Tuesday, 9 February 2016

Poverty study head scratcher

Some days I scratch my head. I did that recently when I read that according to the Fraser Institute, a Canadian business think tank, poverty in Canada was declining and that only a very small portion of the Canadian population was stuck in poverty. Poverty, they said was a transitory state.

Really? That’s not what I have seen in Grey Bruce.

The Fraser Institute went on to say that “The root causes of poverty are complex and varied, meaning the solutions for how best to provide assistance are also likely to differ. Simple proposals, such as increased cash transfers, may not help particular groups and could, in some cases, be detrimental. For instance, cash transfers could be detrimental for someone who is suffering from a drug or alcohol addiction if they use the additional monetary resources to feed and reinforce their addiction. If the addict’s problem is maintaining stable employment, the cash transfer does not necessarily help their situation.”

Experience in Canada says something very different. In Dauphin, Manitoba in the 1970's a five year experiment of increasing cash transfers to the bottom 30% of the population by income helped improve the quality of life significantly.  No, people with that additional money didn’t go sped it on booze and cigarettes. In fact, between 1974 and 1979, the community’s population who did received cash payments found more useful things to do. That went to school, improved themselves and became more active. As a result, doctor and hospital visits declined, mental health appeared to improve, and more teenagers completed high school.

Recently I read a Statistics Canada analysis of people on low income in Canada. The Fraser Institute is partially right in that low income is indeed transitory. Statistics Canada says that one third of those in low income have moved out of the category by the next year. But the problem is that the number of people dropping in income is the same as those entering. In other words, there are still a lot of people moving into poverty at the same time people are moving out. We need to find out poverty and reduce it or stop it, not minimize the reality of poverty.

Another concern in Canada is that the richer are getting richer. They are. Statistics Canada says that After Tax income rose among the wealthiest in Canada by 37% between 1989 And 2013. Among the lowest income? After Tax income rose just 9%.

This is why we need a tax system which evens out those differences and a minimum income system to bring up the wealth and health of those on the bottom of the income pile. The nonsense that giving tax breaks to the wealthy will allow them to create jobs has been thoroughly discredited. The wealthier simply get wealthier.

We need to be cautious of the arguments the Fraser Institute is selling. They are based in stereotypes and selective interpretation of the facts. They misunderstand poverty (which is actually complex) and try to make a case for discredited stereotypes. It fails. Better for us to understand poverty and its foundational issues than try to make one size fit all. We can do better.

Rev. David Shearman is a retired United Church minister in Owen Sound and the host of Faithworks on Rogers TV - Grey County.