Brar and Raise the Rates managed to attract a fantastic amount of media attention, and sparked a much-needed and long-overdue public conversation about the inadequacy of welfare benefit rates. Simply put, the MLA on Welfare initiative was a huge success and fantastic public awareness exercise.

Such public awareness matters. Opinion polling we at CCPA commissioned a few years ago found, for example, that British Columbians, when asked cold, are generally split evenly on the question of whether welfare rates should be increased. But if the question is prefaced by simply telling people what rates are, support for an increase jumps to three-quarters. Meaning, when people move past the myths and learn the reality of how low benefit rates are, and how hard life on welfare actually is, they don’t like it. That’s good.

While most of the coverage of Brar’s month was sympathetic, a few negative voices were heard. In particular, the Minister responsible (Stephanie Cadieux) and the Fraser Institute made a number of media interventions in defense of BC’s abysmally low welfare benefit rates. Their comments indicate they truly need to get out of the office more — they simply have no understanding of what life on welfare is actually like.

Among the key points made by the Minister and Fraser economists was that we needn’t worry about the $610 basic rate, because a majority of welfare recipients receive more (either because they have children or a recognized disability), an amount they deem “adequate.” It’s true that most welfare recipients get more than the basic rate, but calling those rates “adequate” is way off the mark.

As the National Council of Welfare notes, those on welfare with children and those with a disability still live thousands of dollars below the poverty line. And extensive research conducted by the CCPA (a study I co-authored called Living on Welfare in BC, which followed real people on welfare over a two year period, rather than just pondering numbers as the Fraser folks have) found that even those in receipt of the higher (supposedly “adequate”) rates were still frequently reliant on food banks and other charities to meet basic needs.

Indeed, we found low rates often force people to make destructive choices – such as remaining in abusive relationships – that are harmful, and for which we are all paying.

Adequate? The family welfare incomes don’t even reach the Fraser Institute’s own thin-gruel poverty line – a line that is itself significantly lower than every other low-income measure produced in the country.

The government and Fraser Institute maintain they don’t want welfare to be “attractive.” Well, we are a long way from that. The reality is that life on welfare is a day-to-day struggle in which all one’s time and effort is spent merely meeting basic needs for food and shelter, which ironically makes it harder to find work.

If Brar’s month-long experiment teaches us anything, it is that rates need to be substantially higher, and that we need a better – more rational as well as compassionate – way to set welfare benefit rates. That’s just what Steve Kerstetter proposed in his 2006 CCPA-BC policy paper A Better Way to Set Welfare Rates. It is unconscionable that governments are content to hold welfare rates frozen year after year, as inflation eats away at the real value of a welfare cheque. And currently no clear rationale guides the setting of rates. Instead, rates should be tied to the actual costs of basic needs (ensuring that shelter, nutritious food, clothing, transportation, and other core needs are affordable) – something that is clearly not the case today. And then benefit rates should increase annually in line with inflation.

First, over just over 100 candidates have responded to the Open Letter issued by the Living Wage for Families campaign, covering almost every Lower Mainland municipality. Almost all have expressed support for this proposal or at least indicated interest in exploring the implications for their city.

In Vancouver, COPE has said it is supportive of undertaking a city study to investigate the feasibility of passing a living wage policy. Vision Vancouver and the NPA are a little more cautious, saying they are interested, but want to find out more before deciding how to proceed.

In Burnaby, both main parties have expressed a clear interest in exploring the possibilities of a living wage policy. Both Richmond and Surrey have a number of candidates running on a living wage platform, while the City of North Vancouver has already unanimously agreed to study this issue.

In the outer suburbs of Maple Ridge, Pitt Meadows and Coquitlam a large number of candidates have expressed an interest in pursuing this issue.

You can see all the candidate responses here.

Second, today our friends at the Columbia Institute Centre for Civic Governance released some very interesting poll results related to the municipal elections. Among the results: 67.1% of respondents asked about a Living Wage said they would favour their municipality adopting a bylaw. You can read more results here.

