[Hpn] Interesting National Post Article on Welfare Shelter Rates.

Ian Tay Landry tay@hfx.eastlink.ca
Mon, 10 Sep 2001 22:17:34 -0400


                          September 7, 2001

                          Welfare, made to measure

                          National Post

                          The Alberta government has announced it will
tie the size of welfare payments people receive
                          to the cost of living in the region where they
live. Recipients in boomtowns such as Calgary and
                          Fort McMurray, where rent is expensive, will
see their welfare payments increase. Recipients
                          who live in slow-growth rural hamlets will
not.

                          This approach is fraught with potential
problems, not the least of which is the opportunity it
                          offers social workers and welfare advocates to
obscure their perennial demands for more
                          benefits under a cloud of complex formulae.
But in principle, it is a sensible move. Welfare is a
                          humane instrument designed to keep people from
starving and becoming homeless. Since the
                          cost of providing food and shelter varies from
place to place, it makes sense that welfare
                          payments should as well.

                          Alberta is the perfect laboratory for such an
experiment. While the province once had nearly
                          100,000 welfare cases, it now has just 27,000,
the drop being the result of significant cuts to
                          benefits for single, employable men in 1993
and an almost decade-long economic growth
                          streak. Thanks to the solid achievements
already won by Alberta's Tory government, the
                          government is able to test innovative ideas
without fear of bankrupting the treasury should the
                          initiatives fail.

                          Alberta should be careful about how Statistics
Canada develops the regional measures of
                          need, however. The provincial government has
asked the federal agency to devise the
                          yardsticks. But it is not asking StatsCan for
measures based on the agency's LICO (low-income
                          cut-off) measurement. That is sensible -- for
that widely cited statistic does not measure
                          poverty, but rather income inequality. The
Market Basket Measure being proposed by some
                          groups is also of dubious worth. Because it is
calculated by reference to the cost of a broad
                          array of goods and services -- including
entertainment -- the MBM is vulnerable to distortion.
                          Factors such as the higher cost of movie
tickets in big cities should not be relevant to the
                          calculation of welfare benefits.

                          The Alberta government must also ensure that
it makes frequent adjustments to regional
                          rates. Otherwise, windfalls will be generated
for recipients who lives in once booming towns
                          where times (and prices) go downhill. If such
windfalls are not quickly eliminated, the new
                          system will discourage recipients from moving
within the province to find work -- thereby
                          creating perverse incentives and artificially
inflating welfare roles.

                          These caveats notwithstanding, Alberta's new
plan is a sound one. And if it succeeds, other
                          provinces should copy it.

--
 Ian 'Tay' Landry, MA MSW  24 Indigo Walk  Halifax NS  Canada  B3R 1G4
   Ph: (902)479-2254   Cell: 830-2254   Pgr: 458-8543   Fx: 479-1177
tay@hfx.eastlink.ca  http://www.geocities.com/Athens/3023/  ICQ 5080641
Social Work Candidate   Community Developer   Sociologist   Researcher