Where to draw the line on child poverty

COYNE: We need a measure of poverty that tells us if we’re making progress against it

Introducing his famous motion in Parliament committing the government of Canada to abolish child poverty by the year 2000, NDP leader Ed Broadbent conjured a Dickensian vision of Canada. “Being a poor kid means box lunches from food banks and soup from soup kitchens. Mr. Speaker, to be a poor kid means trying to read or write or think on an empty stomach . . . One quarter of our children are wasting away.” The motion passed, unanimously.

That was on Nov. 24, 1989. Twenty years later, writing in the Globe and Mail, Broadbent found little improvement. “Canada’s level of poverty is virtually unchanged . . . After two decades, the child-poverty rate has dropped a mere two percentage points, to 9.5 per cent. Why do more than 600,000 Canadian kids wake up hungry and go to school trying to read, write and think on an empty stomach?”

The answer is: they don’t. More than 600,000 Canadian kids are not waking up hungry today, any more than one quarter of Canadian children were “wasting away” 20 years ago. What Broadbent means by poverty is clear from his rhetoric: a state of absolute privation—hunger, an empty stomach, wasting away. But the numbers he cites are all based on relative measures: that is, how many children were less well-off than other children.

That eye-popping one-quarter figure from 1989 was the number of children living in families with less than one-half the median income before tax. The somewhat more subdued 9.5 per cent figure for 2007, down from 11.9 per cent in 1989, was based on yet another measure, Statistics Canada’s Low Income Cut-off (LICO). LICO doesn’t measure poverty, and it doesn’t pretend to: indeed, the agency takes every opportunity to state explicitly that LICO is not a poverty line, and shouldn’t be used as such.

The problem is it’s hard to say what LICO does measure. It’s clear that “one-half the median” is a relative measure, and it’s clear what it means. But LICO? Here’s how StatsCan calculates it. First, they figure out how much a family on average income spends after tax on certain essentials of life: food, shelter, clothing. Then they take that proportion—for 2007 it was 43 per cent—and add 20 points to it. (Why 20 points? Why not?) Finally, they take the level of income at which a family would be spending 63 per cent of its income on essentials, if it spent as much as the average family, and deem that family to be living on low income. How much is that? For 2007, it ranges from $11,745, for an individual living in the country, all the way up to $47,084 for a family of seven in a large city. That’s hardly princely. But it’s not starvation, either.

In other words, LICO is a relative measure, disguised as an absolute measure. Or at any rate, it hopelessly muddles the two. Which is how people like Broadbent, or the activist group Campaign 2000, can claim that Canada has made virtually no progress against child poverty in the last 20 years. Indeed, how could it have? A relative measure means that even if everyone’s income rises, the poverty rate does not change—not unless the distribution of income changes. It’s a measure of inequality, not poverty. StatsCan now counts as poor anyone who spends more than 63 per cent of their income on necessities. But that would have described a middle-class family in the 1950s.

Do not misunderstand: inequality matters, too. There are consequences when societies develop an underclass, demoralized and falling out of contact with the mainstream. The inequality that matters here is not between rich and poor—how much the top quintile earns versus how much the bottom quintile does—but between the poor and the middle class. A poor family is not demoralized because it cannot afford a yacht, but because it cannot aspire even to the sorts of everyday things that average families take for granted.

Further, the line between absolute and relative concepts is not so clearly drawn as all that. Our notion of what is absolute privation will change over time, in line with prevailing notions of decency. Similarly, relative definitions have an element of the absolute to them: will we still define one-half the median as “low income” when the median is a million dollars?

So there would be value in collecting data using both criteria: relative and absolute. We’ve got a useful relative measure in one-half the median, widely used in other countries. And we’ve got the basis for a good absolute yardstick in the “basic needs” index pioneered by professor Christopher Sarlo for the Fraser Institute, and in the Market Basket Measure provincial welfare departments use to set social assistance rates.

Why do we need an absolute measure of poverty? Not, as critics charge, so we can define poverty out of existence, but so we can tell whether we’re making any progress against it. What’s important here isn’t the level of any such measure—perhaps Sarlo’s assessment is too stingy—but whether it allows us to make meaningful comparisons: over time, and between countries. As it happens, the news here is rather better. Sarlo calculates the level of child poverty has in fact fallen over the last two decades to roughly five per cent—as you would expect, given the efforts of governments to address it through programs like the Canada Child Tax Benefit and associated supplements. Moreover, we score quite high on the international standings, as compiled by the Luxembourg Income Study—not far behind the Swedes and the Norwegians, though we perform rather less well on relative measures.

Let’s publish both sets of data, then, absolute and relative, and learn what we can from both. But it’s long past time we retired LICO.




