Individual Solutions Can't Solve Systemic Problems
The Toronto Star published a story this week as part of its “Millennial Money” series, in which millennials living in Toronto or the GTA who need help saving money can lay out their financial challenges and get free advice from a professional advisor. The latest Millennial Money article reveals once more the lack of any real solutions on a capitalist basis to the problems facing young people. The advice given by the so-called “experts”, which is always geared towards individual solutions, is frankly laughable and nowhere near enough to solve structural problems that ultimately require a total transformation of society.
As a millennial living in Toronto, I’m well aware of how difficult it’s become for even a young worker with a decent income to stay afloat, let alone save money. Especially since the pandemic, I rarely go out to bars or restaurants. I don’t own a car or even a TV. I live downtown in a small bachelor’s apartment. Most of my money goes to rent, groceries, internet, phone, and utilities. Even before the rampant inflation, the cost of living was out of control. But now I find it harder and harder to get by, while watching my savings erode no matter how much I try to save.
Enter Millennial Money, which purports to offer solutions from the best financial advisors out there. Reading the story of Pippa, a 34-year-old freelance photographer, her struggles with the rising cost of living and thoughts about leaving Toronto sound very familiar. These words in particular struck a chord: “I want to live in the city, but I’m starting to think it’s not sustainable,” Pippa says. “I don’t think I spend a lot, but I also want to enjoy the city I live in. Otherwise, what’s the point of living in a city?” I’ve wondered this many times myself in recent years.
Pippa’s take-home income is $4,500 per month. She pays $1,500 a month for a one-bedroom apartment downtown and mainly eats home-cooked meals. Pippa “allows herself to indulge in dining out once a week with friends, but her social group generally likes to gather at someone’s home to save money,” business reporter Ghada Alsharif writes. Lately, however, even these costs have become onerous.
Unfortunately, the advice offered by “expert” Jason Heath, managing director at Objective Financial Partners, is weak. His solutions amount to Pippa making her spending tax-deductible wherever possible, and getting rid of her car.
In Pippa’s situation, she should try to make her spending as efficient as possible. She tries to meal plan and that can help her with limiting food waste. But beyond that, if she is going to spend money dining out, she should try to make it tax deductible. She is self-employed, so she can deduct 50 per cent of meals and entertainment for business purposes against her photography income.
In relation to the challenges described, this “advice” is a joke. Pippa herself said that she dines out only once a week as a treat. Heath says she should try and get a tax deduction for that. But this is avoiding the larger problem: why is a young, educated professional so financially strapped that she can only dine out once a week—and even this is becoming too expensive? Why are young workers having to tighten their belts and cut back on even the most basic experiences that make life enjoyable, when we live in a world more technologically advanced and with greater productive capacity and material abundance than at any time in human history?
Heath says Pippa’s “rent is pretty reasonable for a one-bedroom unit in Toronto [my emphasis]. She can deduct a portion of her rent based on the square footage of her home-office area relative to her apartment size.” Context not mentioned here is a housing crisis where working people can’t buy homes, can barely afford rent, where evictions are soaring, and tent cities are expanding everywhere. A homeless person dies once every two days in Toronto. Meanwhile, the response from the city is more repression, with police violently destroying encampments and often the few possessions people experiencing homelessness still have.
I suppose you could call Pippa’s rent “reasonable” in an insane housing market where the average rent for a one-bedroom apartment in Toronto is now $2,532 per month, having increased by 23.7% in just a year. Based on her monthly income, one-third of every paycheque Pippa earns goes straight to rent. Like all tenants, Pippa is subsidizing a parasite who does not work and hoards homes for a living, also known as a landlord. I don’t think that’s reasonable at all. Housing is a basic human need, not a speculative investment. No one should pay more than 10% of their rent in wages. We need to expropriate empty properties to house the homeless, nationalize the big landlords and property developers, institute a massive program to build social housing, and cap rent at no more than 10% of a person’s income.
Then there’s the issue of Pippa’s car:
Although she can deduct a portion of her car expenses, this is an expense that sticks out. If you are going to live in the city and want to keep costs down, should you own a car? I appreciate she may need a car for her photography gear, but she may need to consider whether the cost of the occasional taxi or ride share is less than her car costs. She could even rent a car occasionally if needed. If she tried to limit these costs to work activities, and walk or use public transit for personal use, the work costs would be tax deductible and might save her 30 per cent tax. By comparison, only a portion of her car expenses are tax deductible if she is using it for personal driving too. She only budgets $330 per month for gas, parking and insurance, but repairs, maintenance and saving for the next car can be significant.
