First published on The Sixth Estate
Recently the National Post’s resident anti-government wingnut, William Watson, sallied forth with a strangely positive report on what he calls Canada’s poverty rate, which he says has fallen to an all-time low of 9%. This, says Watson, means we should keep going pretty much as we have, meaning less taxes, less regulation, less welfare, and less — this is his position, not me putting words in his mouth — less planning for the future and more just sitting back and letting it happen.
The cause for Watson’s latest celebration is the publication of Statistics Canada’s annual Income of Canadians, which does indeed report that the number of Canadians living below the Lower-Income Cut Off (LICO) has fallen to a record low. And that, says Watson, shows that Canada’s “poverty rate” is down lower than it’s ever been before, because the LICO figure is “by universal practice” the definition of poverty. Well, maybe. Actually, no. Here’s the first problem with Watson using the LICO number to measure the poverty rate, and again these aren’t my words, they’re StatsCan’s words:
Statistics Canada has clearly and consistently emphasized, since their publication began over 25 years ago, that the LICOs are quite different from measures of poverty and that this agency does not endorse their use as such.
So Watson’s category of “universal,” in this case, actually rules out the people who made the stats in the first place. In fact, what the LICO is is the point at which people begin spending substantially more (20% more) on food, clothing and shelter than the rest of Canadians. So, for instance, if the average Canadian spends 40% of their income on these items, than a low-income person is someone who spends at least 60% of their income on these items.
It’s not hard to see why it’s potentially dangerous to talk about Canada’s poverty rate going up or down on the basis of this sort of statistic. Technically, you could have an entire society living on a dollar a day, and no one would be living below the LICO figure, so by Watson’s standard, no one would be living in poverty. When you hear a reference to StatsCan’s “low income” figures, don’t think “poverty rate.” Think — and I know this is a mouthful, which I’m coming to in a moment — “the rate at which people begin to spend substantially more than an average proportion of their income on basic needs.”
The problem we’re running across here, which naturally the media doesn’t bother to educate the public about, is yet again one of how to produce statistics. Statisticians want rigorous, objective measures, and in order to get them, they’re quite willing to move far beyond what non-statisticians may think they’re talking about. The unemployment rate is a classic example: this is a measure of the proportion of people who are actively looking for work relative to the total number of employed people, not a measure of the number of people who want to and are able to work. If there are so few jobs in your region that you give up looking, you’re no longer unemployed, and the unemployment rate goes down. If a new plant opens and you get optimistic and start applying for work again, then the unemployment rate goes up. Paradoxically, it’s possible for total employment and the unemployment rate to go up at the same time, or down at the same time, and during the recent recession we’ve seen both of those seemingly bizarre outcomes, all because of the deceptive magic of statistics.
Now, let’s return to the issue of the “poverty rate” and show you what I mean. To begin with, here’s the overall percentage of Canadians living in statistically defined “low income,” which Watson wrongly implies is some kind of “poverty rate.” As you can see, since the 1970s, the most substantial reduction in low-income families was achieved under the Chretien government, with the latest “achievement” of the Harper regime being celebrated by Watson merely involving a few tenths of a percent at the end of the chart. And remember, of course, that this doesn’t necessarily mean more or fewer people living in poverty:
So on the whole, the percentage of Canadians who have to spend much more of their income on basic necessities is declining. But what about the actual income of lower-income Canadians? Again, that would depend on how you define lower-income Canadians. But it’s worth pointing out that the bottom 20% of Canadians have been suffering from a serious income problem for years now relative to the rest of society, and however you define poverty, the poor must by definition fall into that 20% (and maybe more besides):
So the income of the lower one-fifth of Canadians is basically stagnant. All else being equal, that would basically mean that any significant improvement in the poverty rate would be impossible. And of course all else isn’t equal. Even a decade ago, you could get by without reliable Internet access; today, that alone represents a massive social and economic disadvantage. So incomes are stagnant, but the effective necessities — beyond food, clothing, and shelter — are increasing. Basically, the income distribution chart leads you to the opposite conclusion from the LICO chart. The LICO chart implied that the Chretien years did a lot to lift people out of poverty. The income distribution chart suggests that the Chretien years marked the beginning of a grand party for the wealthy, a party which hasn’t yet ended.
But that still doesn’t get us any closer to an actual poverty rate; it just involves juggling yet another set of potentially misleading criteria about people who earn less than the average but may or may not be living in “poverty,” depending on how you define “poverty.”
I’m not a statistician and I don’t have a permanent solution, but in the meantime, I’d suggest that food bank usage represents one useful indicator of living in poverty. The number of food banks in Canada has grown by around 70,000% between early 1981 and early 2012. Here, according to data taken from Food Banks Canada, is the percentage of Canadians who go to a food bank in any given March over the past 15 years. According to that NGO, over 150,000 more Canadians visited a food bank in March 2011 than did in March 1997:
The most relevant part of this figure is the jump which occurred after 2008. Watson implies that the evidence shows there was no “jump in poverty” during or after the recession. Again, it depends on how you define poverty, but this chart suggests that food bank usage jumped a stunning 25% in that time.
The numbers appear stabler than that 150,000 figure would suggest because the percentage calculation takes into account population growth. Nonetheless, food bank use is at its highest number ever, in both proportionate and absolute terms. So in the politest and most respectable manner possible, I must ask William Watson to please shut the fuck up about how our present system is doing good by the nation’s poor.
It’s worth pointing out, for my younger readers as well as for those older ones who’ve simply been lulled into complacency by inertia, that there didn’t use to be any food banks in Canada. The first food banks, as we know them today, appeared in the early 1980s. Now, 1 in 40 Canadians visits one on a monthly basis.