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Where to draw the line on child poverty

  1. Interesting article. Daily Bread Food Bank in Toronto and the Caledon Institute for Social Policy share your concerns with our relative poverty measures. As a result we developed a new measure of poverty called a Deprivation Index that has been adopted by the Ontario Government to assess its progress to reduce child poverty. A deprivation index is a list of items considered necessary to have an above poverty-level standard of living but which poor people are unlikely to have. The measure was released last week along with the government's first poverty reduction report card. The Deprivation Index is a work can be found at http://www.dailybread.ca/learningcentre/publicati… and the backgrounder on the Ontario Deprivation Index can be found at http://news.ontario.ca/mcys/en/2009/12/ontario-de… In 2009 12.5% of Ontario's kids were found to be raised in a poverty level standard of living by the new measure. We feel it's a better way to measure poverty, and importantly progress can be made agains it while it is very difficult to by our income measures for reasons you point out.

    • Both the Daily Bread Food Bank and the Caledon Institute have a rich positive history of working on poverty issues. This new poverty measure is very promising. Is a welcome update to existing measurement strategies in that it provides a more concrete picture of the implication of poverty for those in its grasp.

  2. I agree we need clear measurables. But my fear with this article, is that you almost discredit the fact that there are children in this country who do indeed try to read or write or think on an empty stomach. In a country with as many resources as ours, no child should consistently face the pain, shame and despair of hunger.

    • But my fear with this article, is that you almost discredit the fact that there are children in this country who do indeed try to read or write or think on an empty stomach.

      That's typically the underlying motive of articles like this. Coyne will of course, wail that this is untrue but the article employs the usual bag of tricks used to attack every effort to strengthen our social safety net.

    • you almost discredit the fact

      Where?

  3. Mr. Coyne is to be congratulated on the lengthiest, most anal article quibbling about practical irrelevancies. The issue here is the growing gap between the rich and the poor. A tax system that aids and abets this inhuman behaviour. And an unwillingness on the part of governments to truly meet the needs of the most disadvantaged.

    Whether child poverty is 10% or 30%, it's way too high. Starting with Aboriginals. Single parents. Quit quibbling. Get moving.

    • The fact that Aboriginals (and many non- aboriginals) are living in poverty is not because governments (tax payers) are not allocating enough financially to the problem- it is because of political and social roadblcoks that you would probably describe as "practical irrelevancies." This issue does not require more funds, it requires new thinking. The current "social safety net" has proven largely ineffective in reducing poverty. We need leaders who have the courage to ask why that is, and a population who are willing to talk about the real reasons many people remain poor in one of the richest nations on earth.

    • The issue here is the growing gap between the rich and the poor

      Actually, he explicitly stated that he was not talking about income inequality.

      • Yes I did read the article, s_c_f. Mr. Coyne stated: "The inequality that matters here is not between rich and poor…."

        There is a huge difference between stating income inequality is not the problem (Mr. Coyne) and that it is not what he's talking about (you).

        No offence, but you and Mr. Coyne are both wrong.

        • No offence, but you took that statement way out of context.

          The inequality that matters here is not between rich and poor—how much the top quintile earns versus how much the bottom quintile does—but between the poor and the middle class. A poor family is not demoralized because it cannot afford a yacht, but because it cannot aspire even to the sorts of everyday things that average families take for granted.

          He is NOT saying inequality is not a problem. Not even in the slightest. You are completely twisting his words.

          And he is saying we have measures for income inequality, but we have no measure for absolute poverty, which is the point of the article.

          • It's not out of context to disagree. Why is inequality between the middle class/poor more important than between rich/poor? This is surely illogical and immoral.

            The gap is obscene and has been getting worse for a couple of decades. Make the rich pay their fair share, that's all. Mr. Coyne dismisses this out of hand.

  4. You mean something like this?

    It exists. It may not be perfect, but we've been doing this since 2000.

    • Also interesting to see that it's not children that need the most help, it is single people (single parents and single adults 45-64), disabled people, immigrants and aboriginals that are most in need. While 1 in 10 kids falls below the line, 1 in 3 people in those groups falls below the line.

      • Those groups are also at greatest risk for social exclusion.

  5. Here is the press release that describes the MBM in a bit of detail.

  6. One more thing: Thanks to Andrew for getting the LIM and LICO mostly right. I particularly like his description of LICO as a mix of absolute and relative measures, since it is based on a basket (a particularly peculiar one, as he notes) that hasn't been updated since 1992 (making it an absolute measure), but has been updated before and may again in the future (making it relative). The LIM (half median income) is purely relative; the LICO has its warts, but it's not a purely relative measure.

  7. Joy, I believe it is a question of program funding and taxation and I refer you to Scandinavian countries as prime examples. We used to believe in progressive taxation in this country, until the neocons took over. We had a child care program accepted by all provinces, a remarkable feat, until the Cons scuttled it. We had Kelowna and other deals with First Nations, until (fill in the blank).

