|
There are many ways to shop for
your needs...
But only one adds social value to
Waterloo Region. Through the
Social
Purchasing Portal it's simple, straight forward and
socially responsible.
(Follow the link to learn more about
this exciting initiative!)
Download or Print new flyer!
|
|
Our Funders and Sponsors:
View
more... |
|
Community Conversations
Q & A Board
(Click
here to read instructions)
|
|
Contact us to purchase our
publication:
or a
Community Conversations
video
(click
here
to read a segment of Opportunities 2000)
|
|
E-mail us to
Sign up
for our Newsletter
|
| |
|
.jpg)
|
|
There are many ways to shop for
your needs...
But only one adds social value to
Waterloo Region. Through the
Social
Purchasing Portal it's simple, straight forward and
socially responsible.
(Follow the link to learn more about
this exciting initiative!)
Download or Print new flyer!
|
|
Our Funders and Sponsors:
View
more... |
|
Community Conversations
Q & A Board
(Click
here to read instructions)
|
|
Contact us to purchase our
publication:
or a
Community Conversations
video
(click
here
to read a segment of Opportunities 2000)
|
|
E-mail us to
Sign up
for our Newsletter
|
| |
Poverty in Waterloo Region
Economic Profile
The economy of Waterloo Region has long been considered one of the most
successful in Canada, thanks to a strong entrepreneurial work ethic, proximity to the
largest markets in North America and a diverse economic base.
But the recessions of the early 1980s and 1990s caused a major restructuring of the
region’s industrial base as firms downsized or closed in response to depressed consumer
demand, labour-saving technologies and lower-cost production. In the first half of the
1990s, nearly 50 manufacturing plants closed their doors, many of them long-standing
local employers such as B.F. Goodrich, UniRoyal, Labatt and Seagram. As a result,
15,000 manufacturing jobs and thousands of spin-off jobs were lost, and the local rate of
economic growth dropped dramatically.
Since 1992, however, the region has made a solid recovery thanks to the resiliency of
its local entrepreneurial base; the growth of high-value, knowledge-intensive companies,
particularly in computing hardware and software, telecommunications equipment,
engineering and environmental design; and the expansion of the FIRE (finances,
insurance and real estate) sector [CODA 1997].
Overall, the region’s shift to a high-tech, export-oriented, entrepreneurial economy
has resulted in impressive growth in economic output, employment and income creation.
Its annual GDP growth of 3.1 percent in real terms since 1989 has outperformed Ontario,
Canada and the other countries in the G7. The region’s $12 billion annual economy is
only slightly smaller than that of New Brunswick [Smith 1997].
By all accounts, Waterloo Region’s economic expansion and prosperity are expected
to extend well into the future. Manufacturing still comprises about one-quarter of
employment (which is above the national average) while growth in such areas as
environmental protection, software development and financial services is expected to
drive the high-tech sector. As a result of this expansion and the emphasis on exports,
Waterloo Region likely will be one of the top growth markets in Canada behind only
Calgary, Toronto and Vancouver.
Poverty Profile
Despite the region’s economic prosperity, unemployment remains high - an
estimated 7.9 percent in 1997 [HRDC 1998]. Since 1989, the region’s manufacturing
sector has suffered a net loss of more than 15,000 jobs, forcing many employable people
onto Employment Insurance (EI) or welfare. Combining the numbers on EI and welfare
with the discouraged workers who dropped out of the job market, close to 30,000 people
in the region are able to work but cannot find a job.
A growing number of low-income households belong to the category of ‘working
poor’ - those who are working but whose earnings are insufficient to keep them above
the poverty line. Many full-time jobs pay poorly. More than 20 percent of the regional
labour force works part time with low wages and few benefits [Regional Municipality of
Waterloo 1995].
Even in good times such as 1990 when local unemployment was 6.5 percent, the
poverty rate for the working age population was 10.8 percent, in part reflecting people
who were employed for low wages. In fact, on a national basis, poverty has continued to
rise despite an improved employment picture.
Statistics Canada’s low income cut-offs are used as the standard for measuring
poverty. These low-income lines represent levels of gross income where households
spend an above-average share of income on food, shelter and clothing. The poverty rate
refers to the percentage of households that fall below the low income cut-offs.
Twelve percent of the regional population - 42,000 individuals - had low incomes in
1990 (see Table 1). In that year, the total number of poor households in the region
included 11,600 unattached individuals (i.e., people living alone or with non-relatives),
9,700 families and 12,740 children under 18. While the Kitchener Census Metropolitan
Area (CMA) poverty rate was the second lowest in Canada in 1990, the data do not tell
the full story; they do not reflect the devastating impact of the 1992 recession which
swelled the low-income population.1 In 1990, the poverty rate was 12 percent for
Cambridge, 13 percent for Kitchener and 11 percent for Waterloo.
