A bad time to be poor

June 1, 2003

Welfare (social assistance) is a critical element of our social safety net. It is an expression of social solidarity--one of the ways we have chosen to look after each other as members of a community. Yet in recent years, welfare has been a favorite target for many budget-cutting provincial governments.

In January 2002, the BC government announced a dramatic program of welfare restructuring, including a 30% cut to the operating budget of the Ministry of Human Resources. These cost savings are being achieved by cutting welfare benefits and tightening eligibility in ways that deny assistance to thousands of people.

The decision to restructure welfare came as a surprise for a number of reasons. First, welfare benefits were already profoundly inadequate. Prior to the latest cuts, the maximum welfare income available to a single parent with one child covered only 65% of minimum living costs. These families are now expected to make do with even less, making it practically impossible to make ends meet.

Welfare cuts were also a surprise because of their conspicuous absence from the BC Liberal campaign platform. The Liberal's New Era document said nothing about reforming or reducing welfare. When Premier Campbell was asked during the election campaign whether welfare benefits would be cut, he replied with an unequivocal "we have no intention of reducing welfare rates."

Third, the welfare cuts have been implemented during an economic slowdown, and at a time when workers are struggling with the fall-out of the softwood lumber dispute and exhausting Employment Insurance coverage. The government is not forecasting that unemployment will fall to 7.2% until 2007. Something is clearly not right. It is normal to expect welfare caseloads to decline as unemployment falls, but quite another matter to predict falling caseloads while unemployment stays stable or increases.

The greatest surprise about the government's welfare cuts is the nature of the reforms themselves. A number of BC's new welfare policies are radical and unprecedented in Canada. The new two-year time limit rule (limiting 'employable' recipients without children to two years of support during any five year period), and the two-year independence test (requiring new applicants to demonstrate that they have been financially independent for two consecutive years) in particular represent a fundamental shift in Canadian social policyuu--the denial of welfare as a basic human right.

BC's welfare policy package is also contradictory. Despite ongoing talk of assisting welfare recipients with the move into paid employment, many of the new policies actually discourage work re-entry by removing key supports. Most notable here are the elimination of earnings exemptions, cuts to child care, cuts to transition-to-work assistance (such as money for work clothes and transportation), and the $6 training wage.

The inspiration for many of BC's new welfare policies has come from the US. However, BC selectively imported only US policy 'sticks' that push people off welfare (such as time limits and tough sanctions). None of the policy 'carrots' or supports that assist with the transition to paid employment were adopted (such as increased child care, training and education, transportation assistance, and earnings exemptions). This selective importation illustrates that cost-cutting is the central objective of the welfare reform process in BC, whereas in the US spending on programs for low-income people actually increased during the post-1996 welfare reform period.

To achieve desired cost savings, the BC government hopes to dramatically reduce welfare rolls. However, measuring the 'success' of welfare reforms based on caseload drops is misguided. The true measures of success should be poverty reduction, and the associated goals of job creation and earnings growth. Instead of focusing on only caseload numbers, the BC government needs to carefully track measures of hardship and poverty--homelessness, evictions, going without food. Thus far, the Ministry of Human Resources' quarterly exit surveys fail to provide this kind of essential information.

The BC government must be prepared to abandon welfare policies that are found to increase hardship and suffering, and accordingly, to thoughtfully and compassionately reconsider its welfare platform.

Seth Klein is the BC Director of the Canadian Centre for Policy Alternatives. Andrea Long is a researcher with the Social Planning and Research Council of BC.