The Cost of Poverty
andyt @ Thu May 05, 2011 12:45 pm
If you need a selfish reason to worry about poverty - it costs you money.
http://www.oafb.ca/assets/pdfs/CostofPoverty.pdf
$1:
Poverty has a price tag for all Ontarians.
• Poverty has a signifi cant cost for or governments. governments. The federal and Ontario government are losing at least $10.4 billion to $13.1 billion a year due to poverty, a loss equal
to between 10.8 to 16.6 per cent of the provincial budget.
• Poverty has a cost for every household in Ontario. In real terms, poverty costs
every household in the province from $2,299 to $2,895 every year.
• Poverty has a very signifi cant total economic cost in Ontario. When both private
and public (or social) costs are combined, the total cost of poverty in Ontario is equal
to 5.5 to 6.6 per cent of Ontario’s Gross Domestic Product (GDP).
The cost of poverty is refl ected in remedial, intergenerational, and
opportunity costs.
• The remedial costs of poverty related to health care and crime are substantial.
In Ontario, poverty-induced costs related to health care have an annual public cost
of $2.9 billion. The national added cost to health care budgets is much greater, at
$7.6 billion per year. The poverty-induced costs related to crime in Ontario have a
relatively small annual public cost of $0.25 to $0.6 billion, split between federal and
provincial governments.
• The annual cost of child or intergenerational poverty is very high. If child poverty were eliminated, the extra income tax revenues nationally would be between $3.1
billion and $3.8 billion, while for Ontario, the additional (federal and provincial) taxes
would amount to $1.3 billion to $1.6 billion. The total economic cost (private and social) of child poverty Ontario is $4.6 to 5.9 billion annually.
• Opportunity costs or lost productivity due to poverty has a great economic cost.
Federal and provincial governments across Canada lose between $8.6 billion and $13
billion in income tax revenue to poverty every year; in the case of Ontario, Ottawa and
Queen’s Park lose a combined $4 billion to $6.1 billion.
• Poverty has a signifi cant cost for or governments. governments. The federal and Ontario government are losing at least $10.4 billion to $13.1 billion a year due to poverty, a loss equal
to between 10.8 to 16.6 per cent of the provincial budget.
• Poverty has a cost for every household in Ontario. In real terms, poverty costs
every household in the province from $2,299 to $2,895 every year.
• Poverty has a very signifi cant total economic cost in Ontario. When both private
and public (or social) costs are combined, the total cost of poverty in Ontario is equal
to 5.5 to 6.6 per cent of Ontario’s Gross Domestic Product (GDP).
The cost of poverty is refl ected in remedial, intergenerational, and
opportunity costs.
• The remedial costs of poverty related to health care and crime are substantial.
In Ontario, poverty-induced costs related to health care have an annual public cost
of $2.9 billion. The national added cost to health care budgets is much greater, at
$7.6 billion per year. The poverty-induced costs related to crime in Ontario have a
relatively small annual public cost of $0.25 to $0.6 billion, split between federal and
provincial governments.
• The annual cost of child or intergenerational poverty is very high. If child poverty were eliminated, the extra income tax revenues nationally would be between $3.1
billion and $3.8 billion, while for Ontario, the additional (federal and provincial) taxes
would amount to $1.3 billion to $1.6 billion. The total economic cost (private and social) of child poverty Ontario is $4.6 to 5.9 billion annually.
• Opportunity costs or lost productivity due to poverty has a great economic cost.
Federal and provincial governments across Canada lose between $8.6 billion and $13
billion in income tax revenue to poverty every year; in the case of Ontario, Ottawa and
Queen’s Park lose a combined $4 billion to $6.1 billion.
http://www.ncw.gc.ca/[email protected]?lid=77&fid=1#cost
$1:
How does poverty cost Canadians?
No one, to our knowledge, has attempted to put a global dollar figure on how much poverty costs. It is certainly beyond the Council's capacity to do so. There is ample evidence however, that poverty not only results in personal human misery, but it does not make good economic sense. The following is a sample selection of the ways in which poverty costs all of us and how wiser decisions would improve human well-being and produce real, long-term economic savings.
Health
The health field provides a key example of how reducing and preventing poverty in the first place is more cost-effective than paying for its consequences. Population health evidence points to the increased costs to the health care system, and the decreases in the academic achievements, health and life spans, of those populations at the bottom end of the socio-economic scale.
