B.C. has largest share of working poor
Vancouver Sun
September 5, 2006
By: Chad Skelton

EXCERPT

More than 72,000 workers -- almost one in 10 -- live in poverty in Greater Vancouver, leaving the Lower Mainland with the greatest incidence of working poor of any major city in Canada, according to a federal government study.

The same study, based on data already five years old, found B.C. had the largest share of working poor of any region in the country, at nearly twice the national rate.

The report, published in August by Human Resources and Social Development Canada, estimates that 72,500 people in Greater Vancouver are working poor -- defined as those who work at least 910 hours a year but have a family income below the poverty line.

That works out to 9.6 per cent of all workers -- well ahead of second-place Toronto at 5.3 per cent.

Similarly, the working poor make up 10.2 per cent of the total workforce in B.C. -- nearly twice the national rate of 5.6 per cent.

The definition of poverty used by the report is the Market Basket Measure, which is an estimate of the cost of a number of basic goods -- such as shelter, food and clothing -- in each major city in the country.

Vancouver has the second-highest MBM in the country, after Toronto, largely due to its high cost of housing.

Under the MBM, a family of four in Vancouver is considered poor if its combined after-tax income is lower than $28,567.

In contrast, the same figure for Montreal, where rent is relatively cheap, is $23,381 -- nearly $5,000 less.

"There is this prevailing sense that, if you are working, you should not be poor," said Francois Weldon, head of the HRSDC's Social Policy Research Group, which published the report. "The reality is there are a number of people who have a significant attachment to the labour force . . . and find themselves in poverty nonetheless."

"It is pretty troubling," said Jonathan Kesselman, an economist at Simon Fraser University.

"It's kind of an affront to our notion that people can do OK, or even well, simply by working hard."

The report, based on 2001 data, does not address why Vancouver has such high rates of working poor, but Weldon said one of the reasons is the city's high cost of living.

Kevin Milligan, an economist at the University of B.C., said the figures suggest someone who might be able to scrape out a decent lifestyle in Montreal would struggle in pricey Vancouver.

"They're doing what they're supposed to do -- going out and getting a job -- but they're still having problems," he said.

In addition to regional comparisons, the government's study also reveals some surprising facts about the working poor -- including how little one's paycheque has to do with it.

Until recently, said Weldon, low-paid workers -- those who make only $10 an hour or less -- and the working poor were believed to be basically one and the same thing.

But the HRSDC study found that the vast majority of low-paid workers -- 88 per cent -- are not working poor.

That's because, whether you are poor or not, depends on your entire family's income -- and most low-paid workers are not the main breadwinner.

For example, a 25-year-old McDonald's employee may only make minimum wage -- but if he lives at home with his middle-class parents, he's not poor.

Similarly, most working poor are paid well above minimum wage -- the average is $12 an hour.

But many are supporting an entire family on that one salary -- either because they are single parents or their spouse doesn't work.

SOME OF THE REPORT'S OTHER FINDINGS INCLUDE:

- The working poor work just as hard as the rest of us. The study found the average worker in poverty put in 2,090 hours of work a year -- slightly higher than the 2,050 logged by the average worker above the poverty line.

- While some of the working poor are able to use their job experience to eventually move on to better-paying work, it can be a tough slog. During the six-year period covered by the study, a worker in poverty spent an average of three years in that condition.

- A lot of poor people work. Of all those living below the poverty line in Canada, about 40 per cent work at least 910 hours a year. In Greater Vancouver, the figure is 43 per cent.

Experts say it's not clear how best to help the working poor.

The study says increasing the minimum wage would havelittle effect, because most of the working poor already make well above that amount. Both the U.S. and Great Britain have introduced special tax credits for the working poor.

And Weldon said the Conservative government has vowed to work with the provinces to develop a similar program here.

But Kesselman said such programs can be costly, while adding only a few thousand dollars to each family's income.

He said a better approach may be to make it easier for the working poor to access job training programs that can help them land a better-paying job.

WORSE IN THE WEST

% of all workers in poverty (2001)

• Vancouver 9.6%
• Toronto 5.3%
• Calgary 5.2%
• Ottawa 3.7%
• Montreal 3.4%
• Winnipeg 3.2%