Basic Income Part II: The Current State of Poverty and Income Assistance in BC
This is the second post in our four-part series exploring the concept of “Basic Income”. Our first post focused on providing background information on the topic. It prompted more than 60 comments on this site and more than 450 comments on my MLA Facebook page. As a consequence, it is apparent to us that there is broad interest in the idea.
1. Responding to your comments
Our introduction to the concept of basic income received a huge number of thoughtful responses. Many shared their own stories about challenging periods in their lives: time spent living in poverty or on the edge of it, working in precarious or underpaid positions with uncertain futures, and struggling to raise a family or achieve personal goals in this context. We are grateful to everyone who took the time to share their feedback on the idea of a basic income, for the thoughtfulness of the comments and the support and commitment that so many showed to working towards a future that is more just and equitable for all, whether through a basic income policy or other means.
The comments showcased a number of common hopes that people hold for a basic income policy, dissatisfaction with the status quo, and concerns for the risks that a basic income could involve. In this post we will elaborate on some of the themes that we found in the responses, diving deeper into the situation we are in today.
In the responses to our backgrounder, the most widely expressed sentiment was hope in the idea that a basic income policy could end the poverty cycle, eliminate the traps that keep people in poverty throughout their lifetimes and across multiple generations, and treat those in need with greater dignity. In response, in this post we want to focus more closely on the current condition of poverty in BC and our response to it, and highlight how a basic income might offer an alternative solution.
2. Poverty and Social Assistance in BC
We have already highlighted BC’s higher than average rates of poverty, with between 11-16% of adults and 16-20% of children living in poverty, depending on the measure used. Poverty disproportionately affects children and single-parent families: more than half of all children living in single-parent families were living in poverty in 2013, compared to 13% for children in couple families. Aboriginal people, recent immigrants, and people with disabilities are also more vulnerable to poverty.
Estimates of poverty levels differ according to the measure used. The low income measure, low income cut-offs, and the market-based measure are three measures commonly used in Canada.
- The low income measure (LIM) is a relative measure, set at 50% of median adjusted household income.
- The low-income cut-off is an income threshold below which a family will likely devote a larger share of its income on the necessities of food, shelter and clothing than the average family. The average family spends 43% of their income on food, shelter, and clothing, whereas families below the low-income cut-off usually spend 63% of their income on these necessities.
- The market-basket measure is based on the estimated cost of purchasing a “basket” of goods and services deemed to represent the standard of consumption for a reference family of two adults and two children, including: a nutritious diet, clothing and footwear, shelter, transportation, and other necessary goods and services (such as personal care items or household supplies). The cost of the basket is compared to disposable income for each family to determine low income rates.
Each of these measures result in slightly different statistics, hence the range of numbers used.
3. Details of current social assistance programs
There are a myriad of programs that make up income assistance in BC, specific eligibility requirements, and a complex application process that may include interviews, home check-ins, and mandatory work search periods. In your comments, many of you spoke of the invasiveness, restrictiveness, and stigma of current income assistance programs.
Welfare rates in BC today are $610 per month for a single individual without a disability who is expected to look for work. The rates haven’t increased for nearly 10 years. Advocacy organizations estimate that a single individual on welfare has only $18 per week to spend on food; the organization Raise the Rates recently ran a challenge to illustrate the difficulty of eating on such a small budget. One individual who we spoke with recently shared his personal story of living on income assistance: he is disabled, and so receives income assistance for persons with disabilities, which totals just over $900/month. He wants to return to school to receive training and accreditation, but the strict limits on how much he can save have prevented him from doing so. He is seeking work, but to improve his prospects he needs to get more education, and the claw back of dollars earned has been a disincentive for him to seek out a low-paying job. Furthermore, the affordability crisis has affected him directly: he was evicted because the land on which he lived was being developed into condos, and his new rental unit requires almost all of his income, thus requiring him to rely on food banks for food. He calls being on income assistance “humiliating and constricting”. This individual’s story highlights a number of struggles that many face in trying to move their lives forward while on income assistance.