Spending on health care, however, has a relatively minor effect on the health of a population compared to the effects of unemployment, for example, or of income and social status. The determinants of the health of a population include social supports, working conditions, social environments, physical environments, biology and genetic endowment, gender, personal health practices and culture. Child development has a significant effect on lifelong health of individuals, and the overall health of populations. Health services are only a part of the picture - and an expensive part at that.
Again and again, population health researchers have shown the importance of income and social status. Even when people have all the basics such as adequate food and shelter, the higher their income and social status, the better people's health. A pioneering study in the field, the Whitehall Study, followed the health of more than 10,000 British civil servants for nearly 20 years. It showed that health and life expectancy improved at each level in the ranks of the civil service, even though all the people studied had adequate incomes, and all worked in "low risk" office jobs. Even when the study looked at "high risk" health behaviours such as smoking, researchers found that top people who smoked were much less likely to die of smoking-related causes.5
Population health experts demonstrate how stress is part of the explanation for these differences in health status. Living with prolonged stress hurts the biological systems of all animals - including people - and makes them susceptible to illness. For example, children who lived with some stress and were exposed to streptococcal infections were more likely to become ill than were children who were similarly exposed but had not had stressful experiences.6 When the Whitehall Study looked at the differences in coping with stress at each level within the hierarchy of the British civil service, it found that although all ranks in the study had similarly raised levels of stress when they were at work, the blood pressure of senior administrators dropped when they went home. For low-level workers it did not. Both animals and people who live in unsatisfactory, low-level social arrangements live in states of constant alert, never knowing when there will be another threat to their sense of well-being.7
These findings about stress help to explain some of the difficulties of parenting while coping with the pressures of high-stress, low-status, low-paying jobs, living as a single parent without a partner to share the burden, or living on welfare, in poor housing or in a run-down or dangerous neighbourhood. One result of these stresses is that the capacity of parents to provide the responsiveness and appropriate discipline essential for optimal child development is seriously compromised.
Health problems of poor children begin before birth and place these children at greater risk of death, disability and other health problems throughout infancy, childhood and adolescence. At birth, children from the poorest neighbourhoods in Canada have a life expectancy between 2 and 5 ½ years shorter than that of children from the wealthiest neighbourhoods. Children from the poorest neighbourhoods can also expect to spend more of their lives with disabilities and other health problems. The rate of childhood disability was over twice as high for children from poor families than for children from rich families.8
Findings from Canada's National Longitudinal Survey of Children and Youth found similar overwhelming evidence. Again and again, the Children's Survey found that children at the lower end of the socio-economic scale had poorer health and developmental outcomes than children in the middle, and children at the top of the socio-economic scale had even better results.
And parents at the lower end of the scale showed the effects of living in poverty. They suffered increased stress and poorer functioning with their children and higher levels of depression, both of which are bound to have serious effects on the capacity of parents to take the best care of their children. 9,10
Canada devotes a very large share of its wealth, effort and attention to trying to maintain or improve the health of the individuals that make up its population. These massive efforts are primarily channelled through the health care system, despite evidence that income, employment and social status would have a greater positive effect. As citizens and taxpayers, we are all bearing the costs.
Justice
Spending on justice and crime is another area where we are putting a great deal of money into very expensive services, where results are questionable, if not in some cases the opposite of what we are trying to achieve.
The National Council of Welfare's Justice and the Poor (2000) report shows in detail how there is much in our criminal justice system that pushes young people into crime instead of helping them to stay out of it - and it is largely related to poverty. Although Canada has a relatively lower rate of crime, especially violent crime, than other industrialized countries, we have one of the highest rates of imprisonment of young people in the world, twice that of the United States.
The report provides examples of research that indicates that people from all levels of society commit crimes and that there is a near-universal tendency of adolescents, especially young men, to commit minor offences. But those who are arrested, detained without bail, jailed and given the harshest sentences are people with low income. They do not have the family connections, education, steady employment and other labels of "respectability" or the ability to hire lawyers and pay fines that the more well-off have. For example, lone mothers have been jailed because they could not afford fines or because they were unable to fulfil a community service sentence due to lack of affordable child care.
