MYTHS. The Truth about Poverty in Abbotsford

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1 The Truth about Poverty in Abbotsford MYTHS Abbotsford has experienced tremendous growth in recent years. The population expanded by 7.2% between 2001 and 2006, higher than the provincial average. During the same period, median incomes in Abbotsford increased by $6,623, although income still remains below the BC average. Unemployment currently sits at about 5.5%, lower than both the provincial and national rates. Figures like these can easily mask the ongoing problem of poverty in Abbotsford. Despite recent growth, many people continue to struggle to make ends meet. The increase in low paying (often part time) service sector jobs, and the rising cost of living for fuel, food, and housing are acute concerns. This booklet explores common myths about the standard of living in Abbotsford. What follows is a brief overview intended to shed some light on the poverty in our midst.

2 Defining Poverty According to Statistics Canada s Low Income Cut-Off (LICO) definition of poverty, a household is poor if it spends at least 20% more than the average Canadian household on basic needs such as food, clothing, and shelter. The average expenditure on these basic necessities is estimated to be 43% of after tax income. By these standards, a family is poor if it spends 63% of household income on basic needs. In 2006, approximately 545,000 people in BC were classified as living in poverty. POVERTY Each of us, without exception, has a deep longing to give, to contribute, to offer and to share what is meaningful to us. Such contributions are the backbone of our communities. They contribute to the common good, allow us to fulfill our obligations to our fellow citizens and give us a sense of self worth. Most of all, contributions foster civic belonging they make us feel at home. -- Measuring Up: Communities of Accessibility and Inclusion 2

3 MYTH #1 People living in poverty do not have jobs. In 2001, there were 653,300 working poor people in Canada. Including dependants, 1.5 million Canadians were affected by working poverty, of which about one third were children. These 1.5 million individuals accounted for about 40% of all low income Canadians in In a recent report, 13.1% of food bank clients in Canada listed their primary source of income as wages, or employment income. For a single parent with one child, the parent would have to work full time, and earn between $10.64 and $12.44 hourly (depending on city size) in order to be above the poverty line. Even for a single person working full-time, the hourly wage would have to be between $8.55 and $9.90 (again depending on city size). Given BC s minimum wage of $8 an hour, anyone supporting themselves or a family on minimum wage is under the poverty line. In a recent study of the homeless in the Fraser Valley, almost half of the respondents (48.6%) claim that the reason for their homelessness relates to the issue of affordability / inadequate income. Many of these homeless people represent extreme examples of the working poor. 3

4 A growth economy means that Abbotsford s population is wealthy. MYTH # 2 Although Abbotsford is one of the fastest growing municipalities in Canada (7.2% between 2001 and 2006), too many are being left behind. Abbotsfordians have an average individual income of $31,733 (2006): the widening gap between rich and poor is demonstrated through the fact that the income share of the bottom half (or poorest) of households is 24% (i.e. 24% of Abbotsford s household income accrues to households earning less than the median income). The incidence of low income families is nearly 11%, with 1.6% of the population on Income Assistance. Average household incomes in Abbotsford range from $63,321 for a married household to $32,138 for the average female-led single parent household. Single parent families headed by men earned $36,296. Single parents, especially the 4,015 female-led families, are among the most disadvantaged groups in Abbotsford. While BC s unemployment rate in October 2008 was below the national levels, the large service sector employment levels suggest that many people are working for low wages, or in part-time, seasonal, or limited term contract positions that are not sufficient for secure living conditions. The median income for a full-time, full year worker in Abbotsford was $39,790 but a person working full-time at minimum wage earns less than $17,000 annually. Between June 2007 and June 2008, average hourly wages increased by 4.4% while the Consumer Price Index (inflation) increased by 2.2%. Most recently, however, the rapid rise in gasoline prices and the carry-over effect for nearly all other products has raised the inflation rate to 3.1%, significantly cutting into any wage increases. In 2008 over half of BC s children that are living in poverty came from families where someone worked the equivalent of a full time, full year job. Despite this, BC has had the highest child poverty rate in Canada for the last five years (21.9%). Average incomes for families living in poverty were more than $11,000 below the poverty line. 4

5 MYTH # 3 Full time workers earn enough to support themselves and their families. Canada Mortgage and Housing Corporation recommends that households spend no more than 30% of their income on housing. With the average rent in Abbotsford at $767, a household income of $30,680 is required. This situation puts renters at very high risk for homelessness. Finding rent-geared-toincome housing is extremely difficult. The increased demand and rise in rental prices means that it is becoming increasingly difficult for low-income people to secure housing. A recent study concluded that a In Abbotsford, a worker must make a minimum of $8.65/hour to afford a bachelor apartment. A one bedroom requires $10.77/hour; a two bedroom requires $13.54/hour; and a three bedroom requires $15.19/hour. As the minimum wage is $8.00/hour, this means that it requires 1.1 workers to pay for a bachelor suite, 1.3 workers to pay for a onebedroom, 1.7 workers to pay for a two-bedroom, and 1.9 workers to pay for a three bedroom. 5

6 M MYTH # 4 Self-employed people are wealthy professionals. Self-employed people are at a greater risk of working for low wages than salaried workers. On average, self-employed people are as poor as the non-working poor. Self-employed Canadians worked an average of 650 hours more in a year but reported half the salary of full-time salaried employees. In addition, self-employed people do not receive other pay supplements such as benefits and paid vacation time. In 2001, more than 40% of working poor Canadians were selfemployed, and the incidence of poverty was four times higher among the self-employed than among salaried workers. Self-employed workers tend to be more vulnerable because their activities fall outside of many labour laws, such as the payment of minimum wages and benefits. They also assume other work relatedrisks on their own account. If they are dependent on one employer, and the employers treat them as private contractors, as for example pizza drivers and newspaper carriers, then the workers have almost no rights such as the provision of benefits, the maintenance of working conditions, or the provision of any forms of job rights. In Abbotsford 13% of the labour force, or 8,535 people, were selfemployed in

