Poverty in Canada (2nd Edition)

For Julie.

CHRISTOPHER SARLO'S THOROUGH AND EXHAUSTIVE study of poverty in Canada presents statistics on consumption expenditures for numerous budget items including food, shelter, transportation, and other necessities; profiles the poor in Canada in 1988 by family characteristics including age, education, employment, and gender; and classifies welfare recipients by income and different family types.

These detailed data are preceded by a discussion of the change in the meaning and measurement of poverty over the years. We used to think of people as poor if their income was not sufficient to enable them to purchase basic necessities. As Mr. Sarlo points out, however, there is an increasing tendency to shift from such an absolute standard to a relative standard. People are now characterized as poor if their income is low relative to some average income or some average consumption.

President Johnson proclaimed a War on Poverty in 1964. This made poverty in the United States a major public issue. The study of poverty became a growth industry within both government agencies and the academy. As one of the early participants in this industry, I wrote in 1965: "Periodic examinations of the state of health are as desirable for a society as for an individual. Such examinations are best made when the society is healthy rather than when it is sick. It should then be possible to examine the condition of society unemotionally and in historical perspective—not to see whether the state of health is perfect, but rather to see how it compares with the condition in preceding examinations, whether it has improved or deteriorated and to what extent." Rose Friedman, Poverty—Definition and Perspective, (Washington, D.C.: American Enterprise Institute, 1965), p. 2.Note Such examinations can be useful only if there is a stable measure of the "basic needs" of families of different size.I attempted to provide such a measure for the United States, suggesting, as the most useful criterion, the income level at which consumers in fact purchase a nutritionally adequate diet. Even this criterion is very far from being unambiguous and precise because it is not possible to specify definitively what constitutes nutritional adequacy, as demonstrated by the frequent changes since 1965 in the detailed specifications of the calories, nutrients, vitamins and the like required for an adequate diet.

By any such absolute standard, poverty has declined greatly in most advanced societies in recent decades as all classes have shared in the increase in standards of living. As Mr. Sarlo points out, "It is most certain that less than 2 percent of Canada's population lives in poverty" i.e., having incomes too low to afford all the basic requirements of living. However, as we have become more affluent, our goals for the disadvantaged among us have understandably become more ambitious. One result has been to view poverty increasingly in "relative" rather than absolute terms. While commendable, such a shift may empty the concept of "progress" of content. If the poverty level is defined, for example, as an income exceeded by three quarters of the units, then one-quarter of the population will by definition be labelled as "poor" and progress in reducing poverty by definition, impossible.

As Mr. Sarlo points out, "There is no problem with developing . . . levels that you would like every citizen to attain as a minimum. However, to 'sell' these . . . as poverty lines is simply inappropriate."

Rose D. Friedman
Hoover Institution,

April 6, 1992