Low-income offenders of minor crimes thus get locked up with experienced criminals who give them advanced lessons in crime. In addition, their experience erodes their respect for the law, which can lead to future problems. Jailing often means people lose jobs, housing, their children and support from family and friends who could have helped them through a temporary period of difficulty. To make matters worse, they often lose their future because they obtain a record that makes it very difficult to get what they have lost back again. This is an extraordinary amount of damage for a minor offence.
This situation is not helped by cutbacks to health, welfare and employment services that put more mentally ill people, homeless families and unemployed youth into the streets where people are afraid of them. Work and family stress also does not help, nor does lack of attention in schools to training in conflict resolution.
Our current approach is thus very expensive in terms of high-cost incarceration and damage to human beings. And as with health, it is not only the poor but the rich and middle class who pay the bill. Supervision programs cost less than keeping the accused in jail while awaiting trial, for example. And the most effective ways of reducing crime itself have nothing to do with the criminal justice system. They involve support programs for families in vulnerable circumstances and the creation of opportunities for young people.
No one, to our knowledge, has attempted to put a global dollar figure on how much poverty costs. It is certainly beyond the Council's capacity to do so. There is ample evidence however, that poverty not only results in personal human misery, but it does not make good economic sense. The following is a sample selection of the ways in which poverty costs all of us and how wiser decisions would improve human well-being and produce real, long-term economic savings.
Health
The health field provides a key example of how reducing and preventing poverty in the first place is more cost-effective than paying for its consequences. Population health evidence points to the increased costs to the health care system, and the decreases in the academic achievements, health and life spans, of those populations at the bottom end of the socio-economic scale.
Spending on health care, however, has a relatively minor effect on the health of a population compared to the effects of unemployment, for example, or of income and social status. The determinants of the health of a population include social supports, working conditions, social environments, physical environments, biology and genetic endowment, gender, personal health practices and culture. Child development has a significant effect on lifelong health of individuals, and the overall health of populations. Health services are only a part of the picture - and an expensive part at that.
Again and again, population health researchers have shown the importance of income and social status. Even when people have all the basics such as adequate food and shelter, the higher their income and social status, the better people's health. A pioneering study in the field, the Whitehall Study, followed the health of more than 10,000 British civil servants for nearly 20 years. It showed that health and life expectancy improved at each level in the ranks of the civil service, even though all the people studied had adequate incomes, and all worked in "low risk" office jobs. Even when the study looked at "high risk" health behaviours such as smoking, researchers found that top people who smoked were much less likely to die of smoking-related causes.5
Population health experts demonstrate how stress is part of the explanation for these differences in health status. Living with prolonged stress hurts the biological systems of all animals - including people - and makes them susceptible to illness. For example, children who lived with some stress and were exposed to streptococcal infections were more likely to become ill than were children who were similarly exposed but had not had stressful experiences.6 When the Whitehall Study looked at the differences in coping with stress at each level within the hierarchy of the British civil service, it found that although all ranks in the study had similarly raised levels of stress when they were at work, the blood pressure of senior administrators dropped when they went home. For low-level workers it did not. Both animals and people who live in unsatisfactory, low-level social arrangements live in states of constant alert, never knowing when there will be another threat to their sense of well-being.7
These findings about stress help to explain some of the difficulties of parenting while coping with the pressures of high-stress, low-status, low-paying jobs, living as a single parent without a partner to share the burden, or living on welfare, in poor housing or in a run-down or dangerous neighbourhood. One result of these stresses is that the capacity of parents to provide the responsiveness and appropriate discipline essential for optimal child development is seriously compromised.
Health problems of poor children begin before birth and place these children at greater risk of death, disability and other health problems throughout infancy, childhood and adolescence. At birth, children from the poorest neighbourhoods in Canada have a life expectancy between 2 and 5 ½ years shorter than that of children from the wealthiest neighbourhoods. Children from the poorest neighbourhoods can also expect to spend more of their lives with disabilities and other health problems. The rate of childhood disability was over twice as high for children from poor families than for children from rich families.8
Findings from Canada's National Longitudinal Survey of Children and Youth found similar overwhelming evidence. Again and again, the Children's Survey found that children at the lower end of the socio-economic scale had poorer health and developmental outcomes than children in the middle, and children at the top of the socio-economic scale had even better results.
