Mandatory Winter Tires and Poverty

Yes, perhaps an odd title for a posting, but bear with me. I was on my way back home from meeting downtown with Alberta Government colleagues who also work in the poverty reduction arena and I heard this call-in show about winter tires and more to the point about whether or not winter tires should be mandatory.

They are in Quebec now but even in some provinces without a mandatory requirement more than 80% of drivers have winter tires. Not so in Alberta where the percentage is just over 50%. Not sure about other low percentage provinces, but here is what went through my mind.

The folks that called in didn’t all agree, but I got the impression that most were for making it a legal requirement to have winter tires and my impression of the radio interviewer and guest was that they were biased toward mandatory winter tires. I get that. It makes sense, right, that all of us would require one another to do this. It’s safer. Winter tires stop a car better than all season tires.

I have never owned winter tires but could afford them if I chose to buy them or was required to, though being forced to dole out $1,000 for a new set of tires and then pay more for rims and the ongoing costs of changing and balancing each season – well, the “Albertan” in me just doesn’t want to be forced to do that.

But all of the above is not really why I wrote this post.

While I was listening to the radio show, it hit me that this radio engagement of citizens around winter tires was one more example of how a certain segment of the population is marginalized, not really considered, and in a sense relegated once again to second-class citizen. Continue reading

Income Trends and Canadian Consumer Debt

Over the past 15 years Canadian consumer debt has risen dramatically.  Since 2000, the percentage of Canadian debt in relationship to disposable income has risen from 110% of income to about 165%. The change in debt to income ratio represents a 12 year increase of 50%.

Income to Debt

The old adage about “people should live within their means” has validity no doubt in many cases, but such maxims simplify the complexity of economic influences and impacts and in this case categorically blame individuals for their debt problems. It’s akin to telling people living in poverty to just buck up and get a job. Stop being lazy and all of that.

Does rising debt have a correlation to slow if any growth in income for Canadian workers? The chart that follows tells a disconcerting story about after tax income in Canada by three cohorts: the top 20% of earners, the middle 60%, and the bottom 20%.  The chart goes back much further in time than the chart above and ends in 2011, but the trends are very clear.

incometrends2

From 1976 the trend in after tax income growth was about the same for all cohorts. In the latter 1990s, however, things changed. Income for the top 20% has escalated quite markedly since then, whereas income growth for the 60% middle earners and the bottom 20% have been small at best.

As the majority of Canadians have experienced flat to very small growth income over the years, they have also experienced far more growth in the expenditures required to house themselves, feed and clothe their families, and so on.

In Edmonton, where I live, the cost of rental accommodations increased on average by 75% between 2000 and 2010. Incomes for the large majority of city residents did not experience such gains. Add rising costs of food over that same period of about 5% per year on average, and the income to expense challenges are obvious.

pullquote1The more one spends to survive, the less likely it is that they will save for a rainy day, much less for retirement or even a short vacation. This contraction on disposable income creates vulnerability for people. When faced with a family emergency or job loss, even job loss for a short period of time, the options are few. Using one’s credit cards are among the few options available.

The Canadian Payroll Association has done annual surveys for a number of years and each year the results indicate that between 45 to 50% of Canadian workers are living pay cheque to pay cheque. The loss of a job to them would, according to the Association, result in serious threats to maintaining their housing. This suggests that half of Canadian workers, while not necessarily qualifying as living below the poverty line while employed, are economically vulnerable to disaster should their pay cheques be lost or interrupted, even for a short period of time.

There are other life experiences that lead to unmanageable levels of consumer debt. Divorce plays a role for many, in particular women who leave the relationship with children to care for, and all too often insufficient, if any, child support. Add to this that the majority of women earn less income than men and we end up with single parents financing their transition from marriage to single parenthood with debt.

Health problems can exacerbate debt as well. Temporary absences from work for surgery, for example, plus recovery time add to the fray. Even those with health and short term disability benefits experience reductions in income during those periods of time. And those without any such benefits are left without any supports from their employer. In Ontario, for example, one-third of workers do not have extended health and dental benefits, according to the Wesley Institute.