    • How did you reach the conclusion that Canada no longer has a progressive taxation system? Here are Canada's 2009 federal tax rates:

      15% on the first $40,726 of taxable income, +
      22% on the next $40,726 of taxable income (on the portion of taxable income between $40,726 and $81,452), +
      26% on the next $44,812 of taxable income (on the portion of taxable income between $81,452 and $126,264), +
      29% of taxable income over $126,264.

      Also consider that anyone's first $10,000 of income is tax free due to the Basic Personal Amount.

      Now how is it that Canada's tax system isn't "progressive" anymore?

  8. But Andrew, how can this be used to attack the Conservatives? Please join the mob and ignore any story that cannot be painted (either credibly or not) as a government scandal.

  9. I've lost muscle mass from periods of fasting in order to conserve food for my child. I can tell you that once the deficits of poverty are experienced, they present an uphill battle that is hard to measure. Let's say a family is poor for a year, for two years. During that time children's grades will drop, credit will be used resulting in debt, healthcare will be delayed and all of these deficits are MORE EXPENSIVE for the family that remains poor. For instance, it costs the still-poor more to go to the dentist when they are not insured during the first six months of job re-entry, and the services required (delayed cavities, delayed cleanings) will be greater. It's about maintenance Andrew. The scale to use is one of depreciation.

  10. Attending the devaluation of the asset that is 'the poor' is the non-monetary social policy crucible: "my poverty doesn't offend me, but it may offend you." The same can be said by the rich: "my wealth doesn't offend me, but it may offend you." So for instance, I get a basket of 'goods' from the food bank and I'm not grateful. Or the rich make philanthropic contributions and despair at their inadequacy.

  11. Not as progressive as we used to be. The GST is a regressive tax. And corporations used to pay a far bigger chunk than now.

    Look what you put up. A person with taxable income of $41k to $126k pays 22% and 26%. Anyone with taxable income from $126k to a billion pays just a few per cent more. Not that they do, because of all the tax "minimization" schemes there are out there.

    Check out other countries where the rich really do give back. The more egalitarian societies in Europe. especially, with far better social services, present ways we could do better.

    http://www.worldwide-tax.com/

  12. You do realize that every one of those European countries you so admire has a value-added tax (GST) that is much higher than ours don't you? Every single one of them. Just because many of them hide the VAT in the price doesn't mean they don't have it.

    Also, you realize the neo-con thugs actually lowered said GST by two points don't you? And were roundly criticized by many "progressive" folks for doing so, because cutting the GST, apparently, "only helps the rich".

  13. It's more important because while we can aspire to give the poor a better shot at a middle class lifestyle, aspiring to give them a wealthy lifestyle is ridiculous. Therefore, the relevant comparison is with the middle class. Comparing them with the top 5% or 1% of income earners is deceptive and misleading. Unless of course that is your aim to begin with.

  14. This is getting circular. I'm not comparing. I'm saying upper income Canadians should pay more.

  15. "So there would be value in collecting data using both criteria: relative and absolute."

    I believe Ontario has tried to do exactly that. I don't think we need to retire LICO, just supplement it. A variety of measures interpreted in an intelligent way will give the full picture.

    A word about Broadbent's motion : what was the point of it, except for the usual NDP demagogy, without specifying a set of policies to reduce child poverty ? Again, Ontario has done both.

  16. The federal government has actually made huge progress in the area of child poverty in the past 20 years with the Canada Child Tax Credit and the National Child Benefit. The programs were started under Mulroney in 1991, enriched by the Liberals during the later 1990s, and enhanced by the various provinces as well. It's worth quite a bit of money to low income earners and it's a lot more than what they'd have gotten from universal family allowance.

    • While the CCTB and associated programs are good programs, they haven't done anything to reduce poverty (hence the fact that child poverty rates are virtually unchanged from 20 years ago). The problem is that the clawback that the provinces are allowed to make for social assistance means that the poorest families get no benefit from this program.

      • I believe Ontario has stopped clawing it back. Or at least reduced the amount they claw back. I'm not certain on this though.

  17. I'm signing off now. Yyou've lost me with your nonsense and rudeness.

  18. "…will we still define one-half the median as “low income” when the median is a million dollars?"
    This is the classic, simplistic argument of social conservatives against a relative poverty line.
    Once and for all:
    YES, Mr. Coyne, we *will* still define one-half the median as “low income” when the median is a million dollars, because at that theoretical point in time, the cost of everything will have also risen astronomically compared to today's prices.
    For links to information about poverty measurement in Canada, see:
    http://www.canadiansocialresearch.net/poverty.htm