It’s important to note that many British Columbians living in poverty are not welfare recipients. Working poverty is a growing problem across BC: Vancouver had the second-highest rate of working poverty in the country (behind Toronto), at 8.7% in 2012, although this percentage is likely higher now given the recent affordability crisis affecting the region. The high cost of living, the low minimum wage, and the growth of precarious employment have contributed to rising levels of working poverty. The minimum wage was recently raised to $10.85/hour, whereas the estimated living wage is $20.02 in Victoria and $20.64 in metro Vancouver. The living wage is what a family needs to cover basic expenses, such as food, clothing, housing, child care, transportation, and a small savings in case of emergencies. It is calculated based on a two-parent two-child family, with both parents working full-time. The discrepancy between the minimum wage and the amount of income required to cover basic expenses leaves many families across our Province below the poverty line.
4. Basic income and poverty reduction
A basic income policy could offer a solution to poverty in BC, if the payments are constructed to ensure that all recipients, in different parts of the province, with different family sizes and different challenges, are able to live above the poverty line. If a basic income replaced our current income assistance programs, individuals in need would no longer have to prove themselves eligible or justify their need for assistance, through completing mandatory work searches, interviews, or home check-ins, for example. Simply falling below the income threshold would automatically qualify you. Replacing our invasive welfare system with a basic income that is framed as an automatic payment program, similar to the tax credits and payments many sections of our society receive today, could reduce significantly the stigma around receiving income assistance. This in itself could have a dramatic effect on the self-esteem and social inclusion of those in need of support.
One issue that is often brought up in discussions of basic income and poverty reduction is the issue of cost. The cost of a basic income policy is potentially significant but is hard to quantify, since it depends on a wide range of factors, including the amount paid, the eligibility requirements of recipients, and which services it will complement and which it will replace. These factors will be discussed in greater detail in a future post. However, it is essential that, in considering the question of cost, we consider the cost of maintaining the status quo, including the hidden and indirect costs to society of our current levels of poverty.
The Canadian Centre for Policy Alternatives estimates that poverty in BC costs society $8.1-$9.2 billion annually. This figure stems from the direct costs of social assistance programs to the government, as well as the adverse consequences of poverty, which have significant costs borne by society as a whole. The consequences of poverty include poor health, due to high levels of obesity, alcohol, tobacco and drug use, as well as inadequate nutrition and physical inactivity), high levels of stress and mental health problems, higher than average levels of domestic abuse, low literacy rates, poor educational performance, and high crime rates. The associated costs of these consequences show up through higher usage of public health care, increased policing needs and costs to the justice system, and lost productivity and economic activity.
As noted in our previous post, the basic income pilot project undertaken in Manitoba showed significant impacts on the healthcare system in particular: it reduced hospital visits by 8.5%. The decrease in hospital visits was attributed by researcher Evelyn Forget to the reduction of stress in low income families, which resulted in lower rates of alcohol and drug use, lower levels of domestic abuse, fewer car accidents, and lower levels of hospitalization for mental health issues.
Homelessness, which we explored in a series last winter, is inextricably linked to inadequate income for those working and receiving assistance, a lack of affordable housing, and inadequate access to support services. Homelessness has enormous costs to the BC Government, and a number of studies have found that it costs less to directly address the problem of homelessness and invest in prevention than it does to manage homelessness (see here and here, for example). A basic income could provide an integral part of ending homelessness, but it could not completely supplant other social services, such as supportive housing and mental health and addictions services.
The story of youth in transition is similar: as noted in the previous post, a recent report by the Vancouver Foundation finds that paying all youth ages 18-24 transitioning out of foster care a “basic support fund” of between $15,000-$20,000 would result in overall savings to the Provincial Government of $165-$201 million per year, due to the adverse outcomes youth in transition currently experience and their associated costs.
In your comments, many of you raised concerns specifically with the idea of paying youth a basic income without a work requirement, suggesting that doing so could undermine the development of a work ethic or discourage their entry into the work force. Given the range and magnitude of adverse outcomes that youth in transition currently experience, such a concern may not be warranted, or perhaps should not take priority over helping them avoid such outcomes by whichever means possible. Beyond youth specifically, there was a hesitation expressed by a number of commenters that a basic income would provide a strong disincentive for many people to work, and would thus undermine their sense of self-worth and identity. On the other hand, many of you expressed the mirror image of this thought: that a basic income would provide freedom from the constraints and stress that currently plague those on income assistance, allowing individuals to better their lives, go after their dreams and realize their potential. Which version of this thinking we adhere to depends to a great extent on our assumptions about what factors motivate and prevent people from working, and what gives people satisfaction and fulfillment. This issue will be further explored in our next post in this series.