7 Poverty is only an issue for the poor. More families are falling behind compared to a generation ago. The rewards of a booming economy are enjoyed by a minority of families. In part, this is due to the fact that high-paying jobs in the knowledge sector require advanced education and training which many workers do not have. MYTH # 5 On every measure of academic attainment, Abbotsford falls behind the provincial average. Fewer Abbotsford residents complete high school, get a grade nine education, or go to university. In 2001, only 11.4% of Abbotsford s population had a university degree, compared to 17.6% in BC. Over 17% of Abbotsford s population aged have not completed high school, while 9.8% of the population has less than a grade nine education. The main reason for this is an inability to cope with the requirements of school life which may be caused by the challenges (many related to finances) that the student has at home. Youth who do not complete their high school education are more likely to end up in low paying jobs and to experience repeated spells of unemployment. This places a direct financial burden, in the form of taxation, on the rest of society in order to provide social services. Low incomes also affect all forms of businesses by reducing the levels and types of goods and services that they can sell. This in turn reduces employment opportunities. Reducing the number of people living in poverty becomes an issue for everyone. 7

8 MYTH # 6 When the economy is strong, the situation will improve. It is often believed that a strong economy will solve the problem of poverty. Yet, since the mid-1990s BC s, and indeed much of Canada s, economy has boomed. Only recently have conditions begun to slacken. On the surface, these relatively low unemployment figures suggest that the rising tide has lifted all boats, large and small. Yet over the last quarter century, the income of working people has not kept up with economic growth. During this period, for example, the top 1% of Canadian earners enjoyed a 113% increase in their annual incomes; by contrast, the average worker earned an increase of just 7%. Still, figures alone fail to describe the full scope of the problem. Temporary work and other forms of unstable employment, some of which are carried out beyond the reach of existing labour laws, means that while people are working, they remain highly susceptible to exploitation and unfair labour practices that hinder their ability to earn a living wage. What is more, poverty often remains persistent over time. To improve income levels often requires obtaining education or trade skills which take time and money to acquire and which many adults find difficult to access. These barriers represent acute problems for young people just entering the labour force, for new immigrants, and for visible minorities. Children are also susceptible to underlying cycles of poverty. Experts argue that family economic security prior to age six and access to quality child-care are closely related to a child s level of developmental readiness for school. After years of struggling to make ends meet, many seniors continue to work after they reach the age of retirement. Most working seniors prefer to take part-time jobs, although 23% report that full-time employment is not available. We continue to see citizens struggling to meet their basic daily needs: families at the food bank, children going to school without a nutritious breakfast, and mothers sacrificing their own needs to ensure that their sons and daughters have the basic supplies that the education system requires. Parents and individuals alike, seeking support and inclusion, are lined up for social assistance, hoping to pay off the most urgent needs (food, clothing, and perhaps medication if there are funds to spare). These issues cannot be remedied by stop-gap solutions. These problems persist regardless of the strength of the economy. 8

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10 MYTH # 7 Nothing can be done to reduce poverty in Abbotsford. In Abbotsford, we have a need to reduce poverty. We have a culture of achievement and success. We have a tradition of commitment. We have organizations and people with the power to influence political will and implement change. We have abundant resources to fuel community action. Vibrant Abbotsford is a local poverty reduction initiative that consists of a collaborative group made up of community-based organizations, Abbotsford residents, local businesses, and government. The group is committed to working towards the tangible reduction of local poverty in Abbotsford, and setting an example for other communities. Vibrant Abbotsford believes that a group of people with diverse experiences and shared values working towards the same goal can lead to real results, faster. The smallest act of kindness is worth more than the grandest intention ~ Oscar Wilde 10

11 Here s what you can do: Donate to the United Way of the Fraser Valley, specifying Vibrant Abbotsford as the recipient of your gift, which will support long-term community-based initiatives to reduce poverty in Abbotsford. Call In-kind donations of time and talent are also more than welcomed. Volunteer in your community. Whether you offer to help your neighbour, or get involved with Vibrant Abbotsford poverty reduction initiatives, you can make a tangible difference in Abbotsford. Vibrant Abbotsford at vibrantabbotsford@gmail.com for further information or to register for an upcoming Vibrant Abbotsford public update session. Learn about current projects and initiatives for reducing poverty in Abbotsford so that you can get directly involved. Use your voice. You have the power to educate others about the realities and complexities of reducing poverty in Abbotsford. Take opportunities to speak out and help raise awareness about the issue. Host a coffee party and include a discussion about the realities of poverty in Abbotsford, using this brochure as a jumping off point. Direct guests interested in becoming part of the solution to contact Vibrant Abbotsford. Offer job / literacy training or employment to people who are unemployed, or encourage your employer to do so. Consider how you treat people. Think about the underlying conditions that make people vulnerable to economic distress. Remember that there are many different groups of Abbotsford residents living in poverty. Offer assistance or a kind word to your neighbours, the young mother with a child on public transit, or the office cleaning staff who might be struggling to make ends meet. Learn more about poverty in Abbotsford at: VibrantAbbotsford.htm. Tell us how poverty affects you at We can all play a part in making Abbotsford an abundant community for everyone. When we break the cycles and explode the myths of poverty, all Abbotsford residents will enjoy the opportunity to reach their full potential. 11

12 Our Partners The J.W. McConnell Family Foundation