Poverty goes beyond economic theory

By 
  • April 11, 2008
{mosimage}TORONTO - Andrea Duffield, mother of three and raising them on her own the last five years, knows what poverty is. She’s suffered the humiliations and frustrations of not being able to send her kids on class trips, having to quit a job because it pays less than it costs to keep her kids in day care, having to quit a college nursing program that might have led to a good job but the combination of day care and text books left her with no money for groceries.
She also knows she's one of the lucky ones with subsidized housing.

"Subsidized housing is key to my and my family's survival," she said.

There are 70,000 people on waiting lists for social housing in Toronto. With the average two-parent poor family earning $10,000-a-year below the Statistics Canada Low Income Cut-Off in Ontario, there are plenty of families who have it worse that Duffield.

Still, being poor wears you down.

"You feel you have failed your children," she said.

Campaign 2000's latest report card on child poverty in Canada's most populous province confirms a pattern of continued poverty in boom times.

  • Campaign 2000 pegs Ontario's after-tax child poverty rate at 12.6 per cent, or 17.3 per cent before taxes.

  • The after-tax percentage translates into 345,000 children under 18.

  • Between 2002 and 2006 Ontario's economy grew 35.8 per cent according to Statistics Canada's tracking of gross domestic product.

  • Though Quebec's economy has performed poorly relative to Ontario's, with 14.9-per-cent growth in GDP between 2002 and 2006, it has managed to pull its child poverty rate down to 9.6 per cent from a high of 22 per cent in 1997.

  • Seventy per cent of Ontario's low-income children live in a family with at least one parent working.

  • All children living in families dependent on welfare are stuck below the poverty line. In December 2007 that was 195,327 children.

  • The average two-parent low-income family lives $10,000 below the poverty line.

  • Aboriginal, immigrant and lone mother families are the most likely to be poor.

(Sources: 2007 Report Card on Child and Family Poverty in Ontario, Campaign 2000; Real Gross Domestic Product 2002-2006, Statistics Canada)

As the Ontario government gears up to hammer out a poverty reduction strategy before the end of this year, some will be asking whether politicians and bureaucrats know what Duffield knows – do they know what poverty is? Can they measure it?

Measuring poverty is the key to an effective poverty reduction strategy, said Nipissing University economist Chris Sarlo. You can't reduce poverty if you don't know how much of it there is, or who precisely is poor.

"We've only been waiting for decades for an actual clear, concrete plan with measures and with accountability and with timetables. It's so long overdue it's laughable," Sarlo told The Catholic Register.

Sarlo is the academic behind the conservative Fraser Institute's controversial deprivation index, which claims to measure poverty in absolute terms. It counts only those who cannot afford such necessities as food, clothing and housing, and comes up with a poverty rate about half that of most academics and anti-poverty groups who use the Statistics Canada Low Income Cut-Off as a standard poverty line.

Using a deprivation index, Sarlo shows poverty in Canada trending downward over the last 30 years with spikes upward during the recessions of the early 1980s and mid-1990s. The LICO index shows no such trend, and Canada's after-tax poverty rate remained high at 10.8 per cent in 2005. Sarlo's index pegged poverty at 4.9 per cent in 2004, or about 1.6 million Canadians.

Sarlo argues the LICO doesn't measure poverty, only relative inequality of incomes. Statistics Canada has firmly declined to call the LICO a poverty line since the late 1960s.

"Most people do have an absolute definition in mind when they think about poverty," Sarlo told The Catholic Register. "They're not talking about so many children are unequal. They're talking about them hungry and ill-housed."

But how children stand relative to the general economy and culture matters, said St. Paul Catholic School principal Barry White.

"There are some kids who fly off to Mexico during the March break and they will come back with all kinds of enriching stories," said the elementary school principal in one of Toronto's poorest downtown neighbourhoods. "These kids will sit in apartments for the summer or March break. They don't have those things."

The good news is that public institutions, especially education, can help level the playing field.

"Research has shown that good teaching can make a bigger difference in low socio-economic areas than other areas," White said.

If the government is looking for ways to measure poverty before starting to reduce it, they don't need to reinvent the wheel, said Campaign 2000 Ontario co-ordinator Jacquie Maund.

"There are measures already out there that can be used," Maund said.

Statistics Canada produces the LICO, the Low Income Measure and a market basket used to measure inflation relative to family spending.

"Any one or all three of those measures could be used to measure progress over time as an income measurement," said Maund. "If the government also decided to use what's called a deprivation index that measures poverty in terms of things that low income people don't have access to or don't have, that would be another route that could be followed."

The critical questions aren't which measure is used but what the government will do about poverty, and how quickly, said Maund. Better schools can make a difference, but it takes a generation or more.

"People are struggling right now to make ends meet," Maund said.

Campaign 2000 wants to see reforms to labour legislation so temporary and contract workers have more income security, a more aggressive rise in the minimum wage to $10.25 an hour immediately, plus increases in welfare rates that make up for the 25-per-cent cuts of 1995. Like other anti-poverty groups, Campaign 2000 wants Ontario to commit to a 25-per-cent reduction in child poverty in five years and 50-per-cent in 10 years.

Better social programs need not and must not come at the expense of economic growth at a time when the general downturn in manufacturing and the likelihood of a U.S. recession looms, said Canadian Council of Chief Executive Officers spokesperson Ross Laver.

"To support enhanced social programs, which we would certainly favour, you need robust economic activity," Laver said. "That's the problem Ontario has right now. It's finding itself looking less and less attractive."

A cut in corporate tax rates and harmonizing provincial sales taxes with the GST is part of a poverty reduction strategy because lower taxes for corporations will drive more investment, and more investment will result in higher tax revenues for the province, said Laver.

"We wouldn't suggest for a moment that it's a kind of Laffer Curve – a simple case of cut taxes and therefore more businesses pay taxes and therefore revenues go up. It's much more complicated than that," he said. "But the reality is that we all benefit if there are more jobs created."

Figuring out poverty goes beyond economic theory, said Maund.

"Addressing poverty is an economic issue. It's also a moral issue," she said.

"It's unfair. Our children deserve better. They deserve a chance," said Duffield. "It's a moral issue. Why is this happening? It's Canada and it shouldn't be."

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