Of course debt problems are also caused or at least magnified by a lack in money management skills and other aspects of financial illiteracy. Increasing knowledge and skill about money should be attended to, but to think financial illiteracy is a panacea answer would be both impractical and irresponsible.

Rising consumer debt is not just an economic problem in and of itself. It is part of an overall pattern of systems and values that work to keep worker costs as low as possible to order to drive up margins and that fosters and sustains discriminatory practices that stymie participation in the economy by women,  visible minorities, Indigenous people, the disabled, as well as older and younger workers.

As a general rule unemployment rates and levels of income are higher in the former and lower in the latter for these populations. How come? Do we really believe that such populations do not measure up to the mainstream of the workforce in terms of skills, experience, and work ethic?

There is an irony in all of this. While there is a tendency to blame individuals for accumulating unmanageable debt, our economy is based on growing profits and to do so products and services are pervasively and unrelentingly marketed to grow sales. Persuasive advertising is fundamental to such growth in profits and it tends to work, resulting in too many people purchasing what they want more so than limiting themselves to what they need. In other words, one could argue that we are happy when a sale is made but then critical of those who grow their debt because the advertising worked.

We are seeing progress in addressing some of the factors mentioned above. There is a growing and welcome trend across the nation around employers paying a living wage. For many workers, especially those that have employer-based health and dental benefits, this will make a difference. Paying a living wage is connected to paying a fair wage, but on its own the living wage movement is a partial answer. For example, the cost of living for a single mother with two young children will more times than not be far greater than an increase in income brought about by a living wage.

If we want to turn the tide on economic vulnerability and poverty in Canada, we need to act on the income problem systemically. Child Tax Credit payments are helping and do lift many out of poverty, but for too many the transfers are insufficient.

Canada’s universal health care system is not really universal. For example, unlike many if not most countries with universal health care, we lack a national pharma benefit. Without employer-based benefits, the cost of medications can mean that Canadians are not able to buy them, which eventually leads to higher public expenditures on hospitalization for acute and chronic care. Add to this mix the dramatic trends in length of life, one has to wonder how a rapidly growing number of senior citizens living into their 80’s will be able to manage their health care costs without a pharma plan.

pullquote2Tax reform has a place in the changes we need to make, but on its own is not the answer either. While it seems reasonable for the super-rich to pay more taxes and have less access to opportunities to avoid taxation, the bigger challenge has to do with how governments see priorities, how they decide to spend our money. Systems change that doesn’t address this will be hard pressed to effect substantive change.

Attitudes and values need to be assessed as well. There is an emerging movement to consider human rights in our economic and social decision making. If in a democracy we believe people should be treated equally and have at least equitable opportunities to participate in the economy and in social living, what are the human rights that should guide decision-making?

Our systems appear to place more value on those who are working and doing well than on others who are struggling or who for a variety of reasons cannot work at all (e.g. the mentally ill). While there is a general acceptance that governments should provide income security programs for those who are between jobs or who can’t work at all, there is little, if any, justification for the inadequate financial benefits these income security programs provide. Across the country, at least from what my own research has uncovered, income security benefits do not come close to what it costs to be alive in Canada.

There is encouragement to be found in governments that are exploring a Guaranteed Minimum Annual Income as well as adopting living wage policies and practices in their own shops, but if we carry the same sentiments that keep current benefits far lower than what is reasonable, then I fear a GMAI, for example, will fall far short of the mark. Program changes unaccompanied by a shift in values will at best produce inadequate progress.

While there is a growing understanding that poverty is not just about money, let’s be careful that we don’t step away from the undeniable impact that a lack of income has on people’s lives. The millions of Canadians living on low and unstable incomes may benefit from more social inclusion or subsidized public transit or free passes to recreational facilities, but such programs, although welcome, will not turn the tide of the biggest most pervasive aspect of living in poverty, which is a lack of sufficient income to survive, much less thrive.

Across the country, local communities are taking charge of poverty reduction and this is exactly where such leadership should come from. Local economic reforms are possible in local communities but without addressing national and provincial systems that work to marginalize people of low income and keep them poor, we won’t win the battle. Which is another way of saying, despite our progress, we have so much left to do and we need to foster ways to improve our systems together, across all sectors.