Personally, this is why I don’t own a car. But a freelance photographer who has more equipment and requires greater mobility might need a vehicle more. Here again, we’re getting to a wider problem. The postwar social contract suggested that a working person on a single income could afford a house, car, vacations, and decent standard of living for their families. Of course, the only reason that situation existed was due to the unique circumstances of the economic boom that followed World War II; the struggles of workers over decades to improve their conditions, which led to strong labour unions; and ruling class fears of the Soviet Union which compelled them to offer certain concessions to workers. Today that postwar social contract is dead. Now even a young, educated worker like Pippa, living in one of the richest countries in the world, can’t even afford a car, let alone a house.
What about public transit? I rely on the TTC to get around. Everyone in Toronto who relies on the TTC knows how unreliable and broken that system is. The general growth of poverty and inequality has led to a rise in transit violence. Now city council’s big plan is to again hike fares and cut service. Like everything else in this city, people will be paying more for less. Check the TTC Service Alerts Twitter feed and you’ll see how service is suspended along huge sections of the subway on a daily, sometimes hourly basis for various official reasons: collisions, fires, mechanical problems, trespassers on the track, “security incidents”, and of course “injuries at track level”, generally a euphemism for suicide (the fact that so many people are trying to kill themselves is itself an alarming symptom of a society in decline). The first snowfall each year throws the entire system into chaos. Anyone who relies on the TTC to get around is rolling the dice. The only solution is for the labour movement to organize a campaign to demand free, fully funded public transit. Strangely enough, I don’t see any corporate media articles putting forward that solution.
The article ends with the takeaways from Heath’s expert financial advice: “Pippa says she’s relieved Heath did not immediately tell her to leave the city. There are some options Heath mentioned she had not previously considered, which Pippa says she’ll definitely be taking into consideration.” Yet even moving out of Toronto isn’t much of a solution anymore, as the Star itself reported in a subsequent article published yesterday on fresh data from Rentals.ca:
But even leaving the city doesn’t hold the promise of affordability, the new data shows.
The average one-bedroom listing in Oakville went up 15.9 per cent in a year, to $2,268 per month. In Burlington, the same size listings were up 16.6 per cent in a year, to an average asking cost of $2,220. Similar trends held in places like Vaughan, Mississauga, and Brampton, with double-digit percentage increases. In Oshawa, the average one-bedroom listing was down 4.3 per cent compared with last February, though two-bedroom listings were up by 15 per cent.
“Rents are growing fastest in some of these cities,” Hildebrand said. When factoring in extra costs like commuting, he said tenants may not find any real savings by moving “further afield.”
“There’s not a lot of reprieve in the market — really, anywhere you look.”
To use a Star Trek analogy, life for the average person these days is becoming a real Kobayashi Maru: a no-win scenario. We shouldn’t be surprised that more and more people are identifying the real culprit for their woes: capitalism. Hence the growing popularity of socialist and even communist ideas. A whopping 1 million Canadian youth want communism according to a recent poll—conducted by right-wing think tank the Fraser Institute, no less! But even if major media acknowledge the problems of capitalism, as they are increasingly forced to, they will never, ever support overthrowing this rotten system. The reason is simple: wealthy capitalists own the mass media. The rich, the bankers, and corporations have a vested interest in not giving a platform to anyone who advocates the socialist transformation of society—i.e. from a system based on private profit to one based on social need—since that would directly threaten their own wealth and privileges.
Instead we get articles like the Millennial Money series, which is par for the course in how bourgeois media handle the cost-of-living crisis and growing poverty: by proffering individual solutions to systemic problems. Can’t afford to live? It’s because you’re not saving enough, or not being smart enough in your spending habits. And if no amount of saving prevents you from sinking deeper and deeper into poverty, well, it’s your own fault for not being thrifty enough.
Luckily, fewer and fewer are buying what the corporate media is selling. The revival of the labour movement and growing strike waves show that growing numbers of people, especially the young, are realizing only collective action can solve their problems. With the U.S. banking collapse this week, it looks like we’re about to experience a lot more economic pain. The number of people who see that the whole damn system needs to go is increasing every day. Whether they admit it or not, that’s a takeaway that the ruling class is “definitely taking into consideration.”