Hopefully we will see new activity on this front after Saturday.

This is the question I investigate in my latest CCPA report The Cost of Poverty in BC. If you’re not in the mood for reading the report, you can watch a short video that summarizes the findings here.

Study after study has linked poverty to poorer health, lower literacy, more crime, poor school performance for children, and greater stress. In this report, I use the statistical association between poverty and these negative outcomes documented in the research literature, and combine this information with estimates of the costs these outcomes impose on government finances and on society at large.

My findings confirm what we’ve already suspected: poverty comes with a very high price tag. The cost of poverty to government alone is estimated to be between $2.2 to $2.3 billion per year. The costs to society as whole is $8.1 to $9.2 billion annually. That’s a lot of money – close to 5% of the total value of our economy.

The study focuses on two types of costs in particular. First, I quantify the societal resources devoted to tackling poverty’s negative consequences. These include the health and crime-related costs of poverty. Second, I capture the economic value of foregone economic activity and lower productivity that are associated with poverty. BC isn’t using all the talents and productive potential of its citizens who live in poverty and this acts as a drag on our economy. These costs are what economists call “opportunity costs:” they do not represent resources we’re actually spending now but rather resources that would become available to society if poverty was significantly reduced or eliminated.

The methodology is based on a landmark Ontario study, The Cost of Poverty in Ontario: An Analysis of the Economic Cost of Poverty in Ontario. The Ontario project was a collaboration of a number of prominent business economists and researchers, who developed a systematic way to account for the monetary cost of poverty both in Ontario and in Canada as a whole. The advisory team included then TD Bank Senior Vice President and Chief Economist Don Drummond, Canadian Policy Research Networks Senior Fellow Judith Maxwell, among others.

Here is how the cost of poverty in BC breaks down:

Note that these estimates do not capture all of the costs of poverty. Notably excluded are the costs that child poverty imposes on future generations by perpetuating the cycle of poverty. I also do not measure many of the less tangible costs, such as the impact of high poverty levels on social cohesion and our feelings of safety in our communities. The direct cost of providing frontline social services to those in poverty are also not counted.

Poverty takes an enormous toll on the people who experience it. On this basis alone, we must do better than having one in nine British Columbians in poverty (the highest poverty rate in Canada).

The high costs of poverty in BC should make us all concerned about poverty for additional, purely economic reasons. It makes more sense to tackle poverty directly than to continue bearing the costs of its consequences.

The best way to do that is with a comprehensive poverty reduction plan that contains clear targets and timelines for reducing poverty. A plan is needed to focus government efforts and ensure that different initiatives are coordinated and build on each other. Seven Canadian provinces and two territories have such plans or are in the process of developing them. BC should be next.

In an earlier CCPA report, we estimated that the cost of a comprehensive, poverty reduction plan in BC would cost $3 to $4 billion per year when fully phased in. This may seem like a lot of money in a slow economy, but it’s an investment in a better, more prosperous future for BC.

With an aging population starting to retire and a looming skills and innovation shortage, the real question is not “Can we afford to reduce poverty?” but “Can we afford not to.”

With our minimum wage frozen at $8 per hour for nine years and three months now, it was about time!

The real questions in play now are how much to raise the minimum wage and over what timeframe. Different numbers have been thrown around in the media — anywhere from $9 per hour to $10 per hour immediately, with future increases up to $11 or even $12 proposed by some of the leadership candidates. Nice round numbers certainly make the math easier, but should we really be picking a number out of thin air?

In a recent piece published by the CCPA, we propose that the BC government develop a clear rationale for setting the minimum wage and stick to it. This requires making a decision about what it is that we want to achieve with the minimum wage and then setting it appropriately so that it meets the stated goals. We also recommend that the rationale be poverty reduction:

We propose that a single person working full-time year-round should earn (at least) enough to live above the poverty line. The idea that someone working full-time, full-year should be able to get out of poverty is a clear, transparent policy decision that should determine the minimum wage in BC and in other provinces.

