Welfare isn’t broken, so it won’t be fixed

On Thursday, provincial Finance Minister Dwight Duncan will deliver the government of Ontario’s budget for 2010. As reported in last Wednesday’s Star, Duncan is set to announce investments in post-secondary education as part of the province’s Open Ontario plan and has pledged not to embark on a reckless deficit reduction program that would threaten jobs, services, and Ontario’s economic recovery.

It is also widely expected Duncan will announce action on the province’s social assistance programs, Ontario Works (OW) and the Ontario Disability Support Program (ODSP). And while anti-poverty advocates have long demanded major improvements to these programs, they shouldn’t hold their breath.

In pre-budget consultations, as they do year after year, advocates for the poor – and often the poor themselves – have claimed that Ontario’s welfare system is broken and needs to be fixed. And in many ways, they are right. With welfare rates at inadequately low levels, each month thousands of poor Ontarians must choose between paying the rent and feeding the kids. They turn to food banks to supplement their monthly cheques. They forego the everyday essentials many of us take for granted – things such as basic toiletries, haircuts and some of the creature comforts that make our stressful lives a little more bearable. Ontario’s poor endure the daily grind of poverty and they do so, remarkably, with their sanity and dignity intact. Given this context, fixing welfare means raising the rates and ensuring poor Ontarians maintain a decent standard of living.

That welfare is broken is not just the cry of anti-poverty advocates and “radical” activists; groups like the multi-sector Toronto City Summit Alliance and economists such as the TD Bank’s Don Drummond have called for a much needed modernization of the province’s income security policies. It is this widespread recognition that something must be done about poverty in Ontario, and the social policies which are meant to address it, that led the McGuinty government to adopt Breaking the Cycle, the province’s poverty reduction strategy which aims to reduce child poverty by 25 per cent over five years.

So why is the government unlikely to overhaul social assistance any time soon, if ever, despite its apparent commitment to an anti-poverty agenda? Sure, minor adjustments may well be made: for instance, currently an able-bodied unemployed person who has exhausted their employment insurance benefits must be destitute (i.e. with little savings) before becoming eligible for social assistance. Calls to exempt the first $5,000 of a welfare applicant’s savings, as they do in Alberta, may be heeded by the McGuinty Liberals. But despite these potential changes, welfare on the whole will not be fixed, chiefly because from the perspective of government and the business community, welfare is not broken.

To understand why is to understand the function of welfare. Poor relief, as welfare was once commonly called, was never designed to be a benevolent handout to the poor. From its roots in England’s Poor Laws through to the punitive social assistance reforms of the mid-1990s, welfare policy has operated on the principle of “less eligibility.” The historic 1834 report on Britain’s Poor Laws, issued at the behest of King William IV, stated: “The first and most essential of all conditions, a principle which we find universally admitted, even by those whose practice is at variance with it, is, that his (the relief recipient’s) situation on the whole shall not be made really or apparently so eligible (i.e., desirable) as the situation of the independent labourer of the lowest class.” Over 150 years later, the logic remains: The recipient of social assistance should never be better off than the lowest paid wage worker in the labour market. This is exactly what Mike Harris had in mind when his government introduced workfare and cut welfare rates by 21.6 per cent, and why the McGuinty government has done so little to reverse these changes.

Since the early 1990s, the Ontario labour market has been characterized by the growth and persistence of low-wage, insecure jobs or “precarious employment.” One in six workers in the province is making a poverty wage. Whether employed part-time in the fast-food industry or working security through a temp agency, the growing ranks of the working poor live in a world of labour market insecurity. Many workers cycle between low-wage employment and periods on social assistance, as they often don’t have the required hours to qualify for employment insurance. These workers are disproportionately racialized minorities, women, youth and recent immigrants. Business needs these workers to maintain the low-wage-big profits model of the “Wal-Mart economy” and governments across the country are in no mood to provide decent jobs through an expansion of public sector employment or reverse the deregulation of labour markets they’ve so vigorously pursued.

With these shifting trends in employment, welfare functions to ensure a cheap and flexible workforce to populate the lower reaches of the province’s labour market. To paraphrase University of British Columbia professor Jamie Peck, welfare today is not about creating jobs for people who don’t have them but about creating workers for jobs nobody wants.

Miserly benefit levels, restrictive eligibility criteria and the ritualized stigmatization of those who navigate the administrative maze of welfare, are all in keeping with the government’s desire to ensure a job at any wage, under any conditions, remains preferable to the receipt of social assistance. The province’s tooth-and-nail fight to keep social assistance recipients from having greater access to the special diet program (which they may do away with altogether) is only the latest manifestation of maintaining the principle of less eligibility.

So while anti-poverty advocates are right to claim that welfare is broken, in the eyes of the province and the business community, welfare is working just fine.


Published in The Toronto Star, March 24th 2010

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