Breaking the poverty shell game

Breaking the poverty shell game
National Post
Tue 14 Nov 2006
Page: A22
Section: Issues & Ideas
Byline: Lorne Gunter


In his own quiet, yet persistent way, Chris Sarlo, an economist from Ontario's Nipissing University, has recast Canada's poverty debate.

Fourteen years ago, when Sarlo first introduced his "basic needs" calculation of poverty in Canada, he was rebuffed, reviled and dismissed by the public policy establishment. Who was he to challenge the orthodox definitions of poverty?

There were lots and lots of poor people in Canada -- everyone knew that. And they needed lots and lots of government help -- tens of billions of dollars in redistributed income and armies of social workers -- that was a given. Anyone who couldn't see that was either heartless or a dunce. Sarlo was called both.

Yet over the years, Canada's vast poverty lobby has found it impossible to ignore Sarlo. His main contention is that "poverty is fundamentally a problem of insufficiency, not inequality."

For the past four decades, however, it has been the position of social-justice activists, liberal-left politicians, commentators and academics that poverty is relative, rather than absolute. You may have quite a bit of money, but if everyone around you has a lot more, that's unfair. You will feel poor, even if you're not, in absolute terms.

I recall the first time I covered a poverty debate being struck by some of the absurdities that went into standard calculations of who was and was not poor. In the late 1980s and early 1990s, social planning councils in most major Canadian cities included among the poor people those who could not afford colour television with cable and families whose children went without piano lessons or hockey registration. The thinking was that such wants separated these individuals and families from the mainstream of society. They made them poor because they were "culturally exclusionary." It was, and still is, standard practice for welfare advocates to use relative measurements of poverty -- such as Statistics Canada's low-income cut-off (LICO) -- rather than absolute measures, such as Sarlo's.

In essence, relative measures of poverty are a shell game. Even if the poorest Canadian gets 10%, 20% or 30% richer, even if he and his family are no longer hungry or poorly housed and clothed, if every other Canadian gets 10%, 20% or 30% richer at the same time, then the poorest Canadian remains "poor." Consideration of his ability to afford the daily essentials has little or nothing to do with his official neediness.

This is a very crafty way of ensuring that most poverty is enduring, and that most poverty-industry jobs and funding are perpetual. This also explains how, as Ontario's economy roared ahead in the closing years of the 1980s, welfare advocates were able to claim poverty was on the rise and how the provincial government of the day was able to justify an almost doubling of welfare recipients, even as job creation was racing ahead.

Then, in 1992, along came Chris Sarlo.

Sarlo spent years calculating the amount of money needed by singles, couples and families to afford the "basic needs" in various Canadian cities and towns. Then he matched income figures from those locations against these amounts and calculated the number of people who were truly poor.

All Sarlo was really doing was calculating poverty using the ordinary person's definition of poverty: How many Canadians could not afford to eat a nutritious diet, wear adequate clothes or live in a clean, dry home or apartment?

At the time, the standard poverty rate trumpeted by welfare organizations, sociologists and media was in the range of 17% to 18% of adults, and over 20% of children. Sarlo earned their wrath for stating the real rate was nearer 7%; 10% for children. Since then, Sarlo has updated his calculations for Vancouver's Fraser Institute.

In his most recent report, released last week, he delivered the happy news that fewer Canadians than ever are poor -- fewer than one in 20 adults and just 5.8% of children. Since 1950, when more than four in 10 households were poor, poverty has dropped almost seven fold.

Much of the drop is due to the opportunities provided by our market economy, some to welfare-state policies. But don't expect welfare advocates to accept Prof. Sarlo's sunny assessment. If they did, they might have to find a new cause.


____________________
Lorne Gunter
Columnist/Editorial Writer,
National Post
Columnist, Edmonton Journal
Tele: (780) 916-0719
E-mail: lgunter@shaw.ca
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