RESOURCES
Vibrant Communities Canada

Time to reframe poverty reduction as matter of rights (Maytree)

Living Wage Canada

Canadian household debt soars to yet another record

Canadians living paycheque to paycheque, especially in B.C. and Ontario, survey warns

Canada needs a national pharmacare plan: Editorial

 

I am angry about poverty

As long as poverty, injustice and gross inequality
persist in our world, none of us can truly rest.
– Nelson Mandela                        

I have been doing research for a keynote I am doing next month on the socio-economics of poverty.  I am speaking in Revelstoke, so I took a look at the welfare rates in British Columbia.

There, if you are a single person deemed employable your income support “benefit” is $605 per month and the government’s website indicates this has been the rate since 2007.

To be clear, that’s the total. It’s broken down into two segments: $375 for rent and $230 for food (and everything else). It’s not clear to me if a single employable person also gets a bus pass over and above that amount, but I am hedging my bets against it.

If you are single parent with two young children, the benefit is $660 for rent and $401.16 for everything else. That’s just over a grand for three people, which I found disconcerting to say the least, but you know what? That 16 cents made me angry.

I imagine there is a formula used to figure all of this out and that the powers that be didn’t want to round the number off. Perhaps they felt that a single parent and her two kids should get every penny coming of what can’t come close to supporting them. It felt like a slap in the face.

I won’t go through the motions here of comparing these benefits to the cost of housing and food, clothing, and household incidentals. We have done math like that for as long as I can remember and despite our analysis, people still are suffering from what I call “our ”economic indifference.”

The indifference has its excuses: Governments can’t afford paying any more. Poor people are lazy. She should have not gotten pregnant so young. It’s his fault; he’s an ex-con. Oh yeh, there’s the “drunk Indian” expecting “another hand-out” and they should have stayed in their own country. Why should I have to pay taxes so they can just lay about.

Yep, lay about on $605 per month.

We don’t want people to receive so much money, they just live off the taxpayer and don’t look for a job. Let’s give them far less than it costs to live.

Sure, that will motivate them.

I know. I am being sarcastic. Venting a bit as well.

I swear I could write an excellent, professional brief on how the welfare rates in British Columbia (and in every other province most likely) perpetuate poverty and despair. I could point out how many rules and hoops one has to navigate is not only unnecessary, but also demoralizing, inhumane. But not now. I will save that stuff for my speech.

Right now, I am just angry. Angry about poverty and its myriad systems, rules, and formulas. So angry that I don’t know what to do.

Do you ever feel that way?

Not just sad, but angry. Angry that poverty exists.

Perhaps this anger resides on the extreme end of my compassion for people. Perhaps it is that feeling one gets when a loved one is harmed by another.

I wrote this because I needed to accept this emotion, welcome it as one might an unwanted visitor, tentative but open to what may be possible.

I am angry about poverty and about our many “solutions” that are from what that word means.

I also wrote this because I have to believe you get angry, too.

And I wanted you to know: you are not alone.

 

A very short treatise on the wealth gap

Pretend.

There are 300 people in the world.

180 are workers.

The rest are children, seniors, and stay at home parents.

The economy generates $5 million per year in wealth.

That averages $27,777 per worker.

However…

90% of the wealth is owned by 20% of workers.

In other words…

36 of the 180 own $4.5 million of the $5 million in wealth.

The remaining 144 workers divide up the $.5 million.

I don’t really need to give you comparative averages, right?

Yes, I understand economics might be a tad more complicated than represented here in my short treatise on the wealth-gap; however, I am just trying to point at something that is rather disconcerting, not prove a theory.

Of course many will say that wealth of the few benefits everyone, that the economy requires this kind of divide. But this is not about a few providing benefits to a whole bunch of the rest of us.

It’s about living and expecting that our economy actually is ours, equitably.

Okay, you can stop pretending now.

What’s wrong? People are suffering.

I never understood “don’t shoot the messenger” as the stereotypical retort the messenger must use to defend her delivery of a message. Maybe we need a new cultural utterance like “You know how the messenger shoots those who don’t listen.”