This should be a pretty easy rationale to get behind — few people will argue in favour of maintaining a group of working poor.

Equally important is to legislate regularly scheduled increases tied to inflation, to ensure low-wage workers do not face what amounts to a pay cut as a result of rising prices.

Since poverty reduction is the goal, the minimum wage should be indexed to the consumer price index in order to maintain the purchasing power of workers.

The next question to settle would be what the appropriate poverty line measure is, and this is a legitimate question that I’d like to debated. Because I want working poverty to become a thing of the past in my province, I support picking the broadest measure of the poverty line so that no worker in any community would be left behind.

The most appropriate measure of the poverty line in this case is Statistics Canada’s before-tax low-income cutoff (LICO) for a single individual with no dependents living in a large city—which was $22,229 in 2009, the latest published LICO calculation. This is equivalent to a minimum wage of $11.11 per hour (at 40 hours per week, 50 weeks per year).

Recognizing that going from $8 to $11.11 is a big jump, I would recommend staged increases to get the minimum wage to that level.

How much can business afford? Considering that they’ve been getting reductions in the minimum wage (in real or inflation-adjusted terms) over nine years now, they should be able to manage an increase that — at a minimum — brings us back to the real value of the minimum wage when it was set. I calculate that if we had annual April 1st increases to the minimum wage based on last year’s inflation in BC starting in 2002, this April we’d be setting the minimum wage at $9.48 per hour. So moving to $10 immediately would reflect a very small increase in the real value of the minimum wage compared to its 2001 level.

A government that’s serious about reducing poverty in this province, would raise the minimum wage to $10 immediately and then commit to 50 cent increases every six months until we reach the appropriate level to cover the LICO income (note that it’s a moving target). At that point, inflation-based annual increases would be all that’s required to maintain the value of the minimum wage. Such a policy will benefit employers by providing certainty and allowing them to plan ahead for labour costs.

Setting a poverty-based rationale for the minimum wage is not the only possibility. The minimum wage can also be set with inequality considerations in mind, for example by setting it at a certain percentage of the average (or median) industrial wage in the province, and then annually index it to keep up with increases in the industrial wage. Such a policy would embody the notion that we, as a society, would not allow any workers to get too far behind the rest of us in terms of earnings.

Arguments can be made for a number of other policy rationales as well, and while I personally favour poverty reduction as a rationale I’d welcome a broad public debate on these issues. I’m curious what the leadership contenders think.

The piece highlights cuts to welfare, and notes, “One of the keenest slashers was British Columbia, which despite being one of the richest provinces has one of the highest rates of child poverty (10.4%) after taxes on family income.”

It continues:

Half a dozen provincial governments, including those of populous Ontario and Quebec, have launched poverty-reduction programmes; many include attempts to prod or help people back into work. Newfoundland, helped by royalties from oil and mining, has cut its poverty rate in half (to 6.5%). Earlier this month, a House of Commons committee urged the federal government to adopt a national strategy. The response of Stephen Harper’s Conservative administration was that the best long-term strategy to fight poverty is “the sustained employment of Canadians”. That is certainly a necessary condition, but is it sufficient? Both the government and its critics might ponder why it is that growth seems to bypass so many.

Too true.

First, last week brought news that Danny Williams is stepping down as premier of Newfoundland and Labrador. Personally, I’m sad to see him go. Rarely mentioned in the news reports last week about his record of accomplishments is the leadership Williams brought to the poverty reduction file, not only in Newfoundland, but nationally. Newfoundland’s Poverty Reduction Plan was among the most bold in the country, and it was driven by Williams himself. The one downside of the Newfoundland plan was that it did not embed specific targets in legislation. So hopefully it will remain a center-piece of the Newfoundland government after Williams’ departure.

