S P R I N G 2 0 1 2

(1) What is Poverty?

(2) Why Does Poverty Exist? (3) WhoisAffectedbyPoverty?

(4) HowisPovertyReduced?

poverty incalgary –AFourPartSeries

Thisisthesecondbookletinaseriesthat aims to provide a glimpseinto the complexities around whatpovertyis,whyitexists,whoitaffects,and how it can be reduced. Thisserieswasresearchedandauthoredcollaboratively by United Way ofCalgaryandArea,TheCityofCalgary,and Vibrant Communities Calgary.

FrontCover,InsideFrontCover,andBackCoverPhotoCredit:MingEmmaKo

1 in 10 Calgarians

livein povertyNearly

400,000 Albertans

livein poverty

why does povertymarketfailure?unemployment?limitedfamilysupports?gapsinsocialsafetynets?lackofcommunitysupports?discriminationandsocialexclusion?

1 in 10 Calgarians

livein povertyNearly

400,000 Albertans

livein poverty

Whilethesenumbershelpusunderstandthemagnitudeoftheissue,theydolittletotelluswhypovertypersistsamidsomuchprosperity.Ifwearetoreducepoverty,weneedtounderstandmoreabouttheinter-connectedcausesofpoverty,andwhyitaffectssomemorethanothers.Thisbookletexploressomeofthesequestions.

3

exist

poverty exists becuase...poverty exists because...of compounding

causes

Thereisnosinglecauseofpoverty.Rather,therearemultiplecausesthatarelinkedandcompounding.

Povertycanstrikeduringanunexpectedcrisis:aserioushealthproblem,jobloss,ordivorce.Thesecrisescanbeparticularlydebilitatingwhencompoundedbyotherriskfactorssuchasloweducation,limitedskillstraining,lackofsavings,orlackoffamilysupports.Povertycanresultfrompersonalstruggle–physical,mental,oremotional–andmanypeopleexperiencingpoverty are faced with a lack of emotional, psychologicalor financial support. Poverty also exists because of biggersystems:changingmarketdemandforskillsorlabour,gapsinsocialsafetynets,thehighcostsofeducationandhealth,orbecauseofsystemicdiscrimination.Povertyexistsforalltheseinterlockingreasonsandiscompoundedbytheinteractionofcausesandeffects.

Thefigureonthenextpagewasdevelopedforthisbooklettoshowthecomplexandoverlappingfactorsthatcontributetopoverty,whichwillbeexploredfurtherinthefollowingpages.

4

&

&

society

systems

community &

individual &

factors that contribute to poverty

5

poverty exists becuase...

&

TDBankhasdevelopedanindexthatmeasuresthefinancialvulnerabilityof Canadians. It suggests that Alberta is the second most vulnerableprovinceafterBritishColumbia.Onaverage,Albertanshavemoredebtthan incomewith adebt-to-income ratioof 143%, compared to127%nationally.2Thelikelihoodofdefaultingonaloanincreasessignificantlyonceyou’respending40%+ofyourincomepayingbackloans.InAlberta,8.4%havereachedthatmarkorareaboveitcomparedtojust3.8%in2007, showing that Albertans are increasingly vulnerable to financialcrisesandpoverty.2

fastfactA 2009 survey of 3000Calgarians foundthat53% were concerned about not saving enough money forthe future and 41% were concerned about having too much debt.3

6

“Lack of incomemeans you don’t get by;lackofassetsmeansyoudon’tgetahead”

– Ray Boshara, The New America Foundation

Withoutopportunitiestodevelopcapacitywithineachareabelow,vulnerabilitytofinancialinstabilityandpovertyincreases.1

Basic Needs:housing,food,clothingandtransportation

Education and Skills:skills,knowledgeandexperiences

Personal Attributes:physicalandmentalwellness,selfworthandconfidence

Financial Stability:income,savingsandothermonetaryconsiderations

Social Relationships:socialnetworksandrelationships

poverty exists because...of personal

vulnerability

&

In addition, the quality of services in afamily’s surroundings impacts their well-being and resiliency. For example, if theonly financial institution in proximity isa quick loan company with high interestrates,thiscanleadtohigherfeesandmorelimitedservicethanabank.

In Alberta, research has indicated thatcommunity and school environmentshave significant impacts on the health andachievementoutcomesofschool-ageyouth,where higher income neighborhoods havegreaterpositiveimpactsforbothchildrenandadolescents.4Poorachievementinschoolcanleadtopooremploymentopportunities,andtothecontinuedcycleofpoverty.

7

poverty exists because...place matters

The resources a family has access to largely dependon the cityand neighbourhood they live in. The accessibility and proximityof services like banks, public transportation, grocery stores, andof amenities such as parks, recreation facilities, and librariescontributestothewellbeingofindividualsandfamilies.

Proximityreducesthecostandtimeoftravelling,navigating,andlearningaboutwhatisavailable.

Accessibilityincreasesthelikelihoodthatafamilywillbeabletotapintotheopportunitiesprovidedbytheseservicesandamenities.

INCOMELEVELSVSINCOMENEEDEDFORHOUSINg,yEARLy5

8

Systems in our society exist to support andcontribute to thriving communities. yet theydon’t always end up supporting the mostvulnerable who face barriers to accessingopportunities.

