December 30, 2010
Feedback - The Road to Ruin
Well written article Peter (Shawn Taylor). You have backed the argument for care ownership among welfare recipients particularly well.
The article brings to mind a number other poverty traps that are associated with moving from social assistance to paid work. These include high marginal rate claw backs of benefits that exceed the highest marginal tax rate on earned income. Yes, cars are quite important, but so is the ability to maintain other benefits such as child dental or vision coverage as well as day care until a person has the security of employment to receive those benefits from an employer. Perhaps a good starting point is to raise the cash value of social assistance payments instead of providing services in-kind so that people can earn a full return from employed income. That approach could be coupled with the availability of the equivalent of group insurance that could move with the individual instead of being tied to the source of income (i.e. the government or the employer).
The other change that is required is to increase the amount a person can earn before benefits start to be clawed back. As it stands, the system really encourages a shadow economy of people working under the table for cash instead of participating in the more stable wage economy.
My wife lived in the UK and relied on social support when her children were young. Their system is even worse than Canada’s in terms of presenting a poverty trap because housing and transportation is means tested in addition to our packages of health and day care services. When she was in that situation, she earned less than $1 per hour incremental money from working at a minimum wage position than she did doing nothing. Any logical person in that situation searched out opportunities to work occasionally for cash in very vulnerable employer-employee relationships that were open to multiple forms of abusive practices.
The NDP government professes to the on the side of marginalized people in society, but I sometimes wonder if they are more concerned about preserving unionized employment for social workers and day care staff than they are with genuinely improving the lot of people who find themselves reliant on social welfare supports.
The issue that you identify with cars is only one element of a multi-faceted situation that impedes a person from improving their lot in life at virtually every turn. It is time for a genuinely progressive change that helps people to escape the welfare trap and most importantly arrests any movement towards multi-generational reliance of social welfare as has occurred in the UK.
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