The Government of Yukon has recently released its long-awaited

Social Inclusion and Poverty Reduction Strategy

It has been in the works for a while and there were several delays in releasing the document. But I am glad that it has finally seen the light. The entire strategy document can be downloaded from the following page: A Better Yukon. On the same page, the government released the 2010 background research report: Dimensions of Social Inclusion and Exclusion.

A socially inclusive society is one where all people feel valued, differences are respected and basic needs are met so they can live with dignity. Barriers in social, economic, political and cultural systems can prevent people from being part of their community. Everyone is affected by social exclusion and poverty, and everyone plays a role in finding solutions.

Vision

A Yukon where social exclusion and poverty are eliminated, diversity is celebrated, and all Yukoners have the opportunity to prosper and participate to their full potential, free from prejudice and discrimination.

I have been following the process of developing a social inclusion and poverty reduction strategy as a member of the Yukon Anti-Poverty Coalition. It is one of the grassroots organizations of civil society that keeps pushing the government to take action, or at least to think about how it can address the growing gap between the affluent and the ones left behind by our booming economy and our ever expanding government services and programs.

I also had the opportunity to do some background research for the Yukon Government’s Office of Social Inclusion and Poverty Reduction. My task was to establish the cost of poverty: What does it cost the public and the private sectors to have 20% of the population live with means that do not meet the daily needs? It is a surprising number in the vicinity of 6% of GDP!

The Yukon study was based on a methodology that was developed in Ontario. Several jurisdictions in Canada have since used the methodology and have published their reports:

The Cost of Poverty: An analysis of the economic cost of poverty in Ontario (Ontario Association of Food Banks, 2008)

The Cost of Poverty in Nova Scotia (Canadian Centre for Policy Alternatives, 2010)

The Cost of Poverty in BC (Canadian Centre for Policy Alternatives, 2011)

The real question is not  ‘Can we afford to reduce poverty?’  but  ‘Can we afford not to?’

These reports answer the call for all Canadian jurisdictions to estimate the cost of poverty as brought forward by the National Council on Welfare in 2002 and the parliamentary Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities (the HUMA Committee) in 2010. It is amazing what the cost of poverty to the public and the private sectors is based on this methodology that takes into account

1. the remedial cost from treating the symptoms of poverty (benefit programs, increase health care cost, increased cost in the justice system);
2. the intergenerational cost from the fact that not every person will have a chance to move up in society (many children growing up in poverty will stay welfare recipients throughout their lives); and
3. the opportunity cost from not realizing the potential of all people in society (lost productivity, unrealized tax revenue).

In the United States, the same questions were raised: ‘Can we afford to reduce poverty?’  or  ‘Can we afford not to?’

One report concludes:

…it is not only fair and just to reduce poverty in the U.S., but may be in the nation’s material self-­interest as well.”

Holzer H.J., Schanzenbach, D.W., Duncan, G.J., & Ludwig, J. (2007). The economic costs of poverty in the United States: Subsequent effects of children growing up poor. Institute for Research on Poverty, Discussion Paper no. 1327-­07. Madison, WI: University of Wisconsin-­Madison.

This US report summarizes that there is an economic case for reducing child poverty. When children grow up in poverty, they are somewhat more likely than non-­poor children to have low earnings as adults, which in turn reflects lower workforce productivity. They are also somewhat more likely to engage in crime and to have poor health later in life. Their reduced productive activity generates a direct loss of goods and services to the U.S. economy. This paper presents a review of a range of rigorous research studies that estimate the relationships between children growing up in poverty and their earnings, propensity to commit crime, and quality of health later in life. The authors also estimate the costs that crime and poor health per person impose on the economy.

Oppenheim, J. & MacGregor, T. (2006). The economics of poverty: How investments to eliminate poverty benefit all Americans. Entergy Corporation.

Investing in the eradication of poverty in America would increase the resources of each American household by an average of more than $18,000 a year, equivalent to a wage increase of more than 30 per cent. The savings from eradication of poverty are so substantial that it would actually be cost-­effective to close the poverty gap with cash grants. The report introduces the term avoidable cost of poverty, referring to increased public and private expenditures in the justice, health, employment, and social services sectors. 

These reports use a different methodology and their results and conclusions are not directly comparable with the above-mentioned Canadian studies.

While the “Cost of Poverty in the Yukon” report has never been released (as announced in December 2010), it may have encouraged the government leaders to continue considering a way to shape their policies to make them look more inclusive. I will review and discuss the newly released Social Inclusion and Poverty Reduction Strategy for the Yukon in more detail. Find the review here: A Better Yukon for All -the governmental strategy for social inclusion and poverty reduction.