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Poverty at the Crossroads John Stapleton January 18, 2011 London, Ontario.

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Presentation on theme: "Poverty at the Crossroads John Stapleton January 18, 2011 London, Ontario."— Presentation transcript:

1 Poverty at the Crossroads John Stapleton January 18, 2011 London, Ontario

2 Contents Living in the age of Alpha Paradigm “smackdown” The Changing nature of work The Big Picture: social assistance in the context of Income Security in Canada & Ontario Social assistance – the ‘great megatrend’ The last three big recessions Profound change in who receives welfare Social assistance and Minimum wages The Welfare Diet, food inflation and food deserts Some tentative conclusions Poverty at the crossroads2

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4 Government share: about 37% Non-Profit Sector: about 2-3% Private Sector: 60% Highest government shares include France and Iraq (60+%) Lowest include Haiti and Singapore (10% or lower) GDP in Canada is $1.3 Trillion 4Poverty at the crossroads

5 ‘Smackdown’ Battle of the Alpha Paradigms The Alpha Paradigms and their elements Element The Stimulus Paradigm: Borrow, Tax, Spend, Invest Market as King, personal freedom Paradigm: Reduce and restrain Taxes Maintain or increase for services, infrastructure. investments, community Reduce taxes at any point, at any level relentlessly or taxes will; creep up on you and pay for things not in your interest Legitimacy of Taxes Fundamentally legitimate: - how we live and survive Fundamentally Illegitimate and suspect: - how we weaken our citizenry Government A reflection of the public good as a nation, provinces, cities and communities Only in place for our protection against crime, natural disaster, and to protect our borders against bad people, bad events and bad nations Families Strengthen the family through infrastructure, social security and civil protections Leave families to grow through less taxation and regulation. Allow them to flourish with the minimum level of outside intervention. Individuals Support individuals through civil protections Individual freedom through fewer regulations, less red tape, lower taxes, greater competition Inequality An ongoing and pervasive concern - the worry that those at the top have too much, much more than they need The natural state of the world - a positive because those who do well are in a position to help those who do not thrive - not a fundamental concern The EconomyProsperity through investment, taxation and responsible government through investment Prosperity only through lower taxation, measured deregulation, private sector spending and investment Poverty at the crossroads5

6 Environment Green energy and alternatives. carbon restraint Drill baby drill - state to protect against spills and harm Poverty An important concern, a need to resolve through investment, income and social security, strategic interventions An individual deficit that it is important that the individual overcome on their own with as little help as possible. Also a place for charity for the helpless. Crime Important to do what is effective - deterrence and rehab important If you do the crime, you do the time... Protection and punishment most important FuturePositive on investmentPositive only if less taxes, private sector growth Youth An investment - the world could be ok Only good future is with less tax, less government, otherwise negative GrowthNecessary but judicious Only if achieved through less government and private sector growth Smackdown Verdict Wins on fear of recession, loses in normal life Loses on fear of recession, Wins in everyday life Poverty at the crossroads6

7 7 7 THE LABOUR MARKET – DIFFERENT WORK CATEGORIES Change in Share of Employment, Canada (Richard Florida)

8 8 Poverty at the crossroads8 RECESSION ‘000s employed CDN $ STARTS RISING Employment trends by broad sector and skill categories, Toronto Census Metropolitan Area,

9 The Big Picture Show me the money! – By Program – By Target Group – Federal – Provincial Poverty at the crossroads9

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11 Poverty at the crossroads11

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15 Poverty at the crossroads15

16 Social Assistance: the Megatrends Poverty at the crossroads16

17 The three last big recessions The post recession shift: Recession of – welfare peaks in March 1983 Recession of – welfare peaks in March 1994 Great Recession of – welfare peaks in March 2011 or Poverty at the crossroads17

18 The three last big recessions Poverty at the crossroads18

19 A closer look Poverty at the crossroads19

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22 Canada ‘in the middle’ with support for single parents - OECD Poverty at the crossroads22

