Counting the poor: Lies, Damned Lies and Humble Admissions

web posted September 1997

I've always harbored a bit of mistrust of statistics. Through four years of university, both the methodology behind and the scientific use of statistics, were drilled into my head by well-meaning psychology professors intent to prove that something as mysterious as the human mind could be documented with a few numbers. Probably one of the reasons why I and the pseudo-science parted ways.

One of the nation's trusted purveyors of statistics which is cited quite often in this journal, Statistics Canada, recently made a humbling admission.

"In the final analysis it may well be argued that poverty is simply too subjective a concept to be measured in a statistically objective manner," said the agency in a report released only under the Access to Information legislation.

It seems that the agency has come to the conclusion, that after three decades of trying, and failing, it cannot measure poverty. Indeed, the agency even admits that it cannot define the provide a meaning of the word that is acceptable to all.

Since 1967 Statscan has been publishing what it calls Low Income Cutoffs (LICOs). The LICOs have been used by social activists as the official poverty even though Statscan says that they are not.

"While Statistics Canada has always maintained and continually stressed that the LICOs are not a measure of poverty, little attention has been paid to these cautions."

The problem with LICOs is that they were defined in a completely arbitrary manner. In 1967 it was decided that a family was considered low income if it needed to spend 20 percentage points more for the basic necessities of food, shelter, and clothing than Canadian families spend on average.

And it is that definition that is the gulf between those who accept LICOs and those who do not. Social groups tend to define poverty as a low level of income relative to the average or median income of other Canadians.

On the other side of the debate are groups like The Fraser Institute, long opposed to the measure, who argue that the LICOs do not take into account a family's or individual's wealth. Even Statscan admits that spending on caviar and fur coats would count under money spent on "basic necessities", potentially skewing the numbers.

In a study about a year ago, the Institute argued for moving towards a "basic needs index."

"A basic needs index provides more relevant information about the nature and extent of poverty in Canada," said Chris Sarlo, professor of economics at Nipissing University, North Bay, Ontario. "Most of those who are now defined as poor using conventional measures would have been solidly middle class a generation ago. These conventional measures, such as LICO, tell us about inequality and the lack of 'social comforts', but very little about the true nature of poverty."

The debate between the friends and opponents of the LICOs does not reveal the full extent of damage that it has caused to Canada. It is what is actually done with the figures that has been the cause of consternation for many on the side of less government intervention in our lives.

The LICOs are used by the various governments of Canada to formulate social policy. One example were the recent moves by Ottawa and some provincial governments to attack child poverty, which the low-income cutoffs suggest has been rising.

And for 30 years those figures have been used as justification by successive governments to dump untold billions into the social net. Every year more money was spent but the problem according to the LIDOs only got worse. What was the natural solution? Spend more money. The cycle repeated itself for decades.

And so what happens after this admission? Statistics Canada says that despite its concerns that its low-income cutoffs are being misrepresented as poverty lines and are controversial even as a measure of what it calls "financially difficulty or straitened circumstances," it will continue to publish them because it has not found an acceptable alternative.

"...one might conclude that after significant studies and much public debate over the matter of income distributions and the definition of poverty, not much real progress has been made...The agency does, however, see the LICOs as a means of publishing complex income distribution data in a readily consumable fashion."

Summary: LICOs is admitted to being a measure with little credibility for what it is used for. We will still continue to publish them because we have nothing else better. They will still be used by social activists to demand more money for failed initiatives and governments will continue to rely on them as measures of their successes and failures.

And so the robbery of Canadians continues, even after a humble admission.

Thanks for reading,

Gord Gekko


ESR News

La de da...I hope you like Enter Stage Right's new look. Far too many caffeine-based beverages and late nights went into thinking up ways to spruce this thing up. Apart from some minor changes that will continue to be made inside, this is the permanent look. Of course, I said that in June of this year as well.

With the exception of the first five months at CyberSudbury, Enter Stage Right has had mixed success with our hosts. Caf.com was perpetually up and down and now GeoCities is proving to be less than 100 per cent when it comes to up time. You may have noticed that the last few days of July to the beginning of August witnessed GeoCities suffering a equipment failure which hit CapitolHill/Lobby (as well as a number of other 'neighborhoods') which resulted in ESR being down and for a short time some missing files, and then other downage in mid-August.

I can't fault GeoCities too much, they are providing a free space and a guest book, among other services, for their users. While I don't mind free, what's more important is good.

For example, I couldn't FTP ESR the night it was finished and had to wait until I was at work the next day. Over one hour and 25 attempts later I finally got the journal up...and days later during another failure, a file with an error in it was discovered and once again technical problems meant I couldn't FTP a replacement until later.

Enter Stage Right will likely be purchasing its own domain name and space on a local (stable and reliable) provider as a mirror site, hopefully with traffic shifting there gradually. Fear not though, GeoCities is a permanent home for us and we'll be here as long as GeoCities is.

Hey You! That's right you! I'm thinking of stealing a decent idea from Slate magazine and running responsible debates between two people on opposite sides of an issue. I haven't decided what the topics will be yet, but I was hoping for at least two different threads in each issue, with updates throughout the month. Response would be emailed from the various parties to me, forwarded, and compiled for publication. If you're interested drop me some email.

Enter Stage Right is free, but we do ask for one thing. Feedback. Please feel free to leave an entry in the guestbook or mail us with your comments. We're always happy to hear from people with positive comments or constructive criticism.




Current Issue

Archive Main | 1997

Musings - ESR's blog

E-mail ESR


Loading

Send a link to this page!

 


Home

1996-2013, Enter Stage Right and/or its creators. All rights reserved.