The good we secure for ourselves is precarious and uncertain until it is secured for all of us and incorporated into our common life – Jane Addams

Jamie Swift, Director
Justice, Peace and Integrity of Creation Office
Sisters of Providence of St. Vincent de Paul
Kingston, Ontario
12 July 2011

POLICY AND POLITICS

The Commission for the Review of Social Assistance in Ontario is another welcome – and tentative – step. The destination is the eradication of poverty in one of the richest places in the world.

The Commission’s discussion paper “Issues and Ideas” is all about policy. Which is important because the Commission’s very existence is a recognition that current policies have failed. How else to explain levels of structural poverty (Low Income Measure-After Tax, LIM-AT) of 13.1 per cent, the highest in some thirty years?

But we are wrestling with politics as well as policy. Ontario has clearly failed to deal in any adequate way with poverty because of a lack of political will. It has not been due to lack of knowledge about the problem. We have not summoned the moral and ethical strength to address the savage inequalities that are a stain on the fabric of our province. Over twenty years ago, after extensive consultation and study, the Transitions policy report was published by the Ontario’s last official Social Assistance Review. The organizers of the 2011 version, this Commission, acknowledge that even though Transitions was a “landmark” study, “some of the interim steps it recommended were implemented.” Implicit is the unfortunate fact that little was done with the policy ideas set out in 1988. Things were stalled by the recession that started in 1990 and a lack of political will. Although social assistance rates were raised before 1995, after that time Ontario witnessed an attack on the poor rather than an attack on poverty. Politics intervened.

In 2004, after a change of government, hopes were high that the journey to a socially just Ontario would resume. That did happen, though the steps were small and tentative. The government started to raise the minimum wage, a crucial step forward in any effort to address working poverty. But there was no really sustained effort at poverty reduction – let alone poverty eradication — even though Ontario was at the top of the business cycle. The government made other political choices, concentrating its public provision efforts on health and education spending.

Once again, politics intervened. Social justice advocates recognize that ours is an uphill journey. This is because poverty is seldom a top-of-mind issue for voters. There is a dominant focus on issues such as wait times for medical procedures, class sizes in education or the general economic outlook — issues that concern broad swaths of the voting public. Political technicians, seeing that poverty is not a ballot issue and recognizing that the poor are cynical or resigned and are much less likely to vote, act accordingly. Campaign platforms tend to ignore or de-emphasize poverty. Social assistance reform disappears from sight. Nevertheless, the political advocacy efforts of low income people and social justice advocates have re-established political momentum for poverty eradication in Ontario in the past five years. (The Sisters of Providence have contributed to this provincial effort by supporting the Interfaith Social Assistance Reform Coalition as well as supporting the local social justice movement here in Kingston.)

As this Commission undertakes its consultations and research, Ontario is entering an election campaign. Advocacy organizations, understanding the importance of politics, will be attempting to make poverty eradication an issue during the election campaign. We know, perhaps better than anyone, that this will be a hard slog. For this reason – and because promoting a serious public debate on poverty will enhance the chances of the Commission’s recommendations being acted upon – we urge the Commission to publish an interim state-of-the province report based on your consultations so far. Doing this before the Commission’s scheduled late autumn release of its Option Paper is a politically realistic approach to dealing with pressing policy issues. It is equally important to recognize that we do not live in a political vacuum and that changes will occur only if there is the political will to implement them.

Working Poverty (see appendix, passim)

A canard is not simply the French word for a duck.

A canard is false report, a hoax. One canard that unfortunately persists in discussions of poverty, social assistance and the labour market is that our most vulnerable neighbors are insufficiently motivated to seek employment. The implicit assumption is that life on social assistance is better than work. While it is true that social assistance recipients may be eligible for some benefits not available to low wage workers in the contingent labour force, does this mean that there is a “welfare wall” that tempts people to avoid the world of work? Is it not more appropriate to question the structural changes in the labour market that mean the lower end of this world is populated by workers whose jobs offer them poverty wages and no benefits? Is it not more appropriate to refashion Ontario’s social assistance system, modernizing to confront these structural changes?

The Commission’s Issues and Ideas background paper indicates that “the nature of work in Ontario is changing.” More precisely, however, work in Ontario has been changing for a generation. The rise of a contingent or just-in-time labour market in the expanding service sector has been recognized since the 1980s. This is a fundamental reason for the rise of poverty and social inequality in the province. Even if a single person has a full-time, year-round job at minimum wage, their income will still be more than a thousand dollars below the poverty line. One in three Ontario children living in poverty were part of families with full-time, year-round work. (LICO-BT) However, many people trapped in the contingent labour force do not have these kinds of jobs, forced as they are into taking fewer hours whenever they can. We must understand that many employers have a stake in this labour market model for the simple reason that they benefit from the low-wage, just-in-time workforce.

