Some claim that governments can reduce poverty by raising welfare rates, but welfare is not the way to reduce poverty.
Our only real gains against poverty have come from getting more low-income adults working.
We need to raise employment rates, not welfare rates.
Work is good for people and good for society.
Employment is the most likely path out of poverty for most adults on welfare, but if we want to move more low-income citizens to prosper, welfare is part of the problem, not the solution.
Welfare competes with wages.
When welfare is attractive compared to working, fewer people will work and pay taxes to support more who aren’t working.
This is unsustainable for the economy and for government budgets.
We nearly reached this tipping point 20 years ago when about one in eight Canadians was on welfare.
This came about because of recession, labour market restructuring and an increase in single-parent families.
In response, governments restructured benefits to make work more attractive and beefed up employment services.
The result has been lower family welfare dependency, steadily declining poverty rates, and a modestly more inclusive society.
The welfare system itself, however, is still intact.
There are tens of thousands of adults on welfare who could work but do not.
Too many children still grow up in workless households and never develop a work ethic. This is the case even in areas of the country with strong labour demand.
The key weakness of the welfare system is it pays people not to work.
Over the long term, people tend to do what they are paid to do.
The availability of welfare has, over the years, helped create a class of citizens who are not only chronically workless, but are outside the boundaries of the labour force.
To change, we need to leave behind the notion that fighting poverty is only about giving money to the poor.
How people get their money is important. The best way for a person to get money is to earn it, and the best way to reduce poverty is for more low-income adults to work.
To achieve this, we will need more rigorous work expectations of people asking for welfare.
Governments should protect entry-level jobs in the economy because these are the jobs welfare recipients need most.
Welfare itself should be stripped to a basic subsistence benefit, with supplements and supports available from work-friendly programs.
Help for a low-income worker costs less than welfare for a non-worker, and produces better outcomes.
We will need better employment services that would pay long-term dividends. When voluntary dependency is gone, we can eliminate most of welfare’s complex, demeaning rules.
The welfare system was created with good intentions to fight deep poverty. Because it exists, there is virtually no involuntary destitution in Canada.
As a tool against poverty, however, it has failed.
Canada could be a country where effort and reward still count, but where every adult who contributes is part of a community of citizens.
Moving closer to that goal means leaving the welfare era behind, and moving on to a more modern and dynamic social policy.
Rick August is author of Taming Two Dragons: Poverty, Welfare and the
Future of Income Support.