And parents at the lower end of the scale showed the effects of living in poverty. They suffered increased stress and poorer functioning with their children and higher levels of depression, both of which are bound to have serious effects on the capacity of parents to take the best care of their children. 9,10
Canada devotes a very large share of its wealth, effort and attention to trying to maintain or improve the health of the individuals that make up its population. These massive efforts are primarily channelled through the health care system, despite evidence that income, employment and social status would have a greater positive effect. As citizens and taxpayers, we are all bearing the costs.
Justice
Spending on justice and crime is another area where we are putting a great deal of money into very expensive services, where results are questionable, if not in some cases the opposite of what we are trying to achieve.
The National Council of Welfare's Justice and the Poor (2000) report shows in detail how there is much in our criminal justice system that pushes young people into crime instead of helping them to stay out of it - and it is largely related to poverty. Although Canada has a relatively lower rate of crime, especially violent crime, than other industrialized countries, we have one of the highest rates of imprisonment of young people in the world, twice that of the United States.
The report provides examples of research that indicates that people from all levels of society commit crimes and that there is a near-universal tendency of adolescents, especially young men, to commit minor offences. But those who are arrested, detained without bail, jailed and given the harshest sentences are people with low income. They do not have the family connections, education, steady employment and other labels of "respectability" or the ability to hire lawyers and pay fines that the more well-off have. For example, lone mothers have been jailed because they could not afford fines or because they were unable to fulfil a community service sentence due to lack of affordable child care.
Low-income offenders of minor crimes thus get locked up with experienced criminals who give them advanced lessons in crime. In addition, their experience erodes their respect for the law, which can lead to future problems. Jailing often means people lose jobs, housing, their children and support from family and friends who could have helped them through a temporary period of difficulty. To make matters worse, they often lose their future because they obtain a record that makes it very difficult to get what they have lost back again. This is an extraordinary amount of damage for a minor offence.
This situation is not helped by cutbacks to health, welfare and employment services that put more mentally ill people, homeless families and unemployed youth into the streets where people are afraid of them. Work and family stress also does not help, nor does lack of attention in schools to training in conflict resolution.
Our current approach is thus very expensive in terms of high-cost incarceration and damage to human beings. And as with health, it is not only the poor but the rich and middle class who pay the bill. Supervision programs cost less than keeping the accused in jail while awaiting trial, for example. And the most effective ways of reducing crime itself have nothing to do with the criminal justice system. They involve support programs for families in vulnerable circumstances and the creation of opportunities for young people.
DrCaleb @ Thu May 05, 2011 1:33 pm
It still irks me that a family with two incomes and kids can be homeless.
Public_Domain @ Thu May 05, 2011 1:33 pm
andyt @ Thu May 05, 2011 1:35 pm
DrCaleb DrCaleb:
It still irks me that a family with two incomes and kids can be homeless.
Does that happen a lot? That seems a bit extreme, and I would guess temporary.
But nobody should be homeless, unless by choice.
DrCaleb @ Thu May 05, 2011 1:48 pm
andyt andyt:
DrCaleb DrCaleb:
It still irks me that a family with two incomes and kids can be homeless.
Does that happen a lot? That seems a bit extreme, and I would guess temporary.
But nobody should be homeless, unless by choice.
I quite agree, and yes it does. Especially here in Alberta. It's usually because they either can't afford housing, or that they can't find any. It is usually temporary, but even that is too long.
Choban @ Thu May 05, 2011 2:51 pm
$1:
Especially here in Alberta. It's usually because they either can't afford housing, or that they can't find any. It is usually temporary, but even that is too long.
Curious, any idea what those #'s are like now, I know during the boom here in calgary there were an estimated 10k working homeless, the majority of them claiming lack of affordable housing.
cougar @ Thu May 05, 2011 4:34 pm
I think me and my family are headed towards the street too. We cannot manage with two incomes and two kids and in 4 months one of the incomes will disappear. 
Poverty may have a cost to the government but, in the grand scheme of things, someone still profits from bringing the labor cost down and the prices up. The 10+ billion dollars will be spent by the poor guys and will end up in the pockets of landlords and grocery store executives.
OnTheIce @ Thu May 05, 2011 4:44 pm
cougar cougar:
I think me and my family are headed towards the street too. We cannot manage with two incomes and two kids and in 4 months one of the incomes will disappear.