Income Distribution Profile
Average household income for the Kitchener CMA was $47,115 in 1990, the ninth
highest of all CMAs in Canada. The average income for men 15 and over was $31,980
compared to only $17,900 for women 15 and over.
Table 2 shows the distribution of households by income in the City of Cambridge.
Of the total 31,900 households, 4.3 percent had incomes of less than $10,000, 8.4 percent
had incomes between $10,000 and $14,999, and 5.8 percent had incomes between
$15,000 and $19,999. A total 5,920 households - or 18.5 percent of all households - had
incomes under $20,000 in 1990.
Table 2
Division of Households, By Income,
City of Cambridge, 1990
|
| Household Income |
no. |
% |
| under $10,000 |
1,385 |
4.3 |
| $10,000 to $14,999 |
2,690 |
8.4 |
| $15,000 to $19,999 |
1,845 |
5.8 |
| $20,000 to $29,999 |
4,130 |
12.9 |
| $30,000 to $39,999 |
4,255 |
13.3 |
| $40,000 to $49,999 |
4,465 |
14.0 |
| $50,000 to $59,999 |
4,295 |
13.5 |
| $60,000 to $69,999 |
2,935 |
9.2 |
| $70,000 and over |
5,900 |
18.5 |
| Total |
31,900 |
100.0 |
Table 3 shows the distribution of households by income in the City of Kitchener.
Close to 20 percent of households (19.5 percent) had incomes below $20,000 in 1990.
Table 4 shows the distribution of households by income in the City of Waterloo. Of
the total 26,270 households, 4.7 percent had incomes of less than $10,000, 5.6 percent
had incomes between $10,000 and $14,999, and 5.6 percent had incomes between
$15,000 and $19,999. Overall, 15.9 percent of households in Waterloo had incomes
under $20,000 in 1990.
Table 3
Division of Households, By Income,
City of Kitchener, 1990
| Household Income |
no. |
% |
| under $10,000 |
3,540 |
5.7 |
| $10,000 to $14,999 |
4,755 |
5.6 |
| $15,000 to $19,999 |
3,850 |
6.2 |
| $20,000 to $29,999 |
8,445 |
13.6 |
| $30,000 to $39,999 |
8,810 |
14.1 |
| $40,000 to $49,999 |
8,710 |
14.0 |
| $50,000 to $59,999 |
7,555 |
12.3 |
| $60,000 to $69,999 |
5,285 |
8.5 |
| $70,000 and over |
11,315 |
18.2 |
| Total |
62,265 |
100.0 |
| Average income |
$47,115 |
|
| Median income |
$41,885 |
|
Factors Linked to Poverty
The progress against poverty that Canada managed to achieve in the 1960s and early
1970s has stalled since 1975. Poverty has not declined overall in the last 20 years. The
low-income population was substantially larger in 1996 - 17.9 percent of all Canadians -
than in 1975 when it was 14.2 percent.
Contrary to popular opinion, the poor represent a very diverse population. Many
households move in and out of poverty because of labour market problems or changes in
their life circumstances, such as divorce. Some people remain poor for a long time.
Others leave poverty only to return soon after. Still other poor households manage to
leave poverty forever.
The fact that poverty affects so many adults and children at some point in their lives
suggests that it is deeply rooted in the economy and society. Changes to the labour
market, family structure and key income security programs are three major factors linked
to poverty.
labour market
In the past, Canada could count on economic growth and a healthy labour market to
fight poverty. Rising real GDP reduced the number and percentage of people with low
incomes, while a faltering economy had the opposite effect. An increase in the
proportion of employed lowered the poverty rate, while a decline in the
employment/population ratio produced more households with low incomes. The trends
in unemployment and poverty rates were mirror images.
But the traditional relationship between economic growth and poverty appears to be
breaking down. In 1995, the low-income population increased even though the
unemployment rate declined, GDP grew in real terms and the labour market added
214,000 jobs, the large majority of them (198,000) full-time. In 1996, the low-income
population went up only slightly: Yet the jobless rate rose from 9.5 percent in 1995 to
9.7 percent in 1996, real GDP grew slower than in 1995 (1.5 percent as opposed to 2.1
percent in 1995) and employment increased by only 1.3 percent (versus 1.6 percent in
1995) - almost half (80,000 out of a total 171,000 new jobs) of which was part-time work
[Battle 1997].
