According to recent news reports, government financial supports for welfare recipients are decreasing. At the same time, governments are posting surpluses, doling out tax cuts to the wealthy and providing grants to profitable corporations.
A recent report finds that, between 1989 and 2005, when inflation is taken into account welfare incomes decreased by 20 per cent. In other words, a welfare cheque buys 20 per cent less now than it did 15 years ago. Payments are well below what it takes to keep a household out of poverty.
The social safety net is clearly failing those most in need. But this is no surprise. Governments have spent much of the past two decades dismantling the social safety net, opting instead for social policies that are increasingly subordinate to a market-driven economy.
Twenty years of the U.S.-inspired free market experiment have done nothing to address the needs of the poor.
A study released in June by Human Resource and Social Development Canada uses the new, supposedly more accurate, "market basket measure" of poverty. The findings for 2002, the most recent period covered in the report, confirm what other measures have been telling us for years: High levels of poverty persist; 16.4 per cent of Nova Scotians live in poverty. Women still experience poverty at a higher rate than men. For example, 58 per cent of single-parent families headed by women live in poverty.
So here we are at the tail end of a sustained period of economic growth, characterized by unprecedented levels of wealth and profits, and one in six Nova Scotians is poor.
The provincial government, meanwhile, is claiming success in reducing the number of Nova Scotians relying on income assistance. No surprise here. The decrease in recipients follows the expected pattern as the economy improved from a low point in the mid-1990s and created jobs.
But the jobs being created are, for the most part, low-wage and don’t provide a path out of poverty. Instead, many people have simply switched from being welfare-poor to working-poor. While this cuts government social assistance costs and may appeal to those who feel that the working poor are more deserving than the unemployed poor, it does little if anything to improve the lot of low-income people. In 2002, the working-poor comprised 30 per cent of Canadian households living in poverty. In Nova Scotia, while the number of welfare recipients was dropping, the rate of poverty increased between 2002 and 2003.
Low wages and low social assistance forces those experiencing poverty to rely on underfunded and overstretched charities such as food banks, and on their extended families and friends. Supporting the poor has moved from being a social issue, to be dealt with collectively through public policy, to being a personal problem for the poor.
While the free market experiment is not working for the poor, it is certainly working for the large corporations and the super rich. Corporate profits are at record levels and wealth is increasingly concentrated at the top, contributing to a polarization of inequality between Canada’s rich and poor.
How do people justify the existence of poverty in the midst of such wealth? Well, they blame the poor, of course. If the poor are poor, it’s their own fault because of the choices they’ve made, such as not working hard enough, making the wrong career decisions, not saving enough, etc. The wealthy – well, I guess they just have a knack for making all the right choices.
Blaming the poor for their poverty also enables the middle- and upper-income households to live in relative comfort without guilt or a sense of social responsibility for the less-fortunate, beyond giving to charities.
The reports on social assistance and poverty make clear that poverty is a social issue. The economy is not providing the stable, decent-paying jobs that are needed to get households out of poverty.
What can be done? We could start by making the alleviation of poverty a priority. We need to help those who are able to work to get back into the workforce through, for example, significantly increasing the minimum wage, and providing training and education opportunities and child-care services. We can, and should, end the clawback of employment earnings from social assistance recipients. And we need to increase welfare payments.
Even with full employment, there will still be people needing welfare due to illness, disability, family problems, structural unemployment, etc. The federal government also has an important role to play by allocating some of its surplus to re-establishing a Canada social transfer to provinces, dedicated to supporting low-income households.
John Jacobs is director of the Nova Scotia office of the Canadian Centre for Policy Alternatives.