Poverty may have a cost to the government but, in the grand scheme of things, someone still profits from bringing the labor cost down and the prices up. The 10+ billion dollars will be spent by the poor guys and will end up in the pockets of landlords and grocery store executives.
Poverty may have a cost to the government but, in the grand scheme of things, someone still profits from bringing the labor cost down and the prices up. The 10+ billion dollars will be spent by the poor guys and will end up in the pockets of landlords and grocery store executives.
How long have you been living on low income's and why is your other half losing their job?
How old are your children?
cougar @ Thu May 05, 2011 5:14 pm
I inadvertantly deleted my previous post..
My kids are ages 5 and 9. It is me who is going to lose his income in 4 months if a mirracle does not happen.
We do not qualify for any subsidised housing programs since my son is still covered by a sponsorship agreement. I asked the governemt to pro-rate the subsidy e.g. provide 75% of the complete amount as 3 out of 4 family members are eligible. They said, "No!" id does not work that way....so I guess they meant we were supposed to live on the street.
Gunnair @ Thu May 05, 2011 6:35 pm
cougar cougar:
I inadvertantly deleted my previous post..
My kids are ages 5 and 9. It is me who is going to lose his income in 4 months if a mirracle does not happen.
We do not qualify for any subsidised housing programs since my son is still covered by a sponsorship agreement. I asked the governemt to pro-rate the subsidy e.g. provide 75% of the complete amount as 3 out of 4 family members are eligible. They said, "No!" id does not work that way....so I guess they meant we were supposed to live on the street.
My kids are ages 5 and 9. It is me who is going to lose his income in 4 months if a mirracle does not happen.
We do not qualify for any subsidised housing programs since my son is still covered by a sponsorship agreement. I asked the governemt to pro-rate the subsidy e.g. provide 75% of the complete amount as 3 out of 4 family members are eligible. They said, "No!" id does not work that way....so I guess they meant we were supposed to live on the street.
I must have missed that part that said government was supposed to pay for housing. Don't I feel the fool for paying a mortgage these last many years.
cougar @ Thu May 05, 2011 7:06 pm
Gunnair Gunnair:
I must have missed that part that said government was supposed to pay for housing. Don't I feel the fool for paying a mortgage these last many years.
Ideally, one should not be relying on any affordable housing programs or subsidies.
If you have two incomes in the family, this should be enough to cover basic expenses you should be able to save some money for the times you may be out of work.
But for us it is not working. We are losing money even when we both work. Even when we do not go anywhere and do not do anything fancy.
So, in my opinion (which may be incorrect), the government is depressing the wages through inundating the job market with fresh labor force and is then using some of the money collected through taxes to help those that were pushed to the brink of extinction. Unfortunately, by doing that and applying more and more pressure, there are too many families that end up on the bottom. Only very few profit in this game.
Gunnair @ Thu May 05, 2011 7:36 pm
"cougar" wrote:
Gunnair Gunnair:
I must have missed that part that said government was supposed to pay for housing. Don't I feel the fool for paying a mortgage these last many years.
$1:
Ideally, one should not be relying on any affordable housing programs or subsidies. If you have two incomes in the family, this should be enough to cover basic expenses you should be able to save some money for the times you may be out of work.
So far so good.
$1:
But for us it is not working. We are losing money even when we both work. Even when we do not go anywhere and do not do anything fancy.
Sorry, I find it hard to believe with the tiny bit of info you've allowed.
$1:
So, in my opinion (which may be incorrect), the government is depressing the wages through inundating the job market with fresh labor force and is then using some of the money collected through taxes to help those that were pushed to the brink of extinction. Unfortunately, by doing that and applying more and more pressure, there are too many families that end up on the bottom. Only very few profit in this game.
This sounds suspiciously like an anti-immigration stance.
Funny, I see a lot of street punks hanging around looking for handouts so they can feed their pet dogs, get another piercing or another tattoo. At the same time, the 70 year old Sikh janitor at work (the guy is an ex Indian Army Artillery NCO) has no problem cleaning our toilets and emptying our garbage.
You want immigrants to have a hard time, then send out those spoiled youth and unemployed older people to drive cabs, scrub toilets, and pick up cigarette butts in the parking lot.
That'll teach those pesky immigrant to stay home.
