by David P. Ross

Child poverty on the rise. Earnings gap between rich and poor families widening. Canada's economy rebounding, but many families falling into poverty. Are these alarmist headlines, or cause for real concern?

The most recent figures from Statistics Canada indicate that in 1996, 1.5 million children were living in "straitened circumstances" – an increase of 60 per cent since 1989. I and many others equate this with living in poverty, but not all economists agree. They argue that these Statistics Canada figures do not represent real poverty lines, and as a result, they have suggested that Canada's child poverty figures are wildly over-inflated.

Those on the political right, represented most vocally by the Fraser Institute, say that equating Statistics Canada's low income cut-offs (which is the line under which the agency says people are living in "straitened circumstances") with poverty overstates the amount of money that families need to survive, and consequently, overstates the number of poor children. According to the Fraser analysis, child poverty is really only a problem among those who live in families where incomes are so low that the parents cannot even afford adequate food and shelter – which they estimated to be the case for less than 400,000 children in 1994.

On the other side of the political spectrum are economists like me who believe that Canada needs to offer the greatest possible economic and social equity to its citizens. I consider the numbers from Statistics Canada to be a reasonable measure of poverty in our country. But recent research that my colleagues at the CCSD and I have conducted, suggests that by catering to the media's ever-present need to quantify societal problems, such as poverty, we have overlooked the real consequences of economic hardship – both for those who suffer with few resources, and for society at large.

In response to critics who suggest that it is enough to simply offer our poorest citizens bare physical survival, let me remind them that Canada is not a Third World country. Ours is a socially complex, economically advanced, and democratic society. In order for people to succeed in this society, they must do far more than just physically survive. They need a huge number of skills, many of which are learned during childhood.

As Canadians, we take pride in our No. 1 ranking by the United Nations for our quality of life. We value our level of safety, cohesion, civility, our generally high standard of health, and our economic and cultural prosperity. Few among us would want to create a large underclass of desperate people who are unable to attain and help maintain these societal goals.

What, then, are the potential threats to our envied status? I suggest there are at least two major concerns: the growth of earnings inequality in Canada, and the current trend towards slashing vital public services such as health care, education, and social assistance.

For the first time in Canada, there is abundant and compelling statistical evidence that family income has a major effect on child well-being. The data show that as family incomes rise, children's chances of developing to their full potential increase steadily. There is no magic poverty line above which children are guaranteed to thrive, and below which they are sure to fail.

That is my conclusion after analysing data from two new national surveys – the National Longitudinal Survey of Children and Youth (NLSCY) and the National Population Health Survey (NPHS). Together, these surveys are tracking more than 20,000 children and families over time, in order to better understand the factors that influence their health and well-being. Thirty-one different indicators of good health and well-being used in these surveys all show that as family income falls, the likelihood that children will experience problems rises.

Data from the surveys indicate that rates of poor health, hyperactivity, and delayed vocabulary development are much higher among children in low-income families than among children in middle- and high-income families. A child's likelihood of participating in organized sports activities is dramatically lower if they live in poor and modest-income families; rates of positive social relations and activities increase with family income. More than 16 per cent of older teens in poor families are at loose ends – they do not attend school, nor do they have a job – compared to less than four per cent of teens in high-income families.

Family Income and Child Outcomes
	Income Ranges
Per cent of children with...	less than $20,000	$20,000 to $39,999	$40,000 to $59,999	$60,000 to $79,999	over $80,000
lower functional health	13.4%	8.6%	8.1%	8.3%	5.1%
above average hyperactivity scores	63.6%	53.8%	52.9%	52.5%	45.8%
delayed vocabulary scales	30.2%	18.5% ($20,000-29,999)	17% ($30,000 to 39,999)	12.1% (over $40,000)	.
low math scores	.	20.6% (<$40,000)	15.2%	12.2%	11.1%
infrequent participation in organized sports	69.2%	53.3%	39.2%	31.2%	21.6%
16-19 year olds not employed and not in school	15.6%	8.3%	5.6%	4.8%	3.6%
Source: Prepared by the Canadian Council on Social Development using the National Longitudinal Survey of Children and Youth, 1994-95 and the Survey of Consumer Finances, 1996.

Where do children who live in families with annual incomes below $27,000 (the average Statistics Canada low income cut-off) fit on the scale of access to opportunity? They have the second lowest scores in each area listed above.

If Canada's anti-poverty objective is to roughly equalize children's chances to become successful adults, then we need to determine how best this can be accomplished. Now I am not suggesting that every family must have an equal-sized income, because much of a family's income is spent on items unrelated to child development. But we do need to carefully consider our public spending priorities.

The more support we can provide to people in the form of educational opportunities, the greater the likelihood that they will become productive, self-supporting (and tax-paying) citizens. And the more public services we can provide – such as in education, child care, health care, and access to culture and recreation – the less likely it is that a child's life chances will be severely limited by their family's income.

Our goal in Canada should be to reduce the "poverty of opportunity" for children and to increase the number who make a successful transition to adulthood. There are four main ingredients for success in human life:

• Good health – attaining a state of physical, mental, and emotional well-being.
• Good social skills – being able to get along with family, neighbours, co-workers.
• Good learning skills – acquired through formal education, cultural and recreational activities.
• Good earning skills – being able to economically sustain oneself and one's family.

Successful adults grow from successful children, and healthy child development requires more than just basic food and shelter. It is dependent upon access to economic resources, and shelter, access to good health care (including pre- and post-natal care, and dental care), positive parenting and child-care experiences, access to good schooling, to recreational and cultural opportunities, an involvement in community life, and a physical environment that is safe from pollution and crime.

Knowing all this, how much inequality of opportunity should Canada tolerate? First, there is the question of morality and social justice. How much inequality do Canadians think is fair or just? How much do we want to help children who are living in poor circumstances beyond their control?

Second, we must weigh the costs of doing something today to better equalize opportunities, against the future costs of doing little. The CCSD's research shows that the higher the incidence of children living on very low incomes is today, the greater the economic and social costs are likely to be tomorrow as fewer children make a successful transition to adulthood.

One dollar 'saved' today simply represents several dollars of spending delayed. For example, one child in a neonatal intensive care unit costs the health care system $8,400 a week. If that child was born at a low birth weight because its mother was malnourished, we have not saved any money by depriving the mother of an adequate level of social assistance so that she can feed herself properly during her pregnancy.

Given the evidence that a child's equality of opportunity to succeed rises gradually with family income, is it still worth discussing poverty lines? Yes, in so far as Statistics Canada's low income cut-offs are a useful reminder that a proportion of our population faces poor opportunities for success. Do Canadians accept the cut-offs as a reasonable measure of poverty? Gallup polls since 1976 show that public opinions about poverty levels regularly mirror Statistics Canada's cut-offs. Clearly for the majority of Canadians, poverty lines suggested by the Fraser Institute would engender far too much deprivation in Canada.

When considering the issue of poverty, however, our society has a far bigger task than simply arguing over dollar figures. We must determine how much poverty of opportunity we are prepared to accept among defenceless children. We need to set the discussion of child poverty within the context of successful child development, and end the debate about how many grains of rice a day are necessary to keep a body alive.

David P. Ross is the executive director of the CCSD. This article is based on research for a report called Rethinking Child Poverty, to be released by the Council in the fall of 1998, and from previous research for The Progress of Canada's Children 1996 and 1997.

Canadian Council on Social Development, 190 O'Connor Street, Suite 100, Ottawa, Ontario, K2P 2R3