Second, two weeks ago, the House of Commons Standing Committee on Human Resources, Skills and Social Development, and the Status of Persons with Disabilities (the HUMA Committee) released its excellent and long-awaited final report on the federal role in poverty reduction. Its core recommendation: “We are recommending that the federal government join with the provinces to introduce an action plan for reducing poverty in Canada.” This is truly an outstanding report, and managed to find all-party support on most of its many recommendations. The full report can be downloaded here. A number of national organizations are asking people to lobby the government in support of the HUMA report’s recommendations. You can find an easy way to add you voice here (on the website of Make Poverty History).

Also two weeks ago, Food Banks Canada released its annual HungerCount report (you can find it here). Food Bank use went up 5% in BC (comparing March 2010 with March 2009), and was up 9.2% nationally.

Finally, last week also saw the release of the annual report cards on child poverty. The BC Report Card was released by First Call and SPARC BC, and can be found here. BC has now had the highest child poverty rate in Canada for seven years running.

First, on Tuesday, BC Provincial Health Officer Perry Kendall released a special report entitled Investing in Prevention. The report received quite a lot of media attention. However, most of the coverage dealt with the common-space issues of healthy eating, exercise and smoking. Almost no attention was paid to two of Dr Kendall’s five key recommendations. Specifically, Recommendation 2 calls on the government to:

Recommit to early childhood development. The report 15 by 15: A Comprehensive Policy Framework for Early Human Capital Investment in BC, produced by the Human Early Learning Partnership, provides a blueprint for government to follow.

And Recommendation 3 says:

Look at those provinces and territories that have committed to poverty reduction (e.g., Quebec, Newfoundland and Labrador, Nova Scotia, Ontario, New Brunswick, Manitoba, and Yukon) and create a “Made in BC” program.

And more good news: this morning at the annual Union of BC Municipalities convention, the UBCM delegates passed a resolution calling on the province to adopt a comprehensive poverty reduction plan.

But now comes news earlier this month that an all-party committee of the Alberta legislature recommends that that province adopt a poverty reduction plan, including increases to the minimum wage (which at $8.80 in Alberta is already higher than BC’s, where it has been frozen at $8 since 2001). According to a report in the Edmonton Journal, the Alberta Standing Committee on the Economy called on the provincial government to “implement a province-wide poverty reduction strategy similar to the 10-year plan to end homelessness.”

How long can BC hold out?

You can hardly tell by their actions. BC did introduce full-day kindergarten in some communities this fall, but other than that the family policy front has been rather quiet lately.

The latest childhood vulnerability numbers won’t tip you off either as vulnerability has grown over the last decade, reaching 30.3% in 2009/10.

Don’t get me wrong. Setting goals is an significant first step and the government should be commended for taking a stand on this important issue.

However, without changing policy and taking action goals remain nothing more than laudable aspirations.

This is precisely the point that the Human Early Learning Partnership (HELP) at UBC makes with their new BC Smart Policy Report Card, released earlier in September. The report card assesses government actions in the area of family policy and compares them to benchmark recommendations developed by HELP in their 15 by 15 report, which was commissioned by the BC Business Council last year.

The findings? There has been some movement on the family policy front over the past year, but the BC government has only made about 5% of the recommended new investments in family policy. At this rate, the researchers estimate that it would take 20 years to reduce early childhood vulnerability to 15%, or 15 years longer than the government’s stated goal of “15 by 15.” It seems that the provincial government is well on its way of failing to achieve their goal unless they take decisive action on family policy and soon.

Many would have been satisfied to end it here with calling current government family policy a failure and making a call for bolder action. But HELP’s report card moves beyond name calling and assigning failing grades to analyze what it would take for smart family policy changes to be implemented.

HELP researchers recognize that politicians are rarely leaders; they follow what they perceive to be the popular mood among their constituents. So HELP’s report card looks beyond the need for political leadership and explores the role of the broader community in pushing for increased investments in smart family policy. Here’s their read on where the broader community is at and where it needs to be:

HELP’s recommendations for moving forward? An broad-based, frank discussion about priorities and trade offs around family policy.

