Newspeak on poverty

Duelling poverty lines offer no comfort to poor kids but generate good PR for governments

Analyze this: with Richard Shillington

  New official federal government measures of poverty provide the latest example of government's increasing control over science.
  Science and politics can not help but be uncomfortable bedfellows. Science, at its best, is the objective unfettered pursuit of knowledge and understanding. Politics, at is worse, subjugates knowledge to the pursuit and retention of power. Examples? Mad Cow disease, Meme breast impants, tainted blood, bovine growth hormone, Westray mines, Walkerton water, etc.*
  Objective science struggles for air under government, university and corporate 'partnerships'. A recent Globe and Mail article reminded me of a-bomb inventor Robert Oppenheimer, who shared his anguish with Harry Truman about the bomb. Truman scoffed that Oppenheimer had only built the bomb, "I'm the guy who fired it off."
 

The government admits its Market Basket Measure reduces poverty immediately by about a third - without improving the standard of living of a single child

  New poverty measures proclaimed recently by Human Resources Development Canada (HRDC) provide a recent example of the dominance of politics over science.
  Frustrated with how poverty lines make them look bad, the provincial Social Service ministers directed their officials to create a poverty line more to their liking.

What is poverty?
  There is no consensus on the definition of poverty. The classical economist Adam Smith said it well - "poverty is a lack of those necessities that the custom of the country renders it indecent for creditable people, even of the lowest order, to be without."
  So the poverty debates boils down, following the reasoning of this icon of free market thought, to - not a debate over incomes - but over what is indecent. Various existing poverty measures depend on different perspectives on decency. They range in increasing generosity from the Fraser Institute, to HRDC and Statistics Canada.
  The Fraser Institute's Basic Needs Measure reflects that organization's perception of decency. To the Fraserites, our obligation to the poor is limited to physical necessities. It excludes 'non-essentials' like books, toys, hair-cuts, dental services and school supplies. Their weekly food budget for a single elderly female is presented. The entertainment value - 14 servings of fruit for $2.11? - is muted by its acceptance so unquestioningly by many politicians.

Minimum Weekly Food Costs: July/August 1988 (single elderly female)	Servings	Cost
Milk	14	$2.23
Meat	14	$8.84
Vegetables	17.5	$1.33
Fruit	14	$2.11
Bread	56.63	$2.10
Margarine	35	.79
Sugar	17.5	.06
Total Calories	12,600
Total Cost		$17.48
Source: Poverty in Canada; Christopher Sarlo; Fraser Institute

  Is this poverty? I guess, to use Smith's words, it depends on your sense of decency.
  Somewhat more generous, HRDC's Market Basket Measure defines our societal obligations based on a "basket of goods" the department's experts judge sufficient for the poor.
  This is fair enough until HRDC decided that the basket should not depend on Canadian norms. HRDC divined that their poverty measure will be "designed to be sensitive to the changing consumption opportunities of those at the lower end of the income scale, not to what is happening to general living or consumption standards."
  There you have it - the basket of goods which HRDC judges 'decent' for the poor will not depend on what Canadians take for granted. What does this say about 'equality of opportunity' for children? It's sounding like an old-fashioned idea. Perhaps next we can recommend segregated schools so that poor children won't feel out of place.
  HRDC's approach acknowledges that children living on their budget will feel excluded from Canadian society because there will not be funds for things that many Canadian kids take for granted, like vacations and school field trips. Children living at the government's line will, over time, fall progressively further behind the Canadian norm, but will not officially be poor.
  HRDC promises that the basket will be adjusted when they think necessary. How secure should the poor feel that comfortable professionals will judge when the basket requires a review to again determine what is sufficient for others - 'at the lower end' - to live on?
  The poverty debate boils down to a difference of opinion on social obligations. What is 'decent', for the 'poor' - a fixed standard of living or a share of the economic pie? Should a poverty line increase to reflect prices only, or should it increase with average standards of living?
  This fundamental political question has been decided for us. The Minister's political instruction to HRDC was clear - the poverty measure will be "related to changes in costs of consumption rather than changes in income."
  Is the adjustment to average incomes, instead of prices, important?
  Recent experience with Statistics Canada's Low-Income Cut-Off (LICO), would suggest yes. That measure is increased, not only to reflect inflation but also to reflect real economic growth. The LICO has been increased by about 46 per cent to reflect increases in the standard of living over the last 20years.
  What if we had been increasing the low-income measure for prices only? Then we would today be assessing poverty today based on the average standard of living from 20 years ago.
  The government admits its Market Basket Measure reduces poverty immediately by about a third - without improving the standard of living of a single child. But this is only the starting point. Each year the spread will grow between a poverty measure, adjusted for prices only, and one adjusted for average income.
  Social Service ministers who set the minimum wage and the levels of support for welfare recipients have now created a political measure of poverty. Clearly they will be in the enviable position of reducing poverty rates without the need to yield a greater share of our wealth with the poor.
  You don't need to a relative measure to see increasing poverty in Canada. Take the time period from 1989 to 1997. The number of children living in families with incomes below $20,000 (in 1997 $'s) increased by 27%; thus even the number of children falling below this absolute measure is increasing. Not only do we have more children living below $20,000 we also have greater income inequality. The number of children living below the LICO, which increases with average income, increased by 43% (Campaign 2000 www.campaign2000.ca).
  HRDC has now given us a new measure of 'low-income' more generous than the Fraser Insitute but less so than Statistics Canada. So the poverty debate is one more example of science - here economic analysis - coming under the purview of politics.
  The role of science in politics is currently contested as we struggle with how to square objective science (and the public's right to know) with a politician's desire to control information.
  Recall that Oppenheimer's conscience struggled with his contribution to the arm's race. Actually he arguably worked in more open times. It was before the 'spin' replaced science in government proclamations and before partnerships between corporations, universities and government usurped the 'public interest'.

Richard Shillington, Ph.D., is a statistician who specializes in the quantitative analysis of health, social and economic policy.

*Want more? See the Honesty in Government section of my web-site or my recent paper on the Child Tax Benefit.

Posted: March 05, 2001

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