Research, Reviews, & Updates

The ESPC provides research, reviews, and updates on a range of social issues

The Costs of Poverty

Review in December 2008 Research Update of:

The Cost of Poverty: an analysis of the economic cost of poverty in Ontario. Report by Nathan Laurie, Ontario Association of Food Banks, November 2008.

The Costs of Child Poverty for Individuals and Society: a literature review. Report by Julia Griggs and Robert Walker, Joseph Rowntree Foundation, October 2008.

Estimating the Costs of Child Poverty. Report by Donald Hirsch, Joseph Rowntree Foundation, October 2008.

The Economic Costs of Poverty in the United States: subsequent effects of children growing up poor. Report by Harry Holzer et al., Center for American Progress, January 2007.


Poverty is expensive. Some new reports, from the UK, the US, and across Canada, are demonstrating that the costs of poverty over the long term are far greater than the costs of prevention. What‟s more, these studies have deliberately used conservative measures in estimating the financial costs of poverty to ensure that the cost of poverty is not exaggerated or overstated – which means that in all likelihood, the true costs of poverty are even greater. The numbers below are summarized from 4 reports that have recently been added to our library on the costs of poverty to society. Note that there are, inevitably, great challenges in calculating the financial costs of poverty – while the various reports are useful tools and give an idea of how poverty reduction programs could save money, the different methodological approaches yield different cost estimates and are not directly comparable.

  • Overall: Overall cost of poverty in Ontario: $10.4 billion to $13.1 billion per year, which is equal to $2299 to $2895 per household in Ontario per year, or 5.5 to 6.6% of Ontario‟s GDP. Overall cost of child poverty in the US: $500 billion per year, or 4% of GDP.
  • Intergenerational Effects: Children are not poor by their own making, and there is evidence demonstrating that children who grow up poor are less able to escape poverty later in life. Lost income tax revenues created by lower incomes of adults who grew up in poverty: in Ontario, $1.3 billion to $1.6 billion per year; in Canada, $3.1 billion to $3.8 billion per year. Lost productivity resulting from the experience of growing up in poverty or near poverty in the US: $170 billion per year, or 1.3% of GDP.
  • Health: Growing up in poverty negatively affects health – this conclusion is supported by well-documented and peer reviewed studies that have examined the relationship between socio-economic status and a variety of health indicators throughout the life cycle. Cost of increased health expenditure and reduced value of health in the USA: more than $150 billion, or 1.2% of GDP per year. Cost of additional primary healthcare expenditure resulting from child poverty in the UK: approximately £859 million per year. Cost of additional acute healthcare expenditure resulting from child poverty in the UK: £1.2 billion per year. Potential health care savings of raising the incomes of those in the lowest quintile to be equivalent to the income of the second-lowest quintile: in Ontario, $2.9 billion per year; in Canada, $7.6 billion per year.
  • Crime: Although crime is correlated with poverty, it is difficult to establish definitive causal links between the two. A number of studies, however, demonstrate links between crime and other indicators of poverty, such as educational attainment, literacy levels, and neighbourhood inequality. Additional costs of crime created by child poverty in the US: $170 billion per year, or 1.3% of their GDP. Cost of child poverty for additional police and criminal justice services in the UK: £1.2 to £2.9 billion per year. Potential savings in the cost of crime by reducing poverty and raising literacy levels: in Ontario, $250 to $550 million per year; in Canada, $1 to $2 billion per year.

Class Matters: Cross-Class Alliance Building for Middle Class Activists

Book by Betsey Leondar-Wright, 2005
Reviewed by Anette Kinley in December 2008 Research Update


 

It is often the case that organizations or groups trying to address poverty and working-class issues are mainly, if not totally, represented by middle-class people. The differences in perspectives and life experiences between classes can lead to a variety of misunderstandings, missteps and frustrations that create barriers to working together effectively toward common goals.

Class Matters is an engaging collection of stories and practical ideas from experienced advocates that illuminate how the class differences that can limit the progress of groups working for social change can be overcome. To put it in author Betsy Leondar-Wright's words, “We all have the choice to get by, get over, or get together. This book is for those who take the “get together” path, and its goal is to help us get together across class differences.” (page 7)

Even though I haven't read it from cover to cover – yet! – I am convinced that Class Matters should be recommended, if not required, reading for people working for social change. It is of particular interest to those who are working with, or seeking to work with, people from diverse class backgrounds (and across cultures, ethnicities, gender, sexual orientations, etc.).

