Anybody Found the Conclusion a "Surprise"???

The conclusion of these two articles are the same: a job is the best welfare (for employable individuals).

I am sure most people (other than hardcore lefties) wouldn't find it too surprising.

I just hope that the Quebec government will take a good look at these two articles, look into the studies these articles sited, and amend their policies to eliminate poverty. The last time I heard about the Quebec government's plan to eliminate poverty was pretty scary.

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PUBLICATION: National Post
DATE: 2007.11.05
EDITION: National
SECTION: Issues
PAGE: A15
COLUMN: Lorne Gunter
BYLINE: Lorne Gunter
SOURCE: National Post

The Poverty Industry's Latest Numbers Game

Why have anti-poverty groups recently been so obsessed with the allegedly growing gap between rich and poor in Canada? Because it is just about the only bit of "bad" news left on the poverty front. It's the only angle they have left to pressure politicians for more social spending -- and, of course, continued funding for anti-poverty groups.

The past decade has witnessed a tremendous success in the eradication of poverty. Even using Statistics Canada's overly loose definition of poverty, rates have fallen dramatically since 1996. Where a decade ago nearly 16% of Canadians were living with low incomes, today under 11% are.

After accounting for inflation, seniors' incomes have risen 15%, leaving just 6.1% of Canadians over 65 in low income.
The poverty rate for single moms has fallen from 52.7% to 29.1%; still too high, but a vast improvement in just a decade. Their median incomes have risen from $21,900 to $30,400, and the increase has been almost entirely from higher market earnings rather than social payments. Where just 10 years ago 60% of single moms' incomes came from government, now just 25% does.

Even the number of children living in poverty has fallen more than a third since 1996.
To be sure, pockets of dire poverty persist. According to John Richards of Simon Fraser University, who recently analyzed the issue in a study for the C.D. Howe Institute, aboriginals, the undereducated, the mentally ill, the physically handicapped and immigrants trapped in ethnic ghettos remain poor at unacceptably high levels. He also found that high effective tax rates on the "near poor" discourage some from moving from social assistance to work.

But for the vast majority of Canadians, the news is good. Moreover, that good news is even better than official statistics indicate.

StatsCan has no measure of absolute poverty -- the inability to provide life's basics such as food, clothing and shelter. Instead, Canadian poverty numbers are based on the agency's Low-Income Cut-Off, or LICO, which is a measure of relative poverty. Persons who must spend 20% more of their income on necessities than the average family in their area are considered to be "living in low income." While such a life may be difficult, it is likely not what most taxpayers would consider "poor." The real number of poor -- those Canadians who cannot provide the essentials of life--is likely half the official LICO rate.

Which brings us back to the recent focus on the gap between rich and poor.
It is true that the pre-tax, pre-transfer income of the top 20% of earners rose faster than the income of the bottom 20% in the past 10 years. Where the gap in yearly income between the top 20% and bottom 20% was $84,500 in 1996, it was over $105,000 in 2006. The ratio of income from employment, investment and private pensions was approximately 11 to one in 1996. Today it is nearly 13 to one.

This is the number anti-poverty advocates have been focusing on ever since StatsCan released it in the spring.
But it is a phony number. No one lives in a pre-tax, pre-transfer world.
What matters in the real world is how much money you have after governments take their cut and after you have received your GST rebates, child tax credits, public pensions, disability and so on.

The post-tax, post-transfer income gap in Canada -- the real-world income gap -- was 5.6 to one in 1996 and it is 5.6 to one today.

This is the gap that matters, and it hasn't increased even a fraction in the past decade. All the wailing and hand-wringing over the allegedly growing gap between rich and poor is nothing more than a cynical attempt to convince taxpayers and politicians that poverty is still a problem requiring huge government outlays and, of course, well-funded anti-poverty groups.

There might be another reason anti-poverty activists have shied away from the good news: The improvement in poorer Canadians' status had little to do with the social spending they so adamantly endorse.

As Professor Richards points out, "the introduction of new provincial welfare protocols probably explains much of the last decade's increase in the employment rate among groups with high rates of poverty." Provinces made it harder to get welfare, so employable welfare recipients went out and found jobs. As a result, poverty went down.

