MYTHS ABOUT POVERTY

Fraser Forum - July 2001
Popular Myths About Poverty
by Chris Sarlo

Throughout history, great damage has been done to individuals and groups as a result of myths about them. The real danger occurs when myths sound like they could be true and are repeated often enough by influential people that they become part of the public's belief system.

Myths are the result of sloppy thinking and the failure to insist on credible evidence to support beliefs and claims. Popular myths about poverty abound. Two of the more common ones have attained a high degree of acceptance because influential people have, for one reason or another, relaxed their guard. They have not applied their usual skeptical "filter" to information and have not insisted on high standards of proof.

"The lack of affordable housing is at the root of homelessness."

This quote, attributed to author and social commentator John Ralston Saul,1 is a typical expression of a common myth about the homeless. But it is not even remotely true. All of the recent evidence from reputable studies suggests that homelessness (defined as the condition of living on the streets or in emergency shelters) is largely a problem of mental illness and substance (including alcohol) abuse. There is also an increasing problem of disaffected and rebellious youth living on the streets of some of our large cities. However, there are not large numbers of people who are reduced to being homeless because of high rents.

Social assistance, which is available to anyone with no other resources to draw on, provides enough income to cover, at the very least, food and shelter, even in our largest cities. There is absolutely no financial reason for any Canadian to be homeless.

It is the case that there is a "tight" housing market (with vacancy rates below 2%) in about one-third of our urban centres, including Toronto and Vancouver. This means that it can be difficult for someone to find an "affordable" apartment (usually defined as a unit costing no more than 30% of the tenant's income) in a timely manner. In the other two-thirds of urban communities (including Montreal, Edmonton, and Winnipeg), it would not be difficult for someone to find an affordable unit in a timely manner. Canada has about 600,000 social housing units in which recipients pay no more than 25% of their income in rent. Presumably these units are given to the most needy Canadians.

The main problem with the lack-of-affordable-housing myth is that it can lead to an incorrect policy prescription. The building of more "affordable" housing, by government or by charitable groups, is unlikely to have much effect on homelessness. The appropriate solution may well be better programs directed at substance abusers and better counselling for people recovering from mental and emotional problems. Some amount of homelessness , particularly that relating to deinstitutionalization and refugee claimants, appears to be intractable.

"Canada's poverty rate is higher than that in most other industrial nations."

This particular myth is so blatantly incorrect that, in the light of the widely-publicized debate about poverty measurement over the past decade, its promotion borders on deceit. A recent expression of this myth comes from Patricia Orwen, social policy reporter with the Toronto Star. She states: Of the seven industrialized nations (the US, Australia, Germany, Canada, UK, France, and the Netherlands), Canada and the US have the highest women's poverty rates, 13 and 15% respectively. (Toronto Star, June 1, 2001, p. A2)

Orwen makes this statement as though it were unambiguous fact. There is no reference to the study from which this information is drawn, nor is there any explanation of the definition of poverty used. Readers are deceived. They are not told that there is, currently, no accepted international measure of poverty with which reliable comparisons can be made. Further, the measure used to compare the different countries is a completely relative indicator (half the median income) which actually measures inequality, and not poverty as most people understand that term. What Orwen's comment really means is that all of the industrial nations in the comparison group, save the US, have a more compressed (less unequal) distribution of income than does Canada. This tells us nothing about the degree of real deprivation (hunger, inadequate shelter, etc.) in each of these nations.

The danger with this particular myth is that it promotes policies that are radical and unjust. Economic growth, by itself, will not cure "relative" poverty: only significant redistribution of income will. The only solution, if you accept the myth, is for the state to more actively remove income from those who have earned it, and distribute it to those who have not.

1 John Ralston Saul, "Author's Tale of Two Toronto's," Toronto Star, June 1, 2001, p. A1.

Chris Sarlo teaches economics at Nipissing University in North Bay, ON. He is the author of Poverty in Canada, published by The Fraser Institute.