In 1992, the Fraser Institute published Poverty in Canada. In that book, I proposed a “basic needs” poverty line as an alternative to various unofficial “relative” measures of poverty. I explained that the basic needs behind the poverty line consisted of nutritious food, purchased at grocery stores; rented accommodation appropriate to family size; clothing purchased new at a major Canadian department store; telephone (local service); household furnishings and supplies; personal hygiene needs; any necessary health care requirements (mostly covered by medicare in Canada); and necessary transportation linking the household to other basic needs. I stressed in my elaboration of the concept that each of the basic needs must be at a level of quality considered minimally “decent” in the community or society in which the members of the household reside.
Subsequent criticism of this concept of poverty has been largely misplaced. There exists a fundamental misunderstanding of what basic needs represent, and great confusion about the purpose of a basic needs poverty line.
Basic Needs poverty lines are not “subsistence”
For example, the newly released “Market Basket Measure” (MBM) of poverty by a federal-provincial-territorial task force refers to the Sarlo basic needs poverty line as a “subsistence” measure. This terminology is not appropriate. The common usage of the word subsistence suggests “bare survival” and “a minimum requirement to be kept alive.” This is hardly a description of “basic needs” which incorporates all the elements of long term physical well-being (nutritious food, health care, appropriate accommodation) and emphasizes the standard of quality of these items that is acceptable in the society.
Subsistence, as it is generally understood, would be well below that—consisting of little more than food in a soup kitchen or food bank, and a cot in a shelter. As well, the term subsistence connotes a real sense of misery and discomfort. It would be the standard of living, for example, of people at the very margin of society: that of runaways, alcoholics, and drug addicts living in rented rooms or on the streets. In contrast, the standard of living at the basic needs level would be that of most graduate students at university, or a significant portion of Canada’s elderly. In other words, it is a standard where there is little money for “social amenities” but where all the basic necessities (as above) are covered. It is not an uncomfortable standard of living. And it is sustainable for the long term. This is not merely an exercise in semantics. The difference between basic needs and subsistence is real.
Basic Needs poverty lines are not goals for the poor
Another common misconception about the basic needs concept flows readily from the first. This has to do with the purpose of the basic needs approach to defining poverty. Unfortunately, many people in the social welfare community view poverty lines as goals—as levels we want for the poor. They often argue that the basic needs level is too low and that it is too hard for people to live at that income. It is as if those of us who use basic needs poverty lines are condemning the poor to these low living standards. The absurdity of this line of reasoning hardly needs exposing. The sole purpose of a basic needs poverty line is to enable us to determine how many Canadians do not even have their basic needs covered. One would think that all students of poverty and all concerned Canadians would want this information.
The problem with the relative measures
By interpreting poverty lines as goals and by connecting them to policy levels of support, social activists end up with poverty lines that are relative (after all, isn’t it everyone’s goal to have the poor share in the prosperity of our economy?) and far too high to be credible (because, again, it is a goal). For decades, the social welfare community has largely driven the poverty research agenda. Using their high, relative lines, they have given Canadians a very distorted picture of both the magnitude of poverty in Canada and its trend over time. The best example is the oft-repeated but utterly preposterous claim that one Canadian child in five is impoverished. This is the mess we find ourselves in.
How to end the confusion
There are some hopeful signs. The government’s Low-Income Cut-Offs (LICO) are viewed with increasing scepticism, especially at the provincial level. There seem to be more media stories questioning the conventional social welfare take on poverty. And the government’s own MBM does bring some realism to the measurement of poverty by focusing on the cost of an actual basket of goods. The problem with the MBM, I fear, is that the task force has tried too hard to reach the great Canadian compromise. It goes well beyond any reasonable list of basic needs but does not rise to the level of “social inclusion” desired by relativists. As it stands now, I do not think it will satisfy anyone who has reflected deeply on the nature of poverty.
My advice to the federal task force (and others in this field) has always been to consider the use of two lines: one, a basic needs poverty line that would help inform Canadians about the extent of real deprivation in Canada, and another, set at perhaps twice the basic needs line, that would tell us about the deprivation of social amenities. The latter, although important and interesting, does not have the same urgency about it as the former. The use of two lines would be a reasonable solution to the current state of confusion about poverty.