What do we mean by absolute and relative measures of poverty
The distinction between 'absolute' and 'relative' measures of poverty is not as clear
as you might think. Even so called 'absolute' measures like the Fraser Insititue 'Basic Needs' line
and HRDC's proposed MBM measure are higher than what they would have been 100 years ago and are
higher than they would be in Haiti (for example).
Proponents of these absolute measures acknowledge that they would need to be adjusted every 5 or 10 years to
reflect general living standards.
Relative measures like the Low-Income Measure (LIM), which is basically half of median family income, directly
compare low-income Canadians to the norm (as represented by the median). Every year changes in the median income
will change the poverty line.
The real distinction between absolute and relative measures is whether poverty line adjustments due to
changes in general living standards will be automatic (as they are with relative measures) or discretionary
(as they would be with the MBM of poverty).
MBM acquiesces to Social Exclusion
"4. More generally, it is designed to be sensitive to the changing consumption opportunities of those at the lower end of the income scale, not to what is happening to general living or consumption standards."
Source: HRDC Source Document
Thus HRDC acknowledges that the MBM reflects a form of 'social exclusion'; what's
good enough for the poor does not depend on what valued Canadians take for granted.
HRDC Acknowledges that the provincial ministers of social services will have the final say over the contents the MBM
"However, any change recommended would have to be approved by the Federal/Provincial/ Territorial Ministers responsible for Social Services, for whom the measure was originally developed, before being implemented by Statistics Canada."
Thus HRDC acknowledges that social services ministers will control the contents
of the 'basket'. Since they also control welfare benefit levels they will control how those welfare
benefit levels compare to 'their' poverty line.
Fraser Institute on MBM
What the Fraser Insititute has said about getting governments to develop a new measure of poverty…
"This is the single, biggest lobbying victory for the right wing since the 1960s because when it comes to government, the government is now understand that small is beautiful."
Source: Interview for CBC Radio - Ideas
The Trouble with Poverty
Are LICO's flawed or too high?
"Alberta Social Services Minister Stockwell Day also believes the LICO-inspired poverty are greatly exaggerated - and his opinion is important. Mr. Day is chairing a notional council of provincial minister negotiating new spending arrangements with Ottawa in areas of shared jurisdiction. As part of that work, the social services ministers met in Toronto last Monday with Human Resources Minister Pierre Pettigrew to hammer out a new child tax benefit for lower-income families.
Mr. Day reports success on two fronts. Provinces conceded to Ottawa its desire for more spending on child benefits. But Mr. Day also got the ministers to agree that Canada needs a better working definition of what constitutes poverty."
Source: Alberta Report - January 27, 1997