British Columbians need to talk about how to find new funding or reallocate existing dollars in order to invest in the social and economic benefits that smart family policy will promote.

HELP researchers end their report card with an appeal to all British Columbians to take responsibility for changing the status quo:

Please start talking about [the key questions and trade offs] at your dinner tables, among your neighbours, in your offices and with your political leaders.

I fully agree that starting the conversation is how we move forward. So why not start by posting a comment here on the blog and, as I’ve noted before, by participating in the 2011 BC Provincial Budget Consultation?

The Vancouver hearing kicked off this year’s budget consultation process, a month-long opportunity for British Columbians share their priorities and recommendations for next year’s provincial budget with a legislature committee made up of representatives of both the party that is in government and the Opposition.

The Select Standing Committee on Finance and Government Services will accept citizens’ input until October 15. You can sign up to present in person at a public hearing in your hometown, you can submit written recommendations or video/audio clips, or you can respond to a brief online survey with open-ended questions.

This year, it’s particularly important to make your voice heard, because there are actual money on the table that are not spoken for. Just last week, the Ministry of Finance revealed — surprise — $2.7 billion extra revenues over the next three years above and beyond last year’s budget forecast. In the same news release, the Ministry announced that about $600 million of the moneys would be applied to reducing the deficit, but the other $2.1 billion are yet to be allocated.

Personal income tax cuts have been floated as a possibility and given the current HST mess, the temptation to appease the anti-tax vibe in the electorate must be higher than ever. There are also calls in the media for the windfall revenues to be put towards further reducing budget deficits and paying off the provincial debt.

At the CCPA, we believe that the money should be used instead for strategic spending initiatives to reduce poverty and homelessness in the province. Here is why.

Debt-reduction is not a priority for our province at this point. Our debt levels remain affordable and the current environment of low interest rates presents an ideal time for the government to borrow in order to invest in improving the economic security and future productivity of British Columbians.

The rate of return on debt-reduction is the interest rate we pay on the debt (this is how much we save if we pay a portion of it today). The long-term interest rates the province pays on its debt are around 4 to 4.5%. Many public investments have higher rates of return that that, which makes them better candidates for government spending than paying off the debt.

Using the $2.1 billion windfall revenues to offer personal income tax cuts would frankly be irresponsible. It will squander the opportunity to boost the economy and address BC’s pressing social problems all at once. Tax cuts will not do anything for the poor or the homelessness who don’t owe much in taxes to begin with. Tax cuts will not build affordable housing, improve access to post-secondary education for low-income youth, or reduce our greenhouse gas emissions. Strategic public investments, on the other hand, can do all these things.

The CCPA recommends that the revenue windfall is used to reduce poverty and homelessness in this province. Investing in poverty reduction has the potential to bring huge savings for the province over the long term in terms of lower criminal justice costs, lower healthcare costs, and higher school achievement and productivity. A report from the Ontario Association of Food Banks estimates that poverty cost the provincial treasury about 2% of GDP per year. If costs in BC are in the same ballpark, we’re talking about potential savings of $4 billion annually.

On the other hand, social psychologists like Stanley Milgram and Philip Zimbardo have shown how situations can override a person’s usual inclinations and cause them to do something which they would normally abhor, such as killing other people in wartime.

Our understanding of human behaviour has grown dramatically with the development of neuroscience. Many of my future posts will consider what these discoveries tell us about creating healthy human beings, and healthy societies.

Of course, these are very political questions.

One key concept is that of  “outside-inside” (in the words of psychologist Arthur Janov). We tend to internalize what we experience in our environments. Food and air, for instance, are obvious examples. It matters whether our food and air are clean or if they are polluted with various toxins.

A second key concept is “neuroplasticity.”  Neuroscience has shown that our brains are not static and unchanging. For instance, every thought and feeling in our minds corresponds to a physical change in our brains. Learn something new, and your brain changes.

