The costs of poverty

As already noted by April Reign, the Star has started a series on poverty. And while the far more important damage done by poverty is in human terms, even the economic costs alone should be enough to justify far more attention than the problem currently receives:

(NDP MP Peggy) Nash also regards poverty as an economic crisis, not only a social one – a crisis of lost opportunity for a nation failing to make the best use of its existing and potential workforce.

"In the short term, a boost in the minimum wage is a stimulus for the entire economy, because poor people spend what little they have right away on food and clothing and books for their kids that they've been postponing in order to pay the rent," Nash says. By contrast, affluent recipients of windfalls tend to park them in the bank or a mutual fund.

And in the longer run, "the working poor are better able – with modestly higher incomes, decent shelter and affordable child care – to upgrade their job skills and obtain certification for better-paying work.

They become more social, they become more engaged citizens, and of course they start paying substantial taxes."

(OCAP organizer John) Clarke marvels that politicians with a laggard approach to poverty reform ignore the evidence that "poverty is simply not cost-efficient for the economy. Working people denied a decent living wage put extraordinary demands on the system.

"They turn to emergency wards because they can't afford preventive care. They help raise the costs of incarceration among poorly supervised kids whose parents are collectively working three or four jobs.

And they are a tax drain on the treasury in welfare payments to folks who could be paying taxes if they were provided some help in climbing out of poverty."

Of course, none of this should come as particularly new information. And the same knowledge hasn't been enough to spur substantial reductions in Canada's poverty rate over the past couple of decades.

But while far too many Canadians have been left to deal with the effects of poverty in the recent past despite the lack of any plausible excuse for inaction, it's not too late to start making sure that future generations won't be pushed into more of the same. And a real investment in reducing poverty now could pay off many times over in the future - both for the people who benefit directly, and for Canadian society at large.