy. Let’s make that the focus of the road ahead.
* I’m defining the Caring Economy as health and education services combined. Health services include healthcare, eldercare, home care, long-term care, and social assistance; and education services run from early learning and childcare through PSE. Why include education services? Because it develops the potential of our youngest citizens, labour market entrants, and those with jobs or displaced from jobs. Pre-pandemic (2019) the Caring Economy's share of GDP was 12.3% [health 7%, education 5.3%]. It was 12.25% in 2020. As a share of jobs, pre-pandemic (2019) the Caring Economy was the source of 20.3% of all jobs [health 13.1%, education 7.2%], rising to 21% in 2020 (a little more in health, a little less in education).
The Atkinson Fellow on the Future of Workers is supported by the Atkinson Foundation. Find more information here.