ShepherdsDog @ Thu May 05, 2011 7:44 pm
choices. I once had a choice between living In Vancouver and Winnipeg, job offers in both cities. Because I chose the cheaper of the two places I was able to pay for two homes and land rather than just putting a down payment on one. I chose to go go into the military before I enrolled in university, as a result no student loans. I also cose to go overseas to a really dirty, and dangerous place every year for four years to offset education costs. I've changed professions three times..well twice really(seeing as I went from educator to engineer back to educator) and this allowed me to work and earn my graduate degree(last year) while overseas(and yes it is a school in the top third of THE and QS rankings....not prestigious, but not Mickey Mouse either).
My wife and I didn't rely on anybody but each other. We relied on hard work(she earned scholarships) and hard choices to get where we are.
rickc @ Thu May 05, 2011 7:46 pm
Gunnair Gunnair:
"cougar" wrote:
So far so good.
Sorry, I find it hard to believe with the tiny bit of info you've allowed.
This sounds suspiciously like an anti-immigration stance.
Funny, I see a lot of street punks hanging around looking for handouts so they can feed their pet dogs, get another piercing or another tattoo. At the same time, the 70 year old Sikh janitor at work (the guy is an ex Indian Army Artillery NCO) has no problem cleaning our toilets and emptying our garbage.
You want immigrants to have a hard time, then send out those spoiled youth and unemployed older people to drive cabs, scrub toilets, and pick up cigarette butts in the parking lot.
That'll teach those pesky immigrant to stay home.
Gunnair Gunnair:
I must have missed that part that said government was supposed to pay for housing. Don't I feel the fool for paying a mortgage these last many years.
$1:
Ideally, one should not be relying on any affordable housing programs or subsidies. If you have two incomes in the family, this should be enough to cover basic expenses you should be able to save some money for the times you may be out of work.
So far so good.
$1:
But for us it is not working. We are losing money even when we both work. Even when we do not go anywhere and do not do anything fancy.
Sorry, I find it hard to believe with the tiny bit of info you've allowed.
$1:
So, in my opinion (which may be incorrect), the government is depressing the wages through inundating the job market with fresh labor force and is then using some of the money collected through taxes to help those that were pushed to the brink of extinction. Unfortunately, by doing that and applying more and more pressure, there are too many families that end up on the bottom. Only very few profit in this game.
This sounds suspiciously like an anti-immigration stance.
Funny, I see a lot of street punks hanging around looking for handouts so they can feed their pet dogs, get another piercing or another tattoo. At the same time, the 70 year old Sikh janitor at work (the guy is an ex Indian Army Artillery NCO) has no problem cleaning our toilets and emptying our garbage.
You want immigrants to have a hard time, then send out those spoiled youth and unemployed older people to drive cabs, scrub toilets, and pick up cigarette butts in the parking lot.
That'll teach those pesky immigrant to stay home.
I think you missed his earlier deleted post were he states that he is an immigrant from Europe himself. So I am kind of scratching my head over his last post as well.
![[huh]](./images/smilies/icon_scratch.gif "huh?"){kind=icon}
andyt @ Thu May 05, 2011 11:45 pm
cougar cougar:
So, in my opinion (which may be incorrect), the government is depressing the wages through inundating the job market with fresh labor force and is then using some of the money collected through taxes to help those that were pushed to the brink of extinction. Unfortunately, by doing that and applying more and more pressure, there are too many families that end up on the bottom. Only very few profit in this game.
Yes they are. Does it make sense to bring in masses of people when we have high unemployment? What do they think will happen?
But you're wrong about the govt collecting taxes. A conservative estimate is that immigrants cost the govt 18 billion more than they pay in taxes. It's the same deal as the cost of poverty, immigrants have much lower than average incomes, so pay little in taxes but use govt services just the same.
Good luck with your house hunting. If both of you don't earn sufficient to find housing, just go on welfare. With two kids you get a decent amount, and don't have childcare and other costs to pay, so may actually be further ahead.
For those commenting that cougar is an immigrant, I've heard expressed what s/he's saying a number of times by immigrants. They come here and then feel ripped off when they realize the opportunities promised them are just not there, yet the govt continues to bring in a huge whack of new ones every year. Many immigrants themselves say immigration should be reduced and the govt should do a better job of matching immigrants to jobs.