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PSYC 3630 (13)
Erin Ross (13)
Lecture 7

Lecture 7 - What is Poverty?

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PSYC 3630
Erin Ross

Lecture 7 1 February 28th, 2012 1. What is poverty? - Poor = word statistics Canada won’t use Low income cut-off (LICO) - 1/3 broad group of measures of low income - Income level below which a family would devote 20% more of their income on food, clothing, shelter than average family would - A bigger chunk of your income is spent on the basics than the average - LICO varies as a function of family size, and community size, and whether income is calculated before/after tax Low income measure (LIM) - Half of the median family income, adjusted to the family size/community size - Not used a lot in Canada, but it is used internationally Market-Basket Measure MBM - MBM = measure of disposable income that a family is able to/would need purchase a basket of goods of needs - Ex: food, clothing, shelter, transportation… etc. - Varies by family size, family composition (1 vs 2 earners), community size, community location Who is poor? - 2009: LICO after tax – 9.6% of population in Canada fell below (3.2 million people) - 2009: LICO before tax – ~12.5% of population in Canada - 2009: MBM – 10.6% - 2009: LIM after tax – 13.3% - Issue of what constitutes income? (gross wages/salary, net income from self-employment, investment income, transfer from government) Unattached individual - Person who lives not with a family; - Living alone or in a context where you live with someone whom you are not related to Figure 1 - Over past 20 years: % of Canada below LICO rose in mid-90s (recession and immediate post-recession) - 1996: decline (better economic times, more jobs) - 2008-2009: economic meltdown (global recession) – 3.16 million people living in low income (poverty) Figure 2 - LIM children poverty = 15% - LICO before tax children poverty = 14% - LICO after tax children poverty = 9.5% Figure 3 - Elderly = +65 - Biggest change in poverty is among the elderly - 1980: poverty rate for elderly: 33.8%; 1990: 10%; 2000: 6.9% Lecture 7 2 February 28th, 2012 - Dramatic decline in past 30 years - Guaranteed Income Supplement for Low-Income Seniors - Development of in Canada/Quebec Pension Plan - 1966: Government put in CPP (Quebec Pension Plan) - If income is not at a particular level, government will transfer you money to a income guaranteed minimum Figure 4 - Red = unattached individual poverty o Much higher than family poverty (2-4x higher) - Blue = family poverty (2 people+) nd o Often have 2 earners that bring in income (who participate in paid labour force) Figure 5 - Middle line (blue) = married couples with at least 1 child presence (1 earner) o Poverty rate is above 2 earners, but below the unattached individual - Bottom line (yellow) = married, 2 parents, at least 1 child (2 earners) o Bring down 2-4% than 1 earner in family - Top line (red) = unattached individual Figure 6 - Family type makes a difference in poverty rate - Red line = female lone families o Have low income rates o Shows decline over time - Blue line = male lone families - Green line = 2 parent family
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