5. Conclusion
We would appreciate further thoughts from you on the state of poverty and assistance in BC and whether you think a basic income could offer a solution. If you’d like to share a personal story or thoughts that you would prefer not to make public, please email us at andrew.weaver.mla@leg.bc.ca. In our next post, will explore the future of work, focusing on the rise of precarious employment and the effects of technological advance. We will discuss what these changes to the world of work will mean for all of us, and how a basic income policy might enable us to respond to these changes as a society.
16 Comments
It is important to note that financial poverty is only part of the problem.
Poverty is a mind-set which includes: hopelessness, lack of or faulty education, local crime, societal mindset, medical conditions including addiction, local lack of opportunity, among others.
A UBI not only deals with financial poverty, but helps reshape the environment around the individual.
It is critical that the Basic Income not be means-tested, but Unconditional as to income.
Means-testing creates benefit cliffs. One of my business associates had a worker who recently refused a salary increase, because over $29,000/yr she would lose more in benefits than she would gain after tax. She actually said “I can accept the raise only if I work fewer hours.”
In Massachusetts, a single woman with two children and no income can receive $50,000/yr in benefits [CATO]. By the time she reaches $60,000 in gross income those benefits are all gone.
Does it make any sense at all that someone trying to lift themselves out of poverty faces a higher effective tax rate when loss of benefits are included, than the wealthiest of individuals?
Thanks for your service, and attention to the complex social safety net
If you will though, consider the relatively simple provision of global economic enfranchisement, to reduce the demand on local social contracts
https://en.m.wikipedia.org/wiki/User:Tralfamadoran777
Thanks so much for your kind indulgence
I second the comments of R Scott. The reason for so much attention to families instead of single people is that families gain sympathy whereas the former do not. This represents political pandering at its worst. For single men, Canadians have very little if any compassion at all. Talking with a single female relative in her early 30s, I learned that not one of her many female, Canadian-born friends either intends to or can imagine ever having a child in this society. When the cost of education to eventually earn enough to afford a child is impossibly high—to say nothing of the cost of living—they have entirely given up on the idea. Because their friends who do have children are worse off than they are, they know what to expect. In sort, the majority of her friends expect to live in poverty for the remainder of their lives. What’s next? Paying women to have babies as the government did in Quebec?
I was involved in an automobile accident on December 25,1965. I was 2 years old. The accident left me partially paralyzed on the left side, a compressed spine, blind in the right eye, as well as spasticity throughout. ICBC wasn’t around in 1965 and our insurance agent claimed bankruptcy so we received no monetary compensation. Over the next 50 years I was able to work full time at odd jobs, most at minimum wage. I am now on CPP Disability pension of just over $700/month and working very part-time. According to Social Assistance, I make $9/month too much to qualify for the BC Disability pension. This is leaving me with no chance of saving any money after I buy food and pay for shelter. I can’t even afford the basic health necessities such as prescriptions or going to the dentist.
I am in my mid 50’s, I have to work 3 jobs to survive and cannot afford to go out EVER. I am wearing shoes over 2 years old, the bottom falling out and Im suppose to be working less these days.
I have vertigo but that doesnt matter because I work for myself for part of the year and a job in a different province for winter I cannot even get welfare… Please help.
My house is even up for sale and its not selling…and if and when it does, I wont get anything out of it…HELP QUIVCK…what is the hold up?
I really appreciate that someone is taking a serious look at a basic income. To add my piece, however, more than just families need to be looked at. For example, I am a young person (24), single, with a post-secondary diploma working a better paying job than many in my area. However, due to a very high cost of living, I pay somewhere between %60-%70, if not more, of my income to basic necessities. I can’t afford a car, let alone save for a house. It means I have never gone traveling, and can only see my family when they can come out to see me. It means that so many parts of what it means to be an active member of my community are out of reach for me. And frankly, I don’t know of anyone else my age who is better off. And there is no help for full-time workers, that’s for sure.
The govt really dont care that is plain and simple,and i dont see them caring anytime soon
I am a 67 year old senior who has battled a stroke and a cancer scare. This renders me unemployable. My pensions add up to just over 13 hundred dollars a month which is not a livable wage given I must pay rent, eat, and buy my medications (with a $600 deductible.) I am almost a prisoner in my home as I can not afford to leave the house. As a single person I am responsible for 100% of my living expenses. This is true of all of my peers. My only family lives here on Vancouver Island and forcing me to move to a less expensive area to live would probably mean my death as I would have to leave everybody I know and love and depend on. Perhaps including all who are living in poverty should be examined.