The culprit is the labour market, which is increasingly insecure and unequal. The
economy of the 1990s has seen strong growth in well-paid, high-skill jobs in fields such
as computer applications and financial services. But the economy also is creating an
abundance of nonstandard jobs which are often part-time or unstable, in many cases pay
low wages and offer few if any benefits. A job simply does not provide a living wage for
many thousands of Canadians, particularly families with children to support. In 1996, the
heads of half (50.3 percent) of low-income families worked but remained poor because
they earned low wages and/or could find only seasonal or part-time work [Battle 1997].
Unemployment remains a key cause of poverty. While most couples have both
spouses in the work-force, many families are only a job away from poverty. The national
jobless rate has crept up steadily since the postwar low of 3.1 percent in the 1940s. It
rose to 4.2 percent in the 1950s, 5 percent in the 1960s, 6.7 percent in the 1970s, 9.3
percent in the 1980s and an average of 10 percent in the 1990s.
Despite its dip below 9
percent in December 1997, unemployment in the 1990s is at its highest level since the
Depression of the 1930s, when it peaked at 13 percent. The estimated unemployment rate
for the Kitchener CMA was 7.9 percent in 1997 [HRDC 1998].
family structure and demographics
a. age
Poverty is the result not only of a changing labour market. It also is linked to family
structure and the demographic characteristics of the household. High on the list are
single Canadians under the age of 25. Their high rate of poverty reflects a variety of
circumstances, including the fact that many still are completing their education/training
and are earning only part-time or casual wages. In Waterloo Region, young people aged
18 - 24 had a high (17.2 percent) poverty rate, reflecting in part the labour market
problems experienced by this group [Statistics Canada 1993: 256].
b. gender
In addition to age, gender is a critical demographic factor in the poverty story. On
average, women have higher poverty rates than men and families headed by women are
much more likely to be poor than those led by men. In Waterloo Region, the poverty rate
for females (13 percent) is higher than the rate for males (10 percent) [CCSD 1996: Table
B.14].
c. family type
Family type is also a strong predictor of poverty. A major stress on the family is the
high rate of marriage breakdown.
Table 5 gives the different rates of poverty by family type in the Kitchener CMA.
One-half of single parents in the region are poor; the poverty rate jumps to 79 percent for
single parents under age 30. The rates are high despite the fact that most single-parent
families - 65.7 percent - participate in the labour market. Cambridge had the largest
percentage of single-parent families (12.4 percent) compared to (10.4 percent) for
Kitchener and (10.5 percent) for Waterloo.
While single parents face a high risk of being poor, even families with two working
parents can experience poverty. In the Kitchener CMA, only 4.1 percent of families with
two or more earners were poor; nonetheless they represent 49 percent of all poor families
with two or more earners - a level significantly higher than other urban areas. The high
percentage of two-earner households among poor families reflects the fact that many
workers are engaged in unstable or low-paid work.
d. child poverty
Child poverty remains a grave problem. One in five Canadian children lived in low-
income families in 1996 - just under 1.5 million or 21 percent of all children. Compared
to 1989, when the House of Commons passed a Resolution to work towards eradicating
poverty by the year 2000, there were 482,000 more low-income children in Canada in
1996 [Battle 1997].
The overall child poverty rate in the Kitchener CMA was 14 percent in 1990. The
poverty rate was 16 percent for children under age 5 and 13 percent for children ages 6 to
17.
e. other factors
Still other demographic factors are linked to poverty. Aboriginal Canadians are
significantly more likely to be poor relative to the rest of the population. Canadians with
disabilities are another group with a high risk of poverty. In the Kitchener CMA where
12 percent of all individuals are poor, higher than average poverty rates can be found
among Aboriginal individuals (15 percent for those older than 15), persons with
disabilities (20 percent) and visible minorities (24 percent).
New Canadians typically run a higher risk of poverty. While precise local figures are
unavailable, the Kitchener CMA likely mirrors the national statistics which show that
poverty rates are lower for native-born Canadians than for immigrants. In 1996, 20.9
percent of families whose heads were not born in Canada had low incomes as opposed to
13.0 percent of families with Canadian-born heads; the comparable figures for unattached
individuals were 47.8 percent and 38.9 percent, respectively [Statistics Canada 1997:
186].
Moreover, among immigrants, length of time in the country and poverty rate are
inversely related; the longer the time in Canada, the lower the poverty rate. The last
national count in 1996 shows that the poverty rates for families and unattached
individuals who arrived in Canada after 1989 were 46.7 percent and 64.0 percent,
respectively.
