Is Poverty Increasing or Decreasing?

According to an Angus Reid survey, “Canadians generally think the number of people living in poverty in their communities is increasing.” More than 50% indicated they see poverty being on the rise, compared to 9% who think it is decreasing. That’s the perspective of ALL Canadians surveyed, not just those living below the Low Income Measure (LIM). I realize that this perspective is subjective, but so are the measures that professionals come up with (none of them are poor, I imagine) that identify who is poor and who isn’t.

Contrast this perspective, supposedly based on “lived” experience, with the following chart from the Edmonton Social Planning Council’s 2018 Tracking the Trends:

The chart indicates things are getting better, according to Stats Canada, which is represented in the chart used by the ESPC.

The Angus Reid Survey takes a different approach than associating data with a set Low Income Measure. It asked respondents to indicate the kinds of financial stresses they have experienced. Here are the results:

One might conclude that the percentages are somewhat low on a case by case basis, but keep in mind that the large majority of these items are about basics – paying the rent/mortgage, paying utilities, buying good food, and so on.

Angus Reid indicates that 16% of the population is “struggling” financially, which is defined as experiencing at least four of the above stresses in their life time and regularly experiencing one of them all of the time. This percentage most likely includes the 10.5% of the Edmonton CMA population experiencing poverty, but the emphasis is on “struggle” not on a poverty line.

The survey also identifies that 11% of Canadians are living “on the edge,” meaning they have experienced three of the stresses in their life time, though they experience them less frequently than those struggling. In part, this data coincides with annual surveys done by the Canadian Payroll Association that indicate up to half of Canadian workers are living pay cheque to pay cheque, though note that a good portion of these workers likely are present in the next paragraph.

A third category identified by Angus Reid are those who are “recently comfortable”  (36%), which means in their life time they have experienced at least one of the financial stresses, but in most cases not for some time. While these stresses may not be recurring, this group experiences “tight” money. Their financial comfort might be seen as somewhat tenuous and not as strong as the next and final category.

The final category are those who are “always comfortable”(37%). Basically, 92% of these folks have never experienced any of the 12 financial stresses in their lives. For the remaining 8%, their financial stresses tend to be about having expendable income for entertainment and non-essential purchases, but are able to consistently meet their basic needs.

With these four categories in mind, take a look at the following table:

at least according to those who measure poverty like Stats Can, though I bet you a dollar none of them live in poverty. In the Edmonton CMA, 10.5% of the population live below what is called the Low Income Measure. That’s more than 130,000 people; that’s twice the population of Red Deer. But is it accurate? Is the Low Income Measure (LIM) accurate? Could the measures we use to measure poverty be biased against people living in poverty? After all, isn’t it professionals who live above LIM who determine such measures? Aren’t they the ones who set the minimum wage and the living wage? Is it not them who come up with subsidies and programs designed to “help” the poor?

I am biased, too. I have had the sense for quite a few years that poverty is getting worse, that wealth building is  much more the aim of the economy than is designing an economic system that the majority of Canadians experience equitably. My bias includes a good dose of cynicism about the living wage movement because its system of measuring what a living wage is in a community is based on the persistent Have-Have Not mindset that guides the identification of such a wage.

In the context of a “living wage,” what does “living” mean? Apparently for some of us, living includes being able to plan for retirement, save for one’s children’s university tuition, manage debt, buy a home, have sufficient monies for emergencies and life-long learning.  But not so for those who might actually earn a living wage, though keep in mind that nearly 140,000 employed persons, according to the ESPC, earn less than the $16.31 living wage. That living wage is based on what it would take a family of four with two parents working to, I assume, have a life.

Again, these two parents won’t be able to save for university tuition, are discounted from ever owning a home or an adequate retirement fund. Their income will be bolstered by the Child Tax Benefit as well as other federal and provincial benefits for low income folks. Apparently those benefits are valued at $1.05 per hour because the living wage for these two parents was $17.36 a couple years ago, before the Child Tax Benefit came into effect.

Two things about that benefit. First, it will raise hundreds of thousands of Canadians out of economic poverty, a good thing. Second, the benefit drives the living wage down and serves as an indirect subsidy that allows employers to keep wages low, assuming employers want to even pay as much as $16.31 per hour. According to this chart, many employers don’t pay that much.

 

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