Thank you for what you are doing for families but i sincerely hope it is not at the expense of others
I totally agree, single people have it rough…No husband or others to rely on…soon we will be bag ladies…and no one seems to care.
I dont even have friends and am totally alone as I cant afford to go out and meet others.
The constant stress of just trying to survive and always a paycheck or two behind is killing me
3W55
Kudos Mr. Weaver for bringing this issue to the forefront! “Poverty and Income Assistance” is a complex issue that cannot be addressed by one simple concept such as “Basic Income”.
I’ll use an extreme example to make my point … “Should an individual addicted to heroin be provided with a basic income before addressing their addiction or should they willingly or forcibly resolve their addiction before receiving a basic living income allowance?” Then, are adequate addiction services available to make the transition for this individual?
Should we provide a “Basic Income” to individuals living in say Van or Vic who have no potential of providing for themselves when they could live a comfortable life without “Basic Income” if they relocated to and worked in … say … a small interior community where living expenses are a fraction of Van and many jobs and Provincial services are readily available. I imagine provincial relocation support would be required in this scenario.
I made these crucial life decisions 7-years ago when I was diagnosed with health issues that prevented me from working. I was 52. My investments would no longer allow me to live in Richmond but were adequate to sustain me in the West Kootenay region. I now approach 60-year-old and have not drawn against any governmental support and am very proud of that.
To adequately address all aspects of poverty … which I support … we must be prepared to make very tough decisions … such as me, I left family, friends, co-workers, and associates … basically my entire life … to ensure I was self-sufficient without assistance.
Again, Kudos! Respectfully, War Peterson.
It sounds pretty good- giving people a basic income so they can afford to better their situation without having to worry about the basics instead- however, a guaranteed income would also give the state even more power and control over your lives. What no one is talking about are the invisible strings attached to this that would inevitably be involved. Certain conditions the government puts on this income could also apply, as in ‘do this’ or your benefits will be cut off- they could control us even better under such a scheme – no one sees the obvious Marxism involved here.
As a healthcare social worker I have been assisting people to navigate a myriad of benefits. I cost the taxpayers a very decent living wage. A large portion of my work day is spent trying to fill gaps and cracks with insufficient glue. The programs, services, subsidies, benefits, grants etc are multi level and often intersect to cross one another out. A person with disabilities on income assistance can not receive a BC Housing rental subsidy. The person with a disability that is not on income assistance and on Canada Pension plan disability can not receive a home owners grant. There are several provincial and federal programs that could be eliminated entirely and save tax dollars. When a person turns 65, all low income funding is governed federally through income based scale and elders are topped up through the guaranteed income supplement. This method could apply to all Canadians for life. From a fiscal perspective, the income supports and programs on all levels are costing huge amounts to manage and not getting to the people. Much of the money is caught up paying people like myself. I hope the basic income can make much of my job absolute.
This really supports the concept of regional calibrations… $15 and hour as a generalization,based on a 40 hour week, may be livable for some communities but not for Victoria or Vancouver; also, living single is more expensive than living communally.
If someone is living on publicly funded long term support then they might consider moving to either a less expensive area or to a communally based situation; this isn’t to create low income areas, its more to take the strain off of people who are living low to mid income and seem to be the perpetual brunt of provincial and federal tax schemes… If anything, done well, this could help create healthier and more diverse communities.
Thank you so much for this article. My son has autism and I know for a fact that he would never be able to live independently with the disability income he receives, despite all the other subsidies he receives for medicare, for example. However, the bus pass has just been denied to these people. they now have to pay a huge increase, which definitely will come from their pension, which will make it more difficult for them to get healthy food, for example. Again, thank you for truly explaining the situation in detailed.
You do realize that every example given is for FAMILIES–when, proportionally, far more individuals, unmarrieds and/or otherwise SINGLE individuals are in need of supports? It’s all well and good to feed children with parents. It is enirely a BETTER idea to seek out and support those who–perhaps because of poverty—cannot ‘become’ part of a family, cannot sustain a familial relationship or—for that matter—cannot even find a mate?