It's true the economy has been strong for the past decade, producing lots of new jobs and higher pay. Had the economy not been so strong, the poverty picture might not be as rosy. Still, cutting people off welfare probably had more to do with lowering poverty than did the strength of the economy, and far more than any social program.

Remember that in the late 1980s, Ontario had its strongest economy in the past 50 years, yet welfare rates in the province still doubled during that period because the Liberal government of the day kept raising welfare rates. It wasn't until rates were cut --and it made more sense for most recipients to work than live off welfare -- that poverty rates went done.

Work, not welfare, eliminates poverty.

lgunter@shaw.ca

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PUBLICATION: GLOBE AND MAIL
DATE: 2007.11.06
PAGE: A23
BYLINE: MARGARET WENTE
SECTION: Comment Column
EDITION: Metro

Why we're winning the war on poverty

MARGARET WENTE A terrific thing happened to single mothers and their kids over the past decade. They've become a lot better off. Single mothers today are far less likely to be poor and far more likely to have jobs. And their income has shot up.

This is bad news for the poverty industry, which depends on single mothers and their children to sell the public on its anti-poverty crusades. It's tough to make your case when your pool of sympathetic victims is drying up. It's even tougher when the economy and employment rates are booming. But the worst news of all (for poverty activists) is that the boom times are not the main reason why welfare rolls are shrinking. The main reason is dramatic social policy reforms.

This is the conclusion reached by John Richards, a respected public policy analyst at Simon Fraser University. His new study for the C. D. Howe Institute, called Reducing Poverty, finds that the best remedy for poverty is - guess what? - a job.

Back in 1994, when the national welfare rate peaked at nearly 11 per cent (13 per cent in Ontario), that idea was heresy. The best remedy for poverty was then thought to be more welfare. But Canada was in the red, and governments were forced to slash welfare to get a grip on their finances. Everyone predicted that more poverty would inevitably follow.

Something else was happening, too. The three biggest provinces began to realize that their poverty policies didn't work. Even during boom times, the welfare rolls didn't shrink and the poverty rate didn't budge. In Alberta, a senior civil servant named Mike Cardinal realized that welfare was doing awful things to aboriginal communities.

Over the next few years, Alberta, Ontario and British Columbia all tightened eligibility requirements and cut benefits. "Get a job" became a policy goal.

Social workers were now directed to divide people into two distinct groups - those who were "employable" and those who, because of mental or physical disabilities, were not. The idea was to restrict welfare access for the "employable" and give them job training or help with child care or whatever else they needed to get a job. At the same time, benefits for the truly disabled would be made far more generous.

In B.C., the number of people on welfare who were deemed "employable" shrank 90 per cent, while the group deemed unemployable tripled.

There were two other important elements to this tough/soft love approach. The federal government tightened up on unemployment insurance.

It also increased child benefits, which supplement wage rates for low-income families.
Here's what happened: From 1994 to 2003, the number of people on welfare across Canada fell by half. It's now under 6 per cent - the same rate as in the 1970s. In the decade between 1996 and 2005, the poverty rate (as defined by Statistics Canada) fell from 16 per cent to 11 per cent. The war is far from over, but the progress is impressive.

The most dramatic changes were to single-mother families. Their poverty rate fell from 56 per cent to 33 per cent. In 1996, single mothers made a median income from work of only $8,600 (after tax).

By 2005, that figure had nearly tripled, to $22,200 (all rates in 2005 dollars). In other words, more single mothers were employed, and their earnings had gone up.

Canada's welfare reform happened piecemeal and by stealth. Although nobody really noticed, we've headed down the same path as the United States and Britain. In all three nations, both welfare and poverty rates have markedly declined.

The difference is that, in the U.S. and Britain, there's been a certain convergence among liberals and conservatives about what works. Not in Canada. You can be excused if you are under the impression nothing's changed. "It's still the rhetoric that poverty is as serious, or more so, than ever," says Mr. Richards. Especially if you listen to the poverty industry.

mwente@globeandmail.com