In other words, every experience in our lives alters our brain.

A third element are the so-called “mirror-neurons,” which are a fundamental to our “social brain” (Dr. Dan Siegel). In brief, these neurons fire in our brains when we observe the feelings of others. In fact, we absorb the feelings of other people so much that Siegel suggested that we call them “sponge neurons.”

Finally, people tend to absorb the dominant values and beliefs of their culture, including its political ideology. Marx wrote that the ideas of the ruling class are the dominant ideas of society, and Gramsci elaborated on the concept of this ideological hegemony.

As political scientist Gary Olson wrote in Capitalism Short Circuits Our Moral Hard-Wiring, “Capitalists maintain domination, in part, through subtly but actively creating society’s prevailing cultural norms.”

Our brains as well as our beliefs are shaped, more than we realize, by the ideology of capitalism, with its emphasis on greed, selfishness, competition and individualism.

In the words of  Frans B.M. de Waal, “You need to indoctrinate empathy out of people in order to arrive at extreme capitalist positions.”

These norms and expectations often overrule our natural compassion, even though it is now clear that “the human brain is hard-wired for empathy,” in Olson’s view.

Finally, research has shown that poverty (e.g. stress, overwork, poor nutrition) take a terrible toll, not only on adults, but children, and even babies in the womb. Not only is physical health damaged, but emotional and intellectual health suffer.

We need to go beyond these symptoms and address the root causes of human suffering.

Six provinces now have poverty reduction plans, although most are still fairly new, and therefore we don’t yet have data to tell us what kind of success they are meeting with, the exceptions being Quebec and Newfoundland. What their plans and results tell us is that poverty isn’t inevitable – that policy matters.

The example of Newfoundland is particularly instructive. There, the Conservative government of Danny Williams has made poverty reduction one of its overarching goals. Back in 2004, Newfoundland’s poverty rate was the second highest in Canada after BC’s. It is now 6.5 per cent, the third lowest in Canada. Their plan has led to concrete policy changes: welfare benefit rates have gone up (and were already higher than BC’s relative to the LICO) and they have been indexed (they go up every year according to the CPI); the minimum wage has been increased to $10; and the province followed Quebec and made dental care universal for children.

Ontario now also has a plan. Indeed, their plan is legislated, with a 25% reduction in 5 years. And notably, that legislation, the Ontario Poverty Reduction Act, was passed with unanimous all-party support, one week before BC’s provincial election last May, at the height of the recession. Like Newfoundland, they have a cross-ministerial secretariat, with a lead minister. And their lead minister must present annual progress reports. They have struck a welfare review panel, undertaking a comprehensive review of all the social assistance rates and rules. And they have gone the route of introducing an Ontario Child Tax Credit (like the federal one) worth $1,300 a year (another policy vehicle for increasing the incomes of low-income families, whether their income comes from welfare or paid employment).

More recently, New Brunswick has tabled their plan. The government there has fundamentally altered the tone of the debate, particularly about welfare. They too have legislated their plan in what they call the Economic and Social Inclusion Act. They too have all-party support. They have enacted some very large increases in welfare benefit rates, and indicated that this is only the start. And they have increased and indexed the minimum wage. And they too have a secretariat to coordinate plans.

The key common features of these plans are these:

• They have been advanced with all-party support
• They have specific targets and timelines, which in most cases are embedded in legislation.
• They are comprehensive (meaning they deal with income – both social assistance and other government income supports, as well as measures to boost labour market income; but they also address the social infrastructure on which low and modest income families depend, such as housing, education, child care, and community health care; and they have specific measures to address poverty among those populations where poverty is most acute, such as Aboriginal people, recent immigrants, people with disabilities and metal illness, and single parents).
• They have accountability mechanisms, such as public consultations, funding for independent monitoring groups, and obligations to report annually on progress. A key need is for timeline benchmarks that are frequent enough that a government can be held accountable within the life of each mandate.
• There is a cross-ministry secretariat to coordinate and integrate plans, and to ensure that policies do not act at cross-purposes.

