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A PROFILE OF POVERTY
IN MID-SIZED ALBERTA CITIES

by Kevin K. Lee and Cheryl Engler

January 2000

     

Section 4: Education, employment and poverty

Education levels and poverty

From a human capital perspective, higher education is one of the more important factors associated with success in the labour market and higher incomes. As the labour market increasingly demands high-skilled workers and the general population becomes better educated, those individuals with relatively low levels of education are finding the labour market less and less accommodating. Therefore, this trend has implications for their ability to stay out of poverty.

As shown in Table 4.1, poverty rates for individuals aged 15 and over varied by their formal education level.⁸ Regardless of location, the more education a person possessed, the less likely he or she was to live in poverty. For the average of the mid-sized cities, poverty was highest among persons with less than secondary school (21.4 per cent) and lowest among persons with a university degree (7.0 per cent).

Poverty rates for populations at each level of education also varied by geography. As shown in Table 4.1, poverty rates for individuals at all education levels were lower for the mid-sized city average than for the province of Alberta. However, there was significant variation in rates by education among single mid-sized cities. For example, the highest poverty rate among persons with less than high school was 24.7 per cent (Red Deer) and the lowest rate was 16.9 per cent (Wood Buffalo) – a difference of 7.8 percentage points.

However, education was likely not equally rewarded in the labour market in all cities. In Lethbridge, for example, the poverty rates for individuals with less than a high school education and for those with less were very close. In Grande Prairie, the likelihood of poverty among those with either a high school diploma or a trade certificate differed little. In Red Deer, however, university graduates were substantially less likely to live in poverty than were those holding trade certificates.

Employment and poverty

Every city has a unique economy due to a variety of economic factors, including variations in local industry and occupations. Economic restructuring in Canada has had a greater effect on some cities compared to others. Some industries are growing and others are declining. Some jobs pay better than others. These and other factors contribute to differences in the labour market of each city included in this study. As such, each city provides a distinct mix of opportunities to the local workforce.9

Within this context, one might expect that the less paid employment a potential income earner has, the worse off he or she is economically. However, a relationship between employment and poverty is not always obvious. Often times, individuals and families can compensate for a lack of earnings through additional family income earners, extended family support, the liquidation of assets, receipt of government transfers or other means. Some of these people may be vulnerable to poverty, whereas others may not face economic hardship at all. While low levels of employment activity do not always result in poverty, these data demonstrate that there is indeed a relationship between these factors.

The influence of employment on the likelihood of poverty becomes clearer when we consider a person’s annual employment activity and his or her poverty status. This subsection examines individuals aged 15 and older in the selected cities by whether they have been employed for a full year (full-time and part-time), part of the year or not at all in 1995.¹⁰

Table 4.2 shows that in general, individuals with more annual employment activity were less at risk of being in poverty. On average in the mid-sized cities, 23.3 per cent of the population that did not have employment during the year was poor. In contrast, only 6.3 per cent of the population that was employed full-time for the whole year was poor. In addition, it should be noted that the difference in poverty rates for individuals with no annual employment and part-year employment was minimal.

As with other variables, the poverty rate for individuals in each employment activity category varied by geography. The poverty rate for the mid-sized cities average was lower than the provincial average among individuals who had no annual employment activity and who were employed full-time full-year, but was higher among those that had part-year or part-time full-year employment. As well, variations in rates existed among each city. For example, 16.7 per cent of individuals who were employed part-year were poor in Wood Buffalo compared to 25.3 per cent of these individuals in Lethbridge.

Although full-time full-year jobs significantly reduced the likelihood of poverty, they did not eliminate it. In every city examined, a proportion of the fully employed population was poor despite their work activity. This proportion was lowest (3.2 per cent) in Wood Buffalo and highest (8.5 per cent) in Medicine Hat.

 

     

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