March 27, 2003

After Welfare - Contrasting Studies

Statistics Canada has released a study on people who leave welfare that contrasts with the story spun by BC's Minister of Human Resources, Murry Coell. "Life After Welfare: The Economic Well Being of Welfare Leavers in Canada during the 1990s" by Marc Frenette and Garnett Picot (http://www.statcan.ca/english/research/11F0019MIE/11F0019MIE2003192.pdf) provides some fascinating contrasts with Coell's characterization of the 90s and with what are passing as welfare exit surveys in his ministry.

In the legislature's question period, Opposition Leader Joy MacPhail has been demanding that Coell account for his "review" of 19,000 people in receipt of disability benefits. Coell refused to say how many people he expected to have their benefits reduced, even though MacPhail produced a ministry document that said "The ministry expects that about 9,130 disability 2 clients - 20 percent of the caseload - will not meet the new criteria." Rather than answering simple questions, Coell turned his answers into an attack on the former government. On March 13th he said "In 1991, when unemployment rates were going down, what happened to the caseload for people who were on temporary assistance? It doubled." The data shows that the Minister doesn't have his facts straight.

The study released by Statistics Canada shows (Appendix table 3) that for men between ages 25 and 54 the unemployment rate increased in BC from 7.6% in 1990 to 9.5% in 1991, dropping to 9.3% in 1992. The early nineties showed similar bad economic results for the rest of Canada. For all of Canada, the unemployment rate for men of those ages increased from 7.2% in 1990 to 9.5% in 1991, and to 10.7% in 1992. Coell's recollection of the economic times inherited by the Harcourt government bears no relation to the facts.

Coell's account of what was happening to welfare roles in the 90s is also out of sync with the facts. The study released by Statistics Canada (Appendix table 1) shows that for all of Canada, the proportion of the population on welfare in 1991 was 8.2%. The proportion rose to 10.7% in 1994 before beginning to slowly decline. In British Columbia, the proportion of the population on welfare was lower than the Canadian average for every year shown in the study. In 1991 the BC proportion was 7.3%. It peaked at 10.0% in 1995 (one year after the peak for Canada) before gradually declining.

Coell's Ministry has been conducting "welfare exit surveys" for the apparent purpose of justifying harsh changes. The surveys certainly do not qualify as good research since the number of people with phones not in service exceeds the number of people surveyed. No effort is made to find out what actually happened to the people who left welfare in BC. Are they living with and supported by family and friends? Have they moved out of the province? Are they on the street? Coell would have people believe that 67% of those who left assistance did so for employment, and those who found a job have 2.9 times the amount of money they received on income assistance. It is very difficult to reconcile that claim with the results of the "Life After Welfare" study.

Coell's "study" tabulated results from a low response telephone survey of people who have been off of assistance for six months. Frenette and Picot's study used the Longitudinal Administrative Database (LAD) which is a 20% sample of taxfilers for the years 1982 to 2000 derived from the annual tax file provided by the Canada Customs and Revenue Agency. Their study didn't lose anyone. It tracked people who reported 80% of their income in one year as being from welfare and looked at their family income two years later. The study provides breakdowns of results by province. Frenette and Picot analyzed family incomes of 28,840 people who had left welfare. They ranked into deciles (ten equal parts) the families by how much they had improved their income. The top decile showed the kind of results reported by Coell's ministry, but after that the improvements in family income quickly dropped off. The bottom four deciles had lower family incomes than when they were on welfare! The study found that over five years following exit from welfare, 52% had returned to the welfare system at some point. The authors noted that this is consistent with American experience. The study looked at the one third of welfare leavers who experienced declines in income when they left the welfare system and attempted to answer why that happened. No satisfactory conclusions were reached.

The service plan for the Ministry of Human Resources says "The Ministry of Human Resources envisions a province in which those British Columbians in need are assisted to achieve their social and economic potential." Some believe that the Ministry's vision is to kick enough people off welfare so as to fund the tax cuts. If the Campbell government is serious about helping people in need achieve their social and economic potential, it should do the kind of serious research recently published by Statistics Canada and find out what is really happening to those who leave welfare.