Dubious victory in war on poverty
We're winning the war on poverty, says Vancouver economist John Richards.
The employment rate among low-income Canadians has risen in the past decade. The welfare rolls have shrunk. And the overall rate of poverty has declined.
"The policy innovations of the last decade got much right," he concludes, in a study that is sure to delight hard-line conservatives and infuriate anti-poverty activists.
Richards, who teaches public policy at Simon Fraser University, wrote the 20-page paper, entitled Reducing Poverty: What has Worked and What Should Come Next, for the C.D. Howe Institute, a business-backed think-tank. That alone is likely to raise the hackles of social policy groups.
But his analysis deserves a thoughtful look. It is based on solid statistics. It is rooted in a sincere desire to improve the lives of low-income Canadians. And it raises important questions about the way ahead.
Richards compares the three provinces that implemented tough love policies – Ontario, Alberta and British Columbia – to Manitoba, which did not.
All three welfare-slashing provinces experienced a sharper decline in social assistance utilization rates and a more rapid increase in employment than Manitoba.
He acknowledges that economic conditions were favourable in the industrial heartland and the two westernmost provinces in the '90s. He also admits that federal policy changes – the launching of the National Child Benefit and the chopping of Employment Insurance – had an impact.
Nonetheless, Richards concludes, "changes in provincial welfare protocols probably explain much of the increase in the employment rate and the subsequent decline in Canada's poverty rate."
He maintains, therefore, that governments should stick with policies that make it difficult for employable individuals to get welfare. They should also steer clear of expensive new transfer programs such as a negative income tax.
Richards says nothing about increasing the supply of affordable housing. He says nothing about raising the minimum wage. He says nothing about removing the employment barriers immigrants face.
On the other hand, he does urge policy-makers to make child care accessible to low-income mothers, upgrade schooling on native reserves, be more generous to the mentally and physically disabled, and provide shelter for the long-term homeless.
Several things are troubling about Richards' study:
He leaves out Quebec, which achieved the most dramatic reduction in poverty in the country during the decade in question.
It took a markedly different tack than Ontario, Alberta or British Columbia. Its government passed a law "to combat poverty and social exclusion" then developed targets and timetables.
It enhanced social assistance, raised its minimum wage, implemented a working income supplement and put in place a universal family benefits program to support the province's poorest households.
Between 1996 and 2005, its child poverty rate fell to less than 10 per cent from 22 per cent.
To overlook such a large outlier raises questions about the validity of the findings and the motives of the author.
He compares three "have provinces" that enjoyed robust growth during the period in question to a "have-not province" whose economy did less well.
This makes it extremely hard to ascertain whether it was government policy or an expanding labour market that allowed Ontario, Alberta and B.C. to boost employment faster than Manitoba.
He mentions – then shrugs off – that an adult working full-time in a minimum wage job cannot lift his or her children "above standard poverty thresholds."
Surely policies that push parents into the workforce, without allowing them to support their children, cannot be deemed a success.
It is true that Canada's aggregate poverty rate (the percentage of the population living below Statistics Canada's low-income cut-off) did inch downward between 1996 and 2005. But it is far from clear that Mike Harris, Ralph Klein and Gordon Campbell deserve the credit.
While Richards celebrates this "substantial policy success," readers are left wondering what would have happened if the three premiers had chosen to share their provinces' wealth rather than punishing the poor.
(The report is available at www.cdhowe.org).
Carol Goar's column appears Monday, Wednesday and Friday.
Poverty rates higher in 1980s
Letter, Oct. 27
Prof. John Richards is wrong to criticize columnist Carol Goar with his assertion that poverty rates in Canada are substantially lower today than in the 1980s. Everyone – from TD Economics and Statistics Canada to the University of Toronto's Centre for Urban and Community Studies and the United Way of Greater Toronto – has documented deep and persistent poverty in Toronto and across Canada.
Canada doesn't have a widely accepted, reliable measure of poverty – a critical omission that Miloon Kothari, the UN's Special Rapporteur on Adequate Housing, noted with concern during his recent visit to Canada. If our national government can't be bothered to develop a solid statistical measure, how can we set realistic targets and measure our progress in implementing poverty-reduction campaigns?
Richards bases his claim that poverty is way down on Statistics Canada's low income cut-off (LICO), a commonly used poverty indicator. StatsCan reports that the percentage of Canadians living below the LICO before tax was an average of 16.54 per cent each year during the 1980s. For each year from 2000 to 2005, the rate had barely budged at 15.9 per cent. Each year during the 1980s, an average of 3,061,700 people were living in poverty. From 2000 to 2005, that number grew to 3,535,333 annually.
The conclusion: If you count real people, the number of Canadians living in poverty has grown by almost half a million from the 1980s – a whopping increase of 16 per cent. The poverty rate has only decreased slightly.
Richards alleges that drastic federal and provincial cuts to income-assistance programs in the 1990s were a kind of tough love that forced lower-income Canadians into the market economy. There's no question that there are fewer people today able to access employment insurance and other income assistance, but the facts clearly show that the poor haven't magically become richer as a result.
Michael Shapcott, Senior Fellow,
The Wellesley Institute, Toronto
1 comment:
well it seems to me, that Quebec has done quite well.
Small detail I presume.
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