23 Canada ‘at the bottom’ in support for single (non-aged) persons - OECD Poverty at the crossroads23

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26 Profound Caseload Change In 1988 in Ontario, persons with disabilities comprised 32% of social assistance In 2010, persons with disabilities comprise 60+ % of social assistance and growing Lone parents in equalled singles – Since 2000: singles have increased by 57% Lone parent decreased by 21% Poverty at the crossroads26

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31 Single People dominate welfare applications Poverty at the crossroads31

32 Younger Singles dominate welfare applications Poverty at the crossroads32

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36 Poverty at the crossroads36

37 Minimum Wages and Social Assistance In Ontario: – Minimum wages set at $12.50 a week in 1937 – Relief set at maximum of $19. a month – 36% Ratio – Rose to 70% in – Relentlessly fell for the next 20 years – Now back to 36% – Forced choice between $7,000 or $20,000 Poverty at the crossroads37

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40 The Welfare Diet: Then and Now Authored by Hon. Dave Tsubouchi in 1995 Re-shopped at Supercentre in February 2010 and January 2011 – Food inflation much higher than CPI – Bad food rising faster than good food Poverty at the crossroads40

41 Poverty at the crossroads41

42 Gold: last 12 months Poverty at the crossroads42

43 Sugar: last 6 months Poverty at the crossroads43

44 Corn: last 6 months Poverty at the crossroads44

45 Cotton: last 6 months Poverty at the crossroads45

46 Soybeans: last 12 months Poverty at the crossroads46

47 Copper: last 12 months Poverty at the crossroads47

48 Coffee: Last 12 months Poverty at the crossroads48

49 Cattle: last 12 months Poverty at the crossroads49

50 Orange Juice: last 12 months Poverty at the crossroads50

51 Pork: Last 12 months Poverty at the crossroads51

52 Wheat: last 6 months Poverty at the crossroads52

53 Food inflation has already outstripped general price inflation over the years This trend likely to accelerate in future High calorie foods accelerating the most – available to the poor Low calorie food accelerating the least – less available to poor –”Food deserts” New concern about affordability of food in 3 rd World What does commodity price inflation mean for food? Poverty at the crossroads53

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56 Not just the welfare diet.... True for all foods Poverty at the crossroads56

57 Grain dairy and meat responsible for high food inflation Poverty at the crossroads57

58 ‘Food Group’ Consumption is the same between poor and non poor Poverty at the crossroads58

59 But Quality and type of food much worse for the poor Poverty at the crossroads59

60 Food Deserts – the big irony - cheap good food unavailable to the poor Poverty at the crossroads60

61 Food Consumption patterns and income The Poor eat calories The middle class eats nutrition The rich eat presentation Poverty at the crossroads61

62 Food Deserts are poorest with high disease rates, poorest transit Poverty at the crossroads62

63 The Welfare Diet: Then and Now – Rates do not keep up: – Welfare single rate now $592 a month; – if indexed would be close to $904 – down $312; – ODSP down $233 – Special Diet of up to $250 re-application in 2011 Poverty at the crossroads63

64 Tentative Conclusions Mythology of social assistance – the most ‘containable cost’ Indexation federal rule, provincial exception Social assistance is small expenditure and will get smaller Rates in serial decline – will continue Caseloads heading towards the single person with disability rising Poverty at the crossroads64

65 Tentative Conclusions Minimum wages and welfare out of whack in early 1990’s Now out of kilter in the opposite direction Food a growing issue Bad food the main threat Phil Gramm(?) clarion call for more rate cuts Poverty at the crossroads65

66 Tentative Conclusions The Good News? – Lone parents at historic lows – child benefits, child support, possibly can leave welfare behind – Everyone in the big tent labour force ? More bad news? – Singles the story of the recession of – Senior disability programs leaving social assistance as last payer Poverty at the crossroads66


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