(The preceding was part of my recent presentation to the BC Legislature’s Standing Committee on Children and Youth. For the full presentation, click here

And to join the call for a BC poverty reduction plan, click here

Among the points I raised with the committee: too often this issue gets lost in a fruitless debate about how to measure poverty. The simple truth is that no measure is perfect. But by whatever measure one uses ­­–– the LICO (low-income cut-off) before-tax, the LICO after-tax, or the Market Basket Measure –– BC has the highest overall poverty rate and the highest child poverty rate in Canada. So we need a plan to change this reality.

The point is to pick a consistent measure (or a set of measures), which allows us to monitor progress over time and relative to other jurisdictions.

And when one compares BC’s performance (using either the LICO or the MBM) in this way – relative to the historic norm and relative to others – what emerges is not good.

The poverty and child poverty rates have come down in recent years (at least up to 2007, the last year for which we have data). That is to be expected. Generally, the poverty rate tracks the economic business cycle. For this reason, people are rightly worried that the poverty rate in 2008 and surely in 2009 will go back up (already we know from the annual Hunger Count report that food bank use was back up 15% in 2009 – an early warning).

But even within the data leading up to 2007, there are worrying elements:

• For example, after a near unprecedented period of economic growth, spanning from the end of the recession in the early 1990s to 2007, one would have expected to see much more of a decline in the poverty rate. But that didn’t happen. Instead, by 2007, the overall BC poverty rate (at 11%, using the after-tax LICO) had still not managed to attain the 1989 trough of about 10% reached before the 1990 recession.

• With respect to child poverty, the performance is even less impressive. 1989 was also the year in which the House of Commons resolved to end child poverty by 2000. As we all know, that didn’t happen, and indeed, the national child poverty rate by 2007 saw no progress – we were right back to where we started in 1989. But this masks provincial differences. In fact, most provinces have seen a modest improvement. The national picture is weakened by the fact that only two province saw negative progress in that time – Ontario and BC.  Indeed BC realized the least progress since the House of Commons’ ill-fated resolution, with child poverty increasing by 30 per cent between 1989 and 2007.

• Also, while the national child poverty rate has consistently gone down since the mid 1990s, BC alone saw a disturbing upward spike in the years 2002, 2003 and 2004 (again, you see this using either the LICO or MBM). This is likely a result on welfare policy changes instituted in 2002.

It is instructive to look at how BC does relative to some other provinces, and in particular, relative to Quebec and Newfoundland, as they are the provinces with the longest standing poverty reduction plans.

In many respects, the MBM is a better measure, as it is more reflective of the actual costs of basic goods in each place (such as differences in the cost of housing). However, data only goes back to 2000, and for the first few years, HRSDC was not reliably producing annual updates. But that appears to now be changing.

Importantly, the success in Quebec and Newfoundland isn’t just about an improved economy and job creation. Notably, if one were to look at market income alone, the child poverty rate in both of these places in 2007 was higher than in BC. It is after incorporating government transfers that their poverty rates fall below us. The lesson: government policy makes a difference.

Conversely, when we rely only on the market, economic growth and job creation, the results with respect to poverty reduction are weak. That is what we see in the BC case, where we have recorded very low unemployment in recent years (up to the onset of the recession), but poor progress on child poverty. In BC, the story of child poverty is primarily as low-wage story; 56% of poor children in BC live in households with at least one parent working full-year full-time in the paid labour force.  That’s why a plan needs to address issues such as the minimum wage, employment standards, and a living wage. And that’s why, when we call for a poverty plan, and the response from the Premier is that the government’s goal is to have the lowest unemployment rate that we can – that goal, while laudable, is insufficient.

