How we label and treat our poor defines us as a nation and people

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As the current parliament winds down before the expected election call, it is worth noting a major achievement that came to nothing. The achievement was NDP member Tony Martin drawing upon a House of Commons report on poverty reduction to offer legislation that would bring all Canadians up to the low income cutoff level as measured by Statistics Canada. His bill C-545 An Act to Eliminate Poverty in Canada came to nothing because the Conservatives managed to scupper plans to enact the legislation.

While Tony Martin seeks re-election, his poverty elimination strategy will still be there when the next parliament resumes. In the meantime, it is worth reflecting further on what it means to be poor, as a prelude to focusing attention on what can be done about it by the next parliament.

When we think of rich and poor in Canada, it is assumed we are talking about relatively small numbers of people at either end of a broad scale. Certainly the wealthy can be thought of as the top 10 per cent of income earners, or even the top one per cent.

In major studies that have generated worldwide interest in poverty, inequality, and income disparity, two French economists, Thomas Piketty and Emmanuel Saez showed how wealth holdings have influenced U.S. inequality: the top 10 per cent of income earners managed to capture one-half of all additional American income earned in the period from 1976 to 2007. Follow-up research showed how the top one per cent -- within the top one per cent -- captured significant amounts of all income gains. 

Using a unique interactive website Piketty and Saez (with co-author Camille Landais) have launched an examination of how the French taxation system contributes to inequality. Their joint book Pour une révolution fiscale begins with a portrait of French society that should lead Canadians to rethink how poverty, and inequality are linked.

The French, unlike Canadians, have legislated a social minimum, so that no one must live below destitution. Canada once had such a minimum, guaranteed by the Canada Assistance Program, federal legislation (proposed by Liberal Minister of Health and Welfare Paul Martin Sr.) enacted in 1965, and abolished by the 1995 Liberal budget introduced by Paul Martin Jr.

When Landais, Piketty, and Saez profile French income earners, they see three groupings: the top 10 per cent, the middle class, and the poor. For these thinkers, the poor constitute all those who fall below the median income enjoyed by a French citizen (about 33,000 Euros). By their definition this places 50 per cent of the population in the "poorest" category. The middle class are the 40 per cent in between rich and poor.

Income, before taxes and before transfer payments (pensions, welfare, or E.I.) is generated either by work or comes from property ownership (capital). However unequal salary, and wage income may be, income from capital is more so. In France about 25 per cent of all income is attributable to property ownership, and the top 10 per cent have over 60 per cent of that income.

In Canada the debate around poverty needs to take into account the inequalities generated across society by the concentration of ownership of property among a small percentage of the population. Traditionally, poverty in Canada is equated with the low income cutoffs compiled by Statistics Canada. By these measures, about 15 per cent of Canadians would be considered poor. What has not been examined is how those Canadians earning less than the median income -- 50 per cent of the population -- have to be considered as poor. Employment income alone often leaves people struggling to make ends meet, and unable to live according to the "custom of the country" in the language used in the late 18th century by Adam Smith to describe poverty.

The French economists research shows that those who have little or no access to income from capital suffer in comparison with those who do have such access. This has major implications for how Canadians think about what it means to be poor. The poor among us are far more numerous than reliance on low income statistics would lead us to believe.

Duncan Cameron writes weekly on politics and is president of rabble.ca.

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