Shortly after the COVID-19 pandemic plunged the global economy into crisis in March 2020, I wrote an essay expressing my hope not to use the financial collapse to justify a push for more financial literacy education in schools Will be done. But it has happened since then.
In May 2020, the Organization for Economic Co-operation and Development (OECD) announced its Program for International Student Assessment 2018 results with the following question: “With unemployment rising and a global recession, it is more important than ever to ask: are adolescents Knowledgeable about money matters?
Ontario recently added financial literacy to the Grade 9 math curriculum. Some researchers have emphasized the relevance of financial literacy education in the midst of the current COVID-19 economic crisis.
Financial literacy, as defined by the OECD, is “a combination of the awareness, knowledge, skills, attitudes and attitudes necessary to make informed financial decisions and ultimately achieve personal financial well-being.”
My research on high school curriculum documents in Canada and the United States shows that financial literacy education creates financial outcomes in individualized ways that are rooted in the ideology of merit. Mainstream financial literacy pays little attention to the macroeconomic and socio-political contexts in which it is increasingly difficult for hard-pressed households to control finances as the gap between the wealthy and everyone else widens.
push after recession
After the 2008 recession, financial literacy gained traction in both Canada and the US.
Education scholar Laura Pinto argues that the negative economic effects of the 2008 financial crisis were less pronounced in Canada than in other OECD countries. Nevertheless, the connections made by governments and the media between the state of the economy and the need for financial literacy among citizens led to the development of financial literacy education policies across the country.
In 2010, a Toronto Star The columnist summed up: “After the last stock market crash, the federal government realized that people needed help with spending, saving, investing and – of course – borrowing.”
In both industrialized and emerging economies, the OECD declared that “lack of financial literacy was one of the factors contributing to ill-informed financial decisions…” It recommended that governments develop financial education programs and promote financial literacy education. integrated into the school curriculum, and many followed suit.
Such recommendations and government efforts suggested that it was the spending habits of the general public largely to blame for the slowdown, despite the fact that both a lack of government regulation and reckless and illegal behavior in the financial sector were significant. were contributing factors.
Today, some financial literacy advocates are focusing on how the COVID-19 recession has exposed the financial irresponsibility of some.
In the US, Charles Schwab Brokerage, whose CEO is a billionaire, is one of several financial services companies producing financial literacy resources.
The results of the company’s online survey conducted by Harris Poll of more than 2,000 American adults in June 2020 are reported on the website Schwab MoneyWise, which promotes school lesson plans. The survey found that 89 percent of people agree that a lack of financial education contributes to poverty (58 percent), lack of job opportunities (53 percent), unemployment (53 percent) and wealth inequality (52 percent). . According to the company, the findings highlight the “serious impact” of the “lack of financial education during COVID-19”.
economic, racial injustice
Advocates of financial literacy education continue to link personal financial information and behavior to deeper social problems and economic crises, even in the face of a financial crisis caused by a pandemic and a year of global civil rights protests following the killing of George Floyd. in Minneapolis.
Both the pandemic and the protests have forced the public to reckon with the racial wealth gap in both the US and Canada, and economic racism in Canada’s pandemic response and recovery.
Darrick Hamilton and William A. Economists such as Darrity, Jr. have shown how deep-seated economic and social structures, such as inheritance and intergenerational wealth transfers benefiting whites, perpetuate wealth inequality and racism in America, yet, they write, financial literacy. The narrative implies poor decision-making or lack of financial knowledge on the part of black Americans is at the root of poverty.
Political economist Chris Clark has noted that in response to economic crises, financial literacy education serves as a coping strategy that makes people more resilient to inevitable market failures.
But considering financial accidents to be inevitable, the paradoxical elements of this thinking become clear: market-compliant behavior supported by financial literacy education cannot ultimately guarantee economic well-being for its subjects.
Recipients of financial literacy education are instructed, as Clark writes, “Learning to Fail”.
Key findings from COVID-19
Let’s challenge the idea that if we learn to manage our money better, we can prevent or thrive in the next financial crisis.
On the contrary, the pandemic has reminded us that we are not self-sufficient, but part of a collectivity. What we see now is a powerful case for a stronger social safety net that includes paid sick leave, affordable housing, unemployment insurance and a robust health care system.
Read more: Why Ontario had to transfer thousands of Toronto’s COVID-19 patients to hospitals in other cities
Years of austerity policies and disinvestment in the welfare state prior to the pandemic, however, have only exacerbated the impact of COVID-19 in Canada.
At the same time, the Canadian Emergency Response Benefit (CERB) showed economic restructuring and redistribution of funds is possible after a problem is deemed a crisis.
Bad decisions of those in power
Instead of focusing on financial literacy education for students, let us discuss the profound illiteracy of those in power.
Poor policy-making allowed Canadian billionaires to increase their wealth by $78 billion during the pandemic, while nearly three million Canadians lost their jobs in March and April 2020 alone.
Workers in low-wage essential industries who could not afford the time were burdened by COVID-19 infections and deaths.
Today, as the planet burns and many people globally await vaccines, we see resources hoarding and wasting. Amazon founder Jeff Bezos, who has amassed nearly $70 billion since the pandemic began, recently made headlines when he celebrated a private space race.
Teaching children better budgeting will not fix inequality. Addressing the financial literacy of politicians and key decision makers who create policies that allow CEOs like Bezos to avoid federal income taxes or allow wealthy Canadians to squirrel money into offshore tax havens.