Here’s an excerpt:

B.C. had the third-highest increase in unemployment in the country during the recession. Some 51,800 jobs were lost between October 2008 and October 2009, representing 2.2 per cent of B.C.’s total jobs. Unemployment increased over this period to 8.3 per cent from 5.2 per cent.

While the number of EI recipients rose sharply as unemployment grew, with nine B.C. urban communities experiencing an increase of 115 per cent or more in the number of EI recipients, coverage remained low, rising to 48.2 per cent in October 2009. In other words, more than half of B.C.’s unemployed were not receiving benefits, despite the fact that the province’s economy was one of the most devastated by the recession.

Citizens for Public Justice, along with Canada Without Poverty, has been leading a campaign called Dignity for All – a national call to end poverty in Canada.

Consider the HST, for example, which the government famously described as “the most important thing we can do for the economy” because it lowers the costs of business investment by $1.9 billion per year. The government chose to tax consumers more in order to keep the shift revenue neutral instead of raising the lost revenue from other business taxes.

While corporate and small business tax rates are getting smaller by the year, the minimum wage has not budged since 2001 and is now the lowest in Canada.

The intuition behind this economic strategy is that lower business taxes and relaxed workers’ rights would make it easier for firms to reap higher profits, thus encouraging them to set up locally. This in turn should create jobs for the local population and bring about economic growth. Jobs and economic growth are expected to, well… lift all boats as the saying goes.

Unfortunately, the type of jobs created by business friendly measures are often not the stable, well-paying jobs that people need to be able to support themselves and their families. As a result, the economic growth that is generated tends to benefit a small minority. In BC, we’ve seen this clearly over the last 25 years, when economic growth was strong yet poverty remained largely unchanged and income inequality increased substantially.

A recent OECD report confirms that job creation is not the be all and end all of social and economic policy. The report, entitled OECD Employment Outlook: Tackling the Jobs Crisis, devotes an entire 45-page chapter to the question “Is work the best antidote to poverty?”

The OECD researchers show that while employment considerably reduces the risk of poverty, simply having a job is not a guaranteed path out of poverty. On average in the OECD, 7% of people living in households with at least one worker were poor. In Canada, this number was higher, 9%.

Working poverty is so widespread that it accounted for close to 70% of all poor people in Canada even during the economic boom of the mid-2000s (roughly the same as the OECD average).

This OECD report is just the latest confirmation of something that social policy researchers have known for a long time: even a robust economic recovery will not eliminate poverty and social exclusion without a comprehensive, government-led poverty reduction plan.

What kind of poverty reduction policies does the OECD recommend? The report acknowledges that poverty is a complex social problem and country-specific factors need to be taken into account, but it argues that “social transfers play a key role, precisely because they can be targeted towards the most vulnerable households: on average in the OECD area, they reduce by almost half the rate of in-work poverty.”

On this front, Canada can and should be doing a lot better. Other OECD reports, such as the 2007 Growing Unequal? Income Distribution and Poverty in OECD Countries, have documented that social transfers in Canada became less generous between the mid-1990s and the mid-2000s, so it should not come as a surprise that our poverty rates (including working poverty) have grown since. BC has been among the worst performers in the country on these measures.

It’s clear that job creation is an important goal, especially at the tail-end of a deep recession, but it should not be pursued single-mindedly, without concern for the workers’ economic security or their ability to earn enough to afford the basics like housing, child care, education and training upgrades.

The type of jobs created matters a lot, which is why the OECD calls for increased training opportunities for those who have lost their jobs as a result of the recession. They suggest shifting “the focus and resources behind activation from the “work-first” approach which tended to dominate prior to the crisis to a “train-first” approach for those at high risk of long-term unemployment.”

Indeed, access to education and training opportunities throughout the lifecycle can greatly improve a person’s employment options and ultimately boosts the productivity of the economy as a whole. Investments in training and education partially pay for themselves with the extra tax revenue collected from higher paid workers. Yet such investments are largely missing from BC government’s one-sided labour market approach.