The variety of issues covered by this book makes it difficult to summarize. One of its main focuses, however, is recognizing and countering the socially conditioned, and often unconscious, behaviours and assumptions that distance middle-class activists from the working-class people they are trying to help.

“… we all make mistakes. There's not a middle-class person alive who hasn't said dumb,insensitive things that step on working-class toes. … As we talk, working-class people notice how oblivious or how aware of class issues we seem, and make decisions about how much to collaborate with us based on those evaluations, among others factors. The goal of reducing the classism in our speech is not to keep ourselves out of trouble by avoiding angering working-class people, and it's not to reach some kind of perfect non-classist purity. The goal is to make ourselves more trustworthy and to alienate working-class people less so that we can work together for economic justice and other common goals.” (page 89)

The book concludes with practical tips and resources to help break down the barriers of class difference and enable groups to work together effectively for social change. Some of these tips include: 

  • Moving from pretense to authenticity: building trust through honesty in dialogue.
  • Moving from politeness and caution to openness and humor: build relationships through friendliness and respect.
  • Moving from competition and superiority to confident humility: recognizing our common limitations as human beings.
  • Moving from excessive abstraction to groundedness: rooting discussion and action in reality.
  • Moving from guilt to balanced responsibility: avoiding being mislead or immobilized by guilt.
  • Moving from individual achievement to community interdependence: seeing the big picture, balancing individual tasks and relation-ships/working together.

Class Matters is now at the top of my reading list! If you're experiencing, or just plain interested in, the tensions and challenges (and rewards!) of cross-class work, you might want to add it to yours, too.

 

Poverty Reduction Policies and Programs

Series of provincial and territorial reports by various authors, edited by the Canadian Council on Social Development, 2009. 

Reviewed in July 2009 Research Update


  • Did you know that, unlike in most parts of Canada, poverty rates in rural Nova Scotia are higher than those in urban Nova Scotia?
  •  Did you know that 22% of Yukoners have reported having financial difficulties securing food?
  • Did you know that 50% of children of Aboriginal descent in Saskatchewan live in poverty?

This series of reports takes an in-depth look at poverty, poverty reduction policies, and community action on poverty in 9 provinces and 2 territories (remaining provincial/territorial profiles are forthcoming).  The reports are each written by different authors, and highlight trends and statistics, explain the historical context, and examine current initiatives.

The Alberta report examines our province’s historic boom-bust economic cycle and patterns of poverty. It looks at government responses to poverty: the development of a social safety net, subsequent erosion of supports, and more recently, the challenges posed by the latest economic boom. The Alberta profile also takes into account the growing role of the voluntary sector in addressing poverty, and questions what this might mean for poverty reduction in the province.

We know that many of the provinces and territories have similar struggles to those we face in Alberta when it comes to poverty and the attempt to eliminate it. This series of reports shows how other jurisdictions across Canada are dealing with poverty – both at the local and provincial levels. Unique programs, innovative solutions, and strategic partnerships are being creatively implemented from coast to coast to coast.

For example:

 

 

 

The Newfoundland and Labrador report documents how the consistent work of community groups and government, together with a depressed economy after the collapse of the fisheries shaped the political, social, and economic context in which the province’s Poverty Reduction Strategy – one of the first in Canada – was created. The Poverty Reduction Strategy followed years of collaborative effort marked by both victories and losses for anti-poverty advocates. While there is still a long way to go in terms of dealing with poverty in Newfoundland, the report notes that a lot of progress has been made since the implementation of the provincial strategy in 2006: more people are working, fewer are reliant upon Income Support, and the number of people living below LICO is falling. What can Albertans learn from the experiences of Newfoundlanders?

The BC report similarly looks at the history of poverty and poverty policy responses in the province. It looks at how frequent political shifts and the boom/bust economic cycle in the province have affected social programs and the well-being of communities. It notes that while there are some initiatives on behalf of the government to address poverty, several population groups are now experiencing increased risk of poverty.  Like in Alberta, government seems to have taken a backseat; and it has been civil society actors that have played – and continue to play – the central role in poverty prevention and reduction in BC.

This resource is useful for anybody interested in learning more about poverty and poverty reduction programs across the country. Each provincial/territorial profile is written by local experts, and the references contain information about many of the groups and individuals that work both behind-the-scenes and on the front-lines in poverty reduction. You can download the individual reports from the website of the Canadian Council for Social Development (although beware, there have been some troubles with this website of late), or you can access hard copies in our library.