Issues and Ideas asks how the needs of employers can be addressed. It asserts that “understanding employers’needs is critical” in matching employment services to those needs. It is important to locate the interests of different economic sectors here. The largest financial institutions have produced important research on social assistance inadequacy. Toronto’s Board of Trade has promoted social inclusion, better public housing and transportation policy, more green jobs. But the mainstream of the business community has not been conspicuous by its presence in advocacy efforts aimed at improving employment opportunities for people receiving social assistance. This does not mean that efforts to reform the social assistance system should ignore the needs of employers. But it does mean that we must recognize that different economic sectors have different interests. Firms offering contract security and custodial services are likely to offer poverty level wage while major firms in resource, finance and manufacturing offer jobs with decent wage and benefit packages.

For this reason, it is up to government to do two things. 1) Play a facilitating role by engaging employers as partners, assisting them by matching employment services to employer needs. 2) Government also needs to play a stronger regulatory role by developing and enforcing labour standards that protect workers from employers seeking to take advantage of their vulnerability in the face of ample labour supply and the structural changes mentioned above. Newcomers to Canada, uncertain about their rights and fearful with respectto their immigration status, are particularly vulnerable. (see Swift, J. et al, Persistent Poverty: Voices from the Margins, Toronto: BTL, 2010, esp. Chapter 15 “It’s not my Country Yet…”) According to the Workers Action Centre’s 2011 report Taking Action Against Wage Theft,

“Not only is the Employment Standards Act (ESA) a central feature of labour market regulation, it is also an important social policy tool in fighting poverty. The Ontario
government has stated that poverty reduction is a key goal of the Employment Standards program — poverty reduction will be aided by improving ‘the protection of vulnerable
workers and to ensure fair workplaces by getting tough on employers who contravene employment standards legislation and regulations.’ (Ontario Ministry of Labour) Workers expect the Ontario government to live up to this commitment and to make the changes necessary to make a real difference in their lives.”

The Commission needs to take the real world of the labour market — fraught as it is by very real imbalances in power — into account in formulating its recommendations with respect to working poverty. The Commission can remind government in the strongest possible terms that it has an ethical responsibility to ensure that full time work enables earners to receive incomes above, not below the poverty line. This would add momentum to the living wage campaigns currently underway in several Ontario communities, including Kingston. The Commission also needs to promote an activist approach to social assistance grounded in the principle that it is ethically irresponsible for the government to claw back incomes of social assistance recipients who have managed to secure modest labour market incomes, at least until such time as their total income exceeds the poverty line. A job needs to be a real ticket out of poverty.

Deep Poverty

If a job is currently no guarantee of a ticket out of poverty, social assistance as presently structured guarantees a continuing cycle of hunger and hardship. The Commission’s Issues and Ideas paper acknowledges that people on social assistance cannot afford healthy diets. (This means that the poor get sicker, quicker, with substantial costs to the state — see Persistent Poverty, above, ch. 10 and 12 and a substantial body of scholarly research.) The paper also notes the “difficult trade-off” between allowing people on social assistance to eat well (“providing adequate levels of support”) but doing so “without creating barriers to work.” This balancing act is an example of pragmatism in action. It reflects an assumption, common among many economists, that people are rational actors who will choose dependence on state support over labour market participation because of the ostensible benefits offered by the former choice. As outlined above, this is a canard.

The situation of a single adult in Ontario is a case in point. The program known as “Ontario Works” provides this person with $7,325 annually, just less than 40 per cent of the poverty line (LIM-AT) income of $18,582 annually. This translates into a basic income gap ($11,230) that dwarfs this person’s income. A single parent with one child receives $16,683 on Ontario Works just short of two-thirds of the poverty line. The pragmatism that would have us believe that people choose social assistance over employment assumes that life below the poverty line is somehow bearable. It is not based on evidence, nor an appreciation of the real life experiences of low-income people in Ontario. Those experiences show that a complex set of issues – including unaffordable housing, inadequate child care, low wage work, illness and disability – characterize life on what recipients call “benefits.” The dizzyingly complex maze of rules governing social assistance, of which the Commission will hear, springs from the assumption that poor people will cheat the system and, like chronically misbehaving children, are in need of control. The system’s punitive character is underlined by the fact that Ontario Works requires applicants to divest themselves of virtually all their assets in order to qualify for benefits.

If the Commission were to address but one issue, it would be to put to rest the notion that low-income people depend on the state because they prefer social assistance to working. That said, it is important to recognize that rich countries with vibrant, competitive economies (Scandinavia and the Netherlands) have been able to design systems of public provision for their most vulnerable citizens that, by and large, keep them from falling into poverty. Countries like the U.S. and the U.K., with social assistance regimes more akin to the Ontario model, can hardly be held up as examples of economic success. Indeed, they are characterized by structurally high levels of inequality and poverty. While questions of broad economic and social policy are beyond the scope of the Commission, the northern European countries show clearly that there are alternatives.

