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By: Richard Shillington
In 1989, a federal government all-party resolution set a goal seeking to end child poverty by the year 2000. The target date is here, and with the goal no closer, they have decided to change the rules, thereby moving the goalposts.
Human Resources Development Canada (HRDC) is promoting a new way of measuring poverty which asks Canadian low-income children to lower their expectations. Their new poverty line joins a crowded field ranging in generosity from the Fraser Institute's "Basic Needs Measure" to the Statistics Canada's "Low-Income Cut-Off".
At one extreme, the Fraser Institute's "Basic Needs Measure" estimates the money sufficient for food, shelter and clothing to keep the family alive, and is limited to physical necessities. It excludes non-essentials like books, toys, hair-cuts, dental services and school supplies. The food budget illustrates their emphasis on basic subsistence (which others have to live on); for instance, $25 per week is allotted for an elderly woman.
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No federal politician has to live on the $23,000 that many in the political elite feel is 'excessive' for a single mother |
On the other hand, the Low-Income Cut-Off (LICO), set by Statistics Canada, considers more than the need for subsistence. It compares the spending on necessities of low-income families to that of typical families. With LICO, as incomes in the mainstream rise, so does the poverty line. . This attracts the wrath of neo-conservatives because the moving lines create upward pressure on supports for low-income families.
Many in the political elite believe that LICO is just too generous. However, no federal politician has to live on the $23,000 that is considered "excessive" for a single mother.
The government's new measure - HRDC's Market Basket Measure - is an attempt to move away from the rationale embedded in LICO, and towards the Fraser Institute's way of thinking. It limits our obligations to low-income children to a particular basket of goods - not a share of Canada's wealth. It 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.
Should our poverty measure increase over time by the cost of living only, or should it also reflect increasing real wealth? How should our poverty measure react to increasing average incomes?
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The label 'poverty' is irrelevant to children; it's deprivation, and the real and perceived chances in life that matter |
Over the last 20 years, the LICO has increased, not only to reflect inflation-- but also by an additional 46 per cent to reflect changes in consumption. What if we had been increasing it for prices only? The current (1997) poverty line for a family of three in a large town is $23,213, while indexed to prices only it would be $15,864. These lower poverty lines would have reduced our poverty rate by about 50%. They would also have virtually eliminated poverty for seniors and rendered old age security increases unnecessary. Lower poverty rates would have encouraged complacency about child poverty. The government admits that 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, and one adjusted for average income.
The label "poverty" is irrelevant to the lives of children - it's deprivation, and their real and perceived life chances that matter. Low-income children have always been at greater risk of a range of dangers which we claim to be concerned about. These include low birth-weight, school problems, low self-esteem, hindered psychological and social development. These consequences will clearly remain if the government ceases to label them poor, but the impetus to address the problem will be reduced.
The poverty line should reflect social goals for Canada. The MBM will be preferred by those who see our obligation to children as a basket - like a Christmas hamper. Those who seek equality of opportunity for children will want a relative measure which compares low-income children to the norm.
The new government measure implies a new, more limited social contract. A country as wealthy as Canada is lowering its expectations not because we can't afford social supports but to make inequality acceptable. This will end Canada's traditional ideal of equality of opportunity.
Is this what the House of Commons had in mind in 1989, when it passed the unanimous resolution seeking to end child poverty by the year 2000?
Richard Shillington, Ph.D., is a statistician who specializes in the quantitative analysis of health, social and economic policy. He appears regularly before committees of the House of Commons and the Senate, and frequently provides commentaries for television, radio and newspapers on issues of taxation, human rights and social policy. Richard's Straight Goods column will appear weekly.
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