These rates are far higher than households which arrived prior to 1989. The
differences likely reflect the higher risk of poverty among younger people (more recent
immigrants tend to be younger on average than longer-established immigrants) and
change in the mix of countries of origin. Immigrants typically face greater costs
associated with settling in Canada (i.e., the immigration ‘head tax’ of $975) and setting
up a new household. Some also find that their professional qualifications are not
recognized in the Canadian labour market. However, it should be noted that new
Canadians generally use social services less than Canadian-born residents [OSSN 1997:
2].
income security programs
High unemployment creates heavy pressure on income security programs such as
Employment Insurance and welfare.
The new Employment Insurance program imposes tougher rules for qualifying and
reduces the maximum length of benefits. Those who exhaust their EI benefits or who do
not qualify often turn to General Welfare Assistance (GWA). Parents with children as
well as persons with disabilities generally receive assistance under the Family Benefits
Act (FBA).2
Table 6 shows the average GWA and FBA caseloads for Waterloo Region. The
figures reflect caseloads only; the number of dependents - i.e., spouses and children – is
not included. In 1996, the average time on social assistance was 11.84 months. The
caseload decline in 1996 and 1997 was due partly to changes in welfare eligibility (e.g.,
the Ontario government altered its calculation of family income to include adults without
legal responsibility for children) [Perry 1997].
In Cambridge, 5.1 percent of the population received either GWA or FBA in 1993.
While 2.4 percent of two-parent families received welfare, more than 58 percent of
single-parent families were on welfare (an increase of 20.4 percent since 1991).
Similarly, between 1991 and 1995, there was a dramatic increase of 46.1 percent in the
number of children living in families on welfare [SPCCND 1996: 39].
Recent changes to welfare have had a serious impact. In October 1995, Ontario
announced a 21.6 percent across-the-board reduction in benefits; only persons with
disabilities and seniors receiving benefits under the GAINS-D (Guaranteed Annual
Income for the Disabled) program were exempt from the cut. Declining benefits may
have contributed to the rising rate of low incomes among single-parent families led by
women, many of which have income from both employment and welfare. For
households already below the poverty line, the provincial cuts also have worsened their
depth of poverty - i.e., the average dollar amount by which families and individuals fall
below the low-income lines.
The available evidence suggests that many local residents are experiencing difficulties
meeting their basic needs. A recent report to the Region’s Health and Social Services
Committee noted that:
... local estimates of the costs for a family of four to purchase minimally adequate,
balanced and nutritious food during the course of a month reveal that the costs of
these food purchases would likely be beyond current social assistance rates. For
children, the likely results will be increased hunger and poorer quality nutrition. ...
As noted in the Social Services Department’s report SS-97-011, the House of
Friendship, the Region’s largest supplier of emergency food, note a 19 percent
increase in demands for emergency food in 1996. The Waterloo Region Health Status
Report revealed that poorer respondents had significantly lower consumption of fruits
and vegetables. Poor nutrition in childhood can thus have adverse lifelong
consequences, most of which have their attendant social and economic costs [Sider et
al 1997: 3].
While local agencies continue to provide excellent support to people with low
incomes, many organizations find themselves constrained in their ability to deliver those
services. One report estimated the October 1995 provincial cuts to social services at
$913,000 [SPCKW 1996]. Another report suggested that cuts to various social agencies
including family counselling, multilingual services, youth support and counselling for
women affected by violence totalled close to $1,657,629 [SPCKW 1996]. While local
agencies face increased demand, they must cope with far fewer resources. Family and
Children’s Services, for example, has reported a 10 percent increase in referrals. But
because of cutbacks in funding and staffing, they can accept only the most acute cases
[Goodwin 1997].
OP2000
While Waterloo Region is fairly prosperous relative to other parts of the country, it
still has a serious poverty problem. Poverty takes a major toll upon individuals, families
and the economy.
The Community Opportunities Development Association (CODA) in Waterloo
Region has embarked upon an innovative, community-based project to address this
problem. CODA is a non-profit community economic development agency with a strong
record in implementing programs that help reduce poverty and get unemployed people
back to work.
Over the next few years, CODA will engage with a wide range of partners to reduce
poverty substantially in the region. The organization also will work with community
leaders to produce a region-wide strategy for poverty reduction. The goal of CODA’s
project, called Opportunities 2000 (OP2000), is to remove 2,000 households from
poverty by the year 2000. The project seeks not only to assist participating individuals
and households but also to improve the overall economic and social well-being of
Waterloo Region.