The first step in improving Ontario’s social assistance system is the immediate introduction of the $100 per month Healthy Food Supplement as promoted by the Put Food in the Budget Campaign. As we have indicated, progress in poverty eradication is achieved when citizens act collectively in promoting the common good. It is due to the efforts of a province-wide political advocacy effort that the Commission has come into being. The immediate implementation of the Healthy Food Supplement would not only be an important, if modest, step in alleviating suffering and promoting healthier diets. It would also validate and encourage Ontario’s movement for social justice – the principal force for poverty eradication in the province.

The Commission has an opportunity to accelerate the process of change, to implicitly support a movement towards a fair and transparent way of setting social assistance rates so that people can meet their basic needs and lead healthy and dignified lives. Streamlining the now notorious 800 rules governing social assistance is long overdue. We would also urge the Commission to consider the crucial role played by housing costs in perpetuating poverty in Ontario. Kingston presents a classic case study in the housing affordability crisis. Census data from 2006 show that nearly half (48 per cent) of Kingston households spend over 30 per cent of their income on shelter. Equally shocking is that over one in five households (21.79 per cent) spend half or more of their income on shelter. We urge the Commission to recommend implementation of a full housing benefit to limit rental costs for single adults and families living on low incomes to 30 per cent of gross household incomes. Finally, we urge the Commission to develop a meaningful plan for the elimination of deep poverty aimed at ensuring that no one on social assistance is forced to try to live on an income of less than 80 per cent of the poverty line (LIM-AT).

We believe that these suggestions are feasible and realistic in a rich society such as our own. The Commissioners, experienced in government and public life, will be aware that government is about making choices. Ontario can choose to eliminate hunger, homelessness and hardship. Other affluent societies have achieved the virtual eradication of poverty. We can too.

Appendix

The above has been informed by, among other research, the Final Report to the WHO Commission on the Social Determinants of Health (CSDH), Employment Conditions and Health Inequalities (2007). The Employment Conditions Knowledge Network that produced the Report is co-chaired by faculty from the Social Equity and Health Section, Centre for Addiction and Mental Health (CAMH), University of Toronto. The following is from the summary of that report.

“Fair employment implies a just relation between employers and employees that requires that certain features be present: (1) freedom from coercion, which excludes all forms of forced-labour such as bonded labour, slave labour, or child labour, as well as work arrangements that are so unbalanced that workers are unable or afraid to assert their rights; (2) job security in terms of contracts and safe employment conditions; (3) fair income, that is, sufficient to guarantee an adequate livelihood relative to the needs of society; (4) job protection and the availability of social benefits including provisions that allow harmony between working life and family life, and retirement income; (5) respect and dignity at work, so that workers are not discriminated against because of their gender, ethnicity, race, or social class; (6) workplace participation, a dimension that allows workers to have their own representatives and negotiate their employment and working conditions collectively within a regulated framework; and (7) enrichment and lack of alienation, where work is not only a means of sustenance; rather, jobs should be as much
as possible an integral part of human existence that does not stifle the productive and creative capacities of human beings….

Key influences affecting changes to employment relations and conditions over the past thirty years have been the growing influence of powerful corporations and abandonment of Keynesian economic policy and social compacts in favour of neo-liberal ideology and policies, placing microeconomic rationality as the validating criterion for all aspects of social life and thereby universalises market dependence in society. In developed countries, the outcomes of these changes have been a reduced welfare net for the unemployed and disadvantaged; job losses; growth in job insecurity and precarious employment; a weakening (in practice) of regulatory protections and the historical emergence of an informal economy, including home-based work and child labour. The impact has been complicated by increased female workforce participation and an ageing population in these countries…

Given that politics are fundamental for health, as a cause of health inequalities but also as the only remedy to end with these inequalities, we have devoted considerable effort to provide not only a political analysis of employment relations and conditions, but also to provide some recommendations of what can be done to reduce inequalities in health related to employment. Our recommendations place considerable emphasis on social welfare (poverty alleviation, universal education and public health facilities, government inspectorates) and regulation of labour markets (international standards/agreements, laws and enforcement). Governments and their agencies are in a position to provide comprehensive standards and laws, and to enforce them. Welfare policies also set a framework for community expectations that influence other actions. Voluntary measures by employers/corporations have a role to play but are too fragmented and weak to reshape employment conditions and lift standards generally. Historically, it has been government action, often in response to community pressure, that has set social standards. The combination of union and community pressure plays a vital role in ensuring government action.” (emphasis added)

http://www.who.int/social_determinants/resources/articles/emconet_who_report.pdf

11 July, 2011