  19. "…will we still define one-half the median as “low income” when the median is a million dollars?"
    This is the classic, simplistic argument of social conservatives against a relative poverty line.
    Once and for all:
    YES, Mr. Coyne, we *will* still define one-half the median as “low income” when the median is a million dollars, because at that theoretical point in time, the cost of everything will have also risen astronomically compared to today's prices.
    For links to information about poverty measurement in Canada, see:
    http://www.canadiansocialresearch.net/poverty.htm

  20. Oh, and about the MBM…
    Re. "…the Market Basket Measure (that) provincial welfare departments use to set social assistance rates."
    No Canadian province or territory uses the Market Basket Measure (MBM) to set its welfare rates. The MBM was originally designed as a benchmarking tool to help in measuring the success of the National Child Benefit initiative in the late 1990s, but no Canadian jurisdiction has ever used it to set welfare rates. Welfare rates are set by political decision except in a few provinces (QC & NL spring to mind) where the rate of annual increase is set in the welfare regulations.
    [The notion of welfare rates being "set" is a bit of a misnomer --- in all jurisdictions, the welfare rates were "set" a long time ago, and since then it's been a political decision as to if/when the rates are increased and by how much...]
    For welfare rate information for all jurisdictions, see:
    http://www.canadiansocialresearch.net/welfare.htm

    • I can attest to the fact that the setting of welfare rates bears no meaningful relation to the cost of basic necessities. I've studied welfare policy for almost 30 years and I've lived for roughly four years on welfare when I was a single mom (one year in ON and three in NS). Trust me, when you're getting a maximum of 610 dollars per month for housing (this included rent, heat, and electricity) in a rental market where the average 2-bedroom apartment costs around $650 per month, you don't need to probe any further to figure out that whoever set these rates was completely disinterested in meeting people's actual needs. I could cite other evidence relating to the cost of food, but you get the idea. Gilles is absolutely right. He's also absolutely right about the way rates are raised over time.

  21. Every dollar taxed is a dollar that could have helped start a business, or helped a friend or neighbour in need. Why would anyone concerned about the welfare of children want his money to fund govt. parasites, when he could have contributed that money to a private charity or to kids he knows are suffering?

    Central planning doesn't work. The State is a beast. It has an insatiable appetite for money, power and intrusion.

    I am sickened by Mr. Coyne's article. HIs attitude is one of: if only we made government better and more transparent. Give it up!

    The State is evil. It takes money from citizens against their will. It does anything it likes. The only hope for young kids is that they somehow avoid the public education system funded by the State.

    • Kifaru, get help.

  22. If we want to be purists you may be right about LICO. The issue is not LICO. The issue is 'REAL POVERTY" in Canada. Please Mr Coyne: Do educate yourself …Go spend a few days in a Soup Kitchen or a homeless shelter or on a street corner in Toronto. Spend a few days at a social service recipient's home… Eat what they are obliged to eat. Join the SDOH listserve and read up on the research. Right now you appear to be sadly illiterate on the issue of poverty and the real need to address it. Your article was the verbiage of an intellectually snobish 'know it all"
    Greta

  23. I find the measurement/definition of "poverty" problematic. In the early 1080's my wife and I and our two boys (14 & 10) relocated to the Interior of BC from the Lower Mainland. We moved into a custom built 2600sqft air conditioned home on !/2 acre urban lot. We had two cars, one new the other 8 years old. We had a hot tub, 3 tv sets, a ping pong table and season passes to the local ski hill.
    I was startled then,as I am even now, to consider at the time our family income was BELOW the so called "poverty line". In a place in the world where people suffer from having too much (obesity epidemic?) it is very difficult to determine what is actually poverty.

  24. okay andrew i will stand up to be counted! moi exist below the poverty line and need one lil window of opportunmity to put my plan into action to make this ole world a better place!
    i am financially p o o r , live below the poverty line and have a plan to assist talent that lies dormant and use it for a better world…nuff said

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  26. Capitalism = Poverty
    No matter what you try to do, no matter what measures are taken the poverty rates might go down but at the end of the day it will still EXIST. Where there's free market, there's big gaps between rich and poor. What we need to focus first are the hungry kids and the homeless people. The governments have no strategy or structure as to how to improve poverty. OOOHHHHH I'm gonna open a food bank, lets all donate food to poor people. There's lots of food banks in toronto and many non-profit organizations that help the poor, but every time I go downtown I see people lying on the streets begging for money and standing on the sidewalks with boards in the hand that say "help me", I mean WTF are we doing. It's not that hard, we need to get the poor people off the streets first, give them homes to live in, with condition of working a job. THINK OF THE HOMELESS FIRST THEN THINK OF THE PEOPLE WHOSE SALARIES ARE BELOW THE FREAKIN POVERTY LINE.

  27. I might go against the norm but I truly believe that poverty-stricken children should be helped out in any possible way the government can. Something has to be done to give these people that are on the street some incentive to get off of it. I know that there are food banks and other government assisted programs but there has to be another way. psychic readings

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