Markets and government initiatives directlyaffectpeople’sriskofexperiencingpoverty,andtheirabilitytomoveoutofit.Marketsgoupanddown.Localindustriesblossomandcrash.Thenumberofjobsavailable,alongwithwageratesand skills required are in constant flux. Lowwages leavemanyCalgarians living in povertydespiteworkingfull-time.

Social supports currently tend to focus onalleviating some of the impacts of poverty.Theseminimalsupportsoftenfailtohelppeopleactuallymoveoutofpovertyorpreventpovertyfromoccurringinthefirstplace.Thisapproachbecomesexpensive,andultimatelyineffective.

The graph to the left compares the annualincome needed for an apartment in Calgary(bachelor and one-bedroom) to variousincomelevels.

poverty exists because...of imperfect

systems

However,wedo know that certain demographic groups are over-represented among those living in poverty, such aspeople with disabilities, recent immigrants, Aboriginal peoples, visible minorities, lone-parents, and women (thesedemographicgroupsarediscussedfurtherinthisseriesinWho Does Poverty Affect?).Whileitisdifficulttountanglethemfromotherfactors,weknowthatexclusionanddiscriminationareoftenatplaywhenwelookatwhythesegroupsareover-represented.Forexample,arecentstudyontheracializationofpovertyinCalgarypointedtopatternsofdifferentialtreatment,occupationalsegregationinthelabourmarket,anddiscriminatorygovernmentalandinstitutionalpoliciesandpractices.ThesepatternscreatebarriersforCalgarianswhoarevisibleminoritiestryingtomoveoutofpoverty.7

“yes,thereislotsofwork.Butthereisalsolotsofdiscrimination.Ifyouarenative,oruneducatedorhaveamentalillness,youcan’tgethired.Ifemployersweremoreaccommodating,wecouldwork.Butwearejudgedbyourappearance.Weneedtheopportunitytoproveourselves.Employerswantyoutodressacertainway,buthowcanyouwithnomoney.I’vegonetotheplaceswheretheygiveyoufreeclothes,buttheclothesareneveruptothestandardthatemployersdemand.”

– PovertyTALKS! Member

9

We often don’t realize how some people areexcludedfromtheopportunitiesandresourcesothers take for granted. The ways in whichsocietalnorms,attitudes, valuesandpracticesexclude certain groups can be subtle anddifficulttopindown.

poverty exists because...some people are excluded

It is clear that the reasonswhy poverty existsarecomplex.Rootcausesofpovertystemfrommultiple factors, meaning there are no easysolutions,butthemoreweunderstandpoverty,themorelikelywearetoknowhowtoreduceit.

Calgaryisadynamiccitywithastrongeconomyandwearewell-positionedtoreducepovertyinour communities.given thenegative impact ithasonindividuals,communities,andCalgaryasawhole,wecannotafford to ignore it. Luckily,withconcertedeffort,povertycanbereduced.How is Poverty Reduced?inthisseries,addressessolutionstopovertyinmoredetail.

Tofindoutmore,readthroughWhat is Poverty? andWho is Affected by Poverty?

10

why doespoverty exist

reference list:

1. SwedishInternationalDevelopmentCooperativeAgency.(2001).the Sustainable Livelihood Approach to Poverty Reduction.Stockholm:L.Krantz.

2. TDEconomics.(2011,February9).Special Report.Retreivedfrom:http://www.td.com/document/PDF/economics/special/td-economics-special-db0211-householddebt.pdf

3. UnitedWayandTheCityofCalgary.(2011).Signpost II: A Survey of the Social Issues and Needs of Calgarians.Calgary:gossgilroyInc.

4. AlbertaCoalitionforHealthySchoolCommunities.(2006).Socioeconomic Disadvantage: Health and Education Outcomes for School-Aged Children and Youth.Alberta,Canada:TkMC

5. ThistablewascreatedusingIncomeSupportlevelsfromtheNationalCouncilofWelfare,Low-IncomeCut-OffbeforetaxfromStatisticsCanada,andCoreNeedsIncomeThresholdfromHousingandUrbanAffairs.

6. EffectiveApril1,2012,AISHwillincreaseto$19,056peryear.7. CityofCalgary,CommunityandNeighbourhoodServices.(2009)

Inequality in Calgary: The Racialization of Poverty.Calgary:V.J.Pruegger,D.Cook,andS.Richter-Salomons.

resources for engaging on poverty issues:the city of calgaryunited way of calgary and areavibrant communities calgarycalgary poverty reduction initiativeaction to end poverty in albertapovertytalks!canada without povertynational council on welfarecanadian council on social development

“A rundown apartment can exacerbate a child’s asthma,whichleads toacall foranambulance,whichgeneratesamedicalbillthatcannotbepaid,whichruinsacreditrecord,whichhikestheinterest rate on an auto loan, which forces the purchase of anunreliableusedcar,which jeopardizesamother’spunctualityatwork, which limits her promotions and earning capacity, whichconfineshertopoorhousing.”

– David K. Shipler

W H Y D O E S P O V E R T Y E X I S T ? S P R I N G 2 0 1 2