Sometimes the message is actually a question, albeit unsettling in that the inquiry is unanticipated or more often, unwanted. We tend to prefer questions we can answer from our current inventory of answers. It allows us comfort and stability.

Even when we craft something new or design an innovation, all too often we end up creating newly painted replicas of what we say we are changing.

Nevertheless, the human condition is not a singular reality. It is rife with influences and contradictions and the unexpected.  This is why our affinity for comfort often rules the day. Truly changing what we do invariable means changing how we think and how we behave.

Remember that old story about the frog and the boiling pot of water. If you throw the frog in he will jump out, but if you put the frog in cold water and then turn on the flame, he won’t realize his fate until it is too late. To maintain our stasis, our comfort, we have the ability to adjust our comfort zone to small changes, but if we wait too long, we may face a challenge we can no longer meet.

In that story, we are the frog and the water is the environment we have created and that, if we are honest, we want to simultaneously change and sustain. Change is good until it enters our room, enters our space and says, “Your turn.”

There are thousands of people devoted to ending poverty and homelessness. As much as has been accomplished, each day more people show up in need of — and deserving of — a better life than they are living.

Too many people live in poverty. And there are many more living pay day to pay day, existing on the edges of poverty and homelessness. Living on the edge of disaster and the spiral down to despair that tends to grab hold of the vulnerable.

Too many jobs are insecure, pay less than a person requires to live on, and offer no benefits, nothing for the health and wellness of their employees. I know. Some businesses can’t afford benefits or living wages, but there are many who can afford it, but choose not to.

There are so many social programs in our communities taking care of poverty for the rest of us. They feed the hungry, give away clothes, and let the homeless hangout in drop in centres. We need them. There are so many people who need these programs. It’s sad, don’t you think?

It makes me mad sometimes.

Not just about all the bad things we have done in the past to the disenfranchised. But also about right now and how we – I mean all of us – choose to not do enough to end the suffering.

I am not saying we don’t do a lot. I am saying we don’t do enough. You see, the problem looms so much larger than our current efforts can address. This vast divide between problems and their solutions is not going to be addressed by funding reform, logic models, more collaborations, or even world class innovations.

Collective Impact initiatives (i.e. large scale community collaborations) may have promise, but not if we bring the same old  mindset to the common table.

I believe we have to turn the tables when it comes to addressing the deprivation and suffering experienced by so many people in our communities. We tend to refer to such things as “social problems” and then we use terms like that so frequently, they become generic representations of something vague and elusive. Now what exactly what was it anyway we were trying to fix?

People are suffering.

They are next door, around the block, standing behind you at the pharmacy. They go to school with your kids. They wear the clothes you gave away. They are co-workers. They sit on park benches. Everywhere.

People are suffering, everywhere.

I know it sounds melodramatic to use words like “suffering.” We prefer words that are not so provocative, and of course easier to accept. It’s much easier to talk about issues and problems and gather around terms like “social inclusion,” “best practice,” and “developmental evaluation.”

People are suffering.

The hungry girl in school trying to stay awake is suffering.

The old man having delusions on the street corner is suffering.

The mother with two young children beaten by her husband is suffering.

Being unable to buy your child medications causes suffering.

The drunk man begging for quarters outside the 7-11 is suffering.

The teen-age girl raped by her father is suffering.

Those who live daily with racism and discrimination are suffering.

This is not just about poverty as defined as a lack of money or as a social problem  costing society billions of dollars. It’s not just that the homeless guy flying on crack is a pain when he swears a blue streak at us as we walk by. It’s not just about the unpleasant aesthetics of ragged clothes, grocery carts full of cans and bottles, and vomit in the middle of the sidewalk.

It’s about human beings being deprived of their humanity.

And that’s wrong.

It’s wrong that so many people in our community are suffering.

It’s not just wrong for them; it is wrong for all of us.

Before we label all of this as a complex social problem, let’s start with it’s wrong.

It’s wrong.

And we are all a part of why it’s wrong.

Until we accept that, all of our plans and programs, all of our collaborative designs, all of our policy reforms, all of our actions, no matter how deeply we believe in them, will keep us from fixing what is wrong.