Poverty statistics: confusing illusion with reality

For some reason there’s no such thing as good news in Canada. Even as taxes are being lowered, unemployment is at a 30-year low, the dollar trading at a historic high and all economic indicators pointing upward, the poverty industry tells us that things are worse than ever.

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Over the past few weeks, the Canadian Centre for Policy Alternatives, Campaign 2000 and The United Way have been telling Canadians that more needs to be done to help the plight of the countless thousands of Canadian families living in poverty, particularly, the children. Some of these organizations claim that child poverty in Canada has increased, despite the buoyant economy and very strong evidence to the contrary. What’s so interesting about all these dire warning about Canada’s poor, is no actual official definition of what constitutes poverty exists. The closest thing to it is a standard established by StatsCan called the “low income cut-off” (LICO), which serves to establish what people are calling “poverty” in relative terms. StatsCan defines “Low income cut-offs (LICOs) [as] income thresholds, determined by analyzing family expenditure data, below which families will devote a larger share of income to the necessities of food, shelter and clothing than the average family would”. Even then, there are two ways of measuring LICO, the pre-tax and after-tax LICO. The poverty industry prefers to use the pre-tax LICO when lamenting the poor, as this doesn’t take into account Canada’s progressive taxation structure or government transfers, which makes the picture appear that much bleaker. Poverty, as most people understand it, is a family’s inability to provide for the basic necessities of survival, i.e. food, shelter and clothing. There is currently no official measure for poverty in Canada, which is why organizations advocating for the poor like to use the LICO as evidence that poverty is rampant in Canada even when times are good. Using LICO as a benchmark for poverty will always produce larger poverty figures because there will always be a certain percentage of individuals whose income is less than the average—even if the average were over a million dollars per year. I am always suspicious of groups or individuals who purport to want to do things “for the children” and the term “child poverty” is particularly alarming to me because when someone uses that term I know I’m being worked. If there were a real desire to alleviate poverty among children, a good starting point would be to encourage children to get an education and refrain from having babies before they are able to financially care for them. The term “child poverty” is a euphemism designed to conjure up visions of poor starving waifs selling matchsticks on street corners during a snowstorm to buy milk for their infant siblings. The reality of child poverty is a single dropped-out teenage girl on welfare with an infant in her arms and another gestating in her womb. Society can spend the next two decades providing benefits to feed and clothe this family unit, but the truth is, there will never be an improvement in their material circumstances because of the simple fact that no education + kids out of wedlock = unending poverty. The poverty industry is waging a relentless campaign to get government and charity to cough up more money in family benefits and will use the statistics most convenient to their cause. This will accomplish little to actually alleviate poverty and will arguably perpetuate it. The real tragedy about poverty in Canada is that there are no new ideas to deal with it. Claiming to declare “war on poverty” may make for a snappy souind bite for politicians, but it hardly helps the problem. What’s needed in Canada is a measurable definition of what actually constitutes poverty and an action plan that entails more than giving away buckets of taxpayers’ money. Anything less only maintains the status quo.