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December 10, 1999 Halifax Herald

Good conscience demands action to ease poverty

Prior to the birth of the Welfare State in the early 1960s, life was largely uncomplicated. Government was small and decentralized. The standard of living was improving at a steady pace. Most of the people were generally content and secure. The future was bright.

However, not all was positive; many diverse social problems needed attention. This need attracted Social engineers, inspired by ideas of creating worldly Edens. With mindless gusto they set out to turn Canada into one by changing everything.

Thus began an era of unprecedented social engineering that would leave a fairly decent lifestyle unrecognizable. And, incredibly, it played out with the full acquiescence of the Nation's politicians. They, rather than acting with caution, jumped on the bandwagon with reckless abandon and spent billions trying to create the Eden envisioned. Their spending spree begot an unsustainable false economy that triggered astronomical wage increases. This accustomed a multitude of workers to a standard of living well beyond the means of the Nation.

For a while, it appeared that Eden had been realized. But two warning signs of a flop were there to see if one wanted to see them. The cost of living was rising fast, and government had grown in size to where it was unmanageable and unresponsive.

Reality resurfaced in the 1980s. Years of gigantic deficits had undermined the economy to the point where deep cutbacks were mandated. The first to feel the brunt were the masses of highly paid public servants that governments had employed to implement its dreams. They were laid off by the tens of thousands and, thus, relegated to the realm of low-paid unsecured employment. Industry, motivated primarily by a desire to increase profit margins, followed suit. More joined the ranks of the poor. All this sorrow was begot because social engineers failed to take into account long-term funding needs when dreaming up their plans for Eden.

One of the many things that worked well, before the expanding period started, was the method used to award wage increases to employees. Before then, most received the same raises. For example, if a company decided to give a raise of twenty five cents an hour, foremen and labourers alike received the same amount. As a result, the gap between rich and poor remained fairly constant. Then, probably motivated by greed, somebody was successful in tying wage increases to percentages. This caused the rich/poor gap to begin to widen fast.

The following are simple scales which show how both methods work. The results are an eye-opener.

An imaginary widget factory has wage scales ranging from $10,000. to $100,000 - a. spread $90,000. Using the old method, over a ten year period, all employees receive annual raises of $1,000. At the end of the period, the bottom level is $20,000., the top is $110,000 -.a spread of $90,000, no change. Using the modern way, over a ten year period, employees receive annual raises of 10 percent At the period's end, the bottom level is $25,939 and the top is $259,375 - a spread $233,436, a monstrous widening of the gap.

Such results are not conducive to creating a just society. The playing out of these games of greed are the prime reasons why people are falling into the poor category at an ever increasing rate. Cutbacks to balance the books will not solve the problem. Creative thinking is needed to come up with long-term, responsible solutions. The old policies are bankrupt!

Largely related to the cutbacks of the last fifteen years or so, because of the lack of foresight pointed out, roughly 20 percent of Canadians are now rated as poor. Some experts estimate it to be as high as 40 percent. Using the official figure, it would translate into six million living in poverty; using the unofficial figure would mean twelve million. Either figure, or somewhere in between, is intolerable.

To reverse this slide of a large portion of the population into Third World financial status, forceful and pragmatic action is needed. Suggestions: End wage increases based on percentages. Freeze indefinitely all salaries over $80,000. Scrap the $5.60 minimum wage, which provides a starvation existence, and replace it with a living wage. Hike personal income tax exemptions to $10,000 and $2,000 per child (taking income tax from the poorest of the poor is criminal). Steps of this nature would start the process of planning for a sustainable future.

Food for thought: If you are among the lucky ones who have a one-source annual income of $30,000 or more and feel its inadequate to meet your needs, try to imagine how you would make do in the following scenario:

A personís gross annual income, derived frm 40 hours of work per week at the minimum hourly rate of $5.60, equals $11,648. From it, deduct income tax, employment insurance and Canada Pension Plan contributions for a total of $1,641, leaving $10,007. Then deduct employment transportation costs, lunches and miscellaneous expenses, estimated at $1,300, leaving a net income of $8,707. From this deduct rent, heat, lights and phone costs of about $6,500, leaving a balance of $2,207.

We must now assume that the person is a miracle worker: He/she is left with the magnificent sum of $42.44 per week to purchase all the other essentials of life. After buying the cheapest food available - in some cases cat and dog food - luxury would probably be an occasional candy bar.

Well, my friends, many thousands of single persons are trying to survive on such totally inadequate incomes. But even worse, many thousands of families are trying to survive on similar amounts. Suicides, murders and suicide pacts have occurred because of the poverty suffered. Good conscience demands remedial action, NOW!

Daniel N. Paul

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DANIEL N. PAUL

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