Archived - Full-time Workers Still in Poverty

Release of "Income for Living?"

Many Canadians in full-time jobs did not make it to the poverty line in 2000, said the National Council of Welfare in a report released today.

Full-time, full-year jobs at minimum wages left workers in poverty. The National Council of Welfare found take-home incomes were consistently below the most commonly-used poverty line, the Low Income Cut-offs or LICOs from Statistics Canada. But the situation looked just as bad using the new Market Basket Measure (MBM) of poverty - even though this new poverty line sets the bar a little lower. There were a few exceptions to the rule, mostly in Quebec where minimum-wage workers made it over the MBM line.

The MBM was developed by a committee of federal, provincial and territorial government officials and released in May 2003 after years of complaints about the Low Income Cut-offs. The MBM created a detailed list of the basic items a family of four would need. The list includes estimates based on the costs of needs such as children's running shoes and the peanut butter in a family's weekly grocery bag. The MBM is specific and austere. Its poverty lines are generally slightly lower than the LICOs.

People on welfare were invariably far below the poverty lines, both the LICOs and the new MBM. Single employable people on welfare in Alberta lived on just one third of the LICO and less than half the MBM.

In almost every case, a person with a full-time, full-year job at minimum wage could not live above LICO poverty lines. Things looked better through the lens of the MBM poverty line. In Quebec, all minimum-wage workers were over the MBM poverty line.

Low-wage workers making ten dollars an hour fared a little better. They were over both the poverty lines, but still in fragile situations. Any change in their situations, from a brief illness to the car breaking down, could throw the family into crisis.

Workers with average wages were consistently able to support their families well over both the LICO and the MBM poverty lines. When all the adults in the family had full-time work, families could cover all the necessities and put a little aside.

The Council produces estimates of welfare incomes in Canada every year, but this is the first time it has also calculated the take-home incomes of workers with full-time work at minimum wages, low wages and average wages.

"The Council has watched all levels of government push people on welfare into the workforce," said the Council's chairperson, John Murphy of Canning, Nova Scotia.

"After all this talk about creating incentives to work, it is shocking to see that full-time workers are still forced to live in poverty."

The new Market Basket Measure of poverty has data only for 2000, so no trend data is available. The Council endorsed the additional perspective of the MBM in this study, but plans to look at further years of MBM data before deciding whether to use the measure in other work.

"While the LICO tells us that people on welfare are in straitened circumstances with a very small share of the wealth in their communities, the MBM is more concrete. When we worked with the LICO poverty lines alone, we knew that everyone on welfare was very poor. Now that we have the MBM, the question is more pointed: What item do poor people have to give up to survive on welfare? Will it be the bus pass that allows an adult to look for work and go to school, good quality food to maintain a family's health or adequate accommodation?"

The study also compared the costs of average-priced apartments to the take-home income of welfare recipients and of full-time workers and their families. The Council used 30 percent of take-home income as the marker of affordability. Average rents were universally out of the reach of welfare recipients and their families. In Toronto and Calgary, a one-bedroom apartment cost 146 percent of the entire welfare income of a single person. But average accommodation was also out of reach for full-time workers with minimum wage jobs - except in Montreal. In Toronto and Vancouver, average housing was unaffordable for everyone with full-time work at ten dollars an hour, and even for some workers with average-wage work.

Child care was similarly exorbitantly expensive for workers. In Ontario, Alberta and British Columbia, a space in an average-priced centre cost about 40 percent of a single parent's take-home income from a minimum-wage job, about a third of the take-home income of a low-wage job, and about a quarter of the take-home income of an average job. The situation was far better in Quebec where the government provided a system of child care at five dollars a day. Workers there paid five or six percent of their take-home pay for child care.

The National Council of Welfare is a citizens' advisory group to the Minister of Social Development Canada.

 

Volume # 1

Released Date 2004-05-03

Related Materials

• Income for Living?
• Income for Living? Executive Summary