Sherri Torjman and Dwayne Hodgson
Endnotes
1. In contrast to national poverty information, local poverty profiles are based on Census
data collected by Statistics Canada only once every five years. The most recent published
data are from the 1991 Census. Statistics Canada provides data on incomes for 25 major
Census Metropolitan Areas (CMA). The Kitchener CMA includes Cambridge,
Kitchener, Waterloo and the Township of Woolwich.
2. New welfare legislation that took effect in Ontario in December 1997 created two
programs with new eligibility requirements: Ontario Works and the Ontario Disability
Support Program.
References
Battle, Ken. (1997). Persistent Poverty. Ottawa: Caledon Institute of Social Policy,
December.
Battle, Ken. (1996). Precarious Labour Market Fuels Rising Poverty. Ottawa: Caledon
Institute of Social Policy, December.
Canadian Council on Social Development (CCSD). (1996). A Statistical Profile of
Urban Poverty. Ottawa.
City of Kitchener. (1994). Kitchener Profile. Kitchener: Economic Development
Division.
City of Waterloo. (nd). "Statistical Profile." Information provided by Pat Rudder, City
of Waterloo.
Community Opportunities Development Association (CODA). (1997). "Opportunities
2000 Project Detail." Cambridge.
Community Opportunities Development Association (CODA). (1996). "Waterloo
Region Statistics." Compilation of data collected from Waterloo Region Social Services
and Human Resources Development Canada, Cambridge.
Economic Council of Canada. (1991). Good Jobs, Bad Jobs: Employment in the Service
Industry. Ottawa: Minister of Supply and Services Canada.
Goodwin, Carol. (1997). "Child welfare workers fear disaster near." Kitchener-
Waterloo Record. December 10. Obtained via http://www.southam.com/kitchener-
waterloorecord/news/news1.html.
Hemple, Bob. (1997). "1991 Census Data for Waterloo Region and Cambridge."
Cambridge: City of Cambridge Planning Department.
Human Resources Development Canada (HRDC). (1998). "Estimated Annual
Unemployment Rate for Kitchener CMA." Kitchener: Southwest Area Economist’s
Office, HRDC.
Mattice, Randy. (1998). Personal communication. Kitchener: City of Kitchener,
Department of Planning and Development.
Ontario Social Safety Network. (1997). "Welfare Reform and Immigrants: Ontario
Social Safety Network Backgrounder." Toronto: Social Planning Council of
Metropolitan Toronto.
Perry, Leslie. (1997). Waterloo Region Social Services Department. Personal
communication, October 27.
Regional Municipality of Waterloo. (1995). Employment Services Division Annual
Report 1995. Waterloo: Employment Services Division.
Sider, Doug, R. Sax, B. Blowes and P. Johnston. (1997). "Child Poverty." Presentation
to Health and Social Services Committee, Region of Waterloo, February.
Smith, Larry. (1997). Regional Municipality of Waterloo. Dynamic Profile of Canada’s
Technology Triangle. Essential Economics Corporation, October.
Smith, Larry and Randolph Group Management Consultants. (1994). City of Cambridge
Economic Analysis. Randolph Group and Essential Economics Corporation, October.
Social Planning Council of Cambridge and North Dumfries (SPCCND). (1996).
Cambridge Neighbourhood Trends: Phase 2 Report Community Trends Project.
Cambridge: Social Planning Council, February.
Social Planning Council of Kitchener-Waterloo. (SPCKW). (1996). "Common Sense
Revolution Updates." Kitchener-Waterloo Labour Review 1996. Kitchener.
Social Services Department, Regional Municipality of Waterloo. (1997). "General
Welfare Assistance (GWA) Recipients for Waterloo Region including the Cities of
Cambridge, Kitchener and Waterloo." WWINet Home Page http:wwinet.hrdc-
drhc.gc.ca/mi./unstats/sars/gwaat.html/. Kitchener Labour Market Information Unit,
Human Resources Development Canada.
Statistics Canada. (1993). Selected Income Statistics: The Nation. Ottawa: Minister of
Industry, Science and Technology, April, p. 256.
Statistics Canada. (1992). Income Distributions by Size in Canada: 1996. Ottawa:
Minister of Industry.
Torjman, Sherri. (1997). "The Story Behind the Story: The Socioeconomic Context of
Opportunities Planning." In Brian Reid. From Welfare to Work: A Community Success
Story in Creating Employment Opportunities. Cambridge: Community Opportunities
Development Association, pp. 90-113.
Torjman, Sherri and Dwayne Hodgson. (1998). Poverty in Canada and Waterloo
Region. Ottawa: Caledon Institute of Social Policy, February.
|