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  1. Genuine Progress Index for Atlantic CanadaIndice de progrès véritable - AtlantiqueSOCIAL EXCLUSION & INCLUSIONin PRINCE EDWARD ISLANDCharlottetown, 21 February, 2003 Prepared for:

  2. Inter-generational social inclusion: What kind of world are we leaving our children?

  3. Brundtland Commission's seminal definition • “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs....[This] implies a concern for social equity between generations, a concern that must logically be extended to equity withineach generation.” • World Commission on Environment and Development (Brundtland Commission), 1987. Our Common Future, Oxford University Press, New York.

  4. Statistics Canada: • “A consensus has emerged that sustainable development refers at once to economic, social and environmental needs.... A clear social objective that falls out of the definition (of sustainable development) is that of equity, both among members of the present generation and between the present and future generations….” Statistics Canada, Econnections 1997

  5. What kind of world are we leaving our children? Canada’s premier quality of life, Nova Scotia’s QOL More possessions, longer lives But, some disturbing signs

  6. Warning Signals: Higher stress rates, obesity, childhood asthma Insecurity - job, debt, safety Greater inequality and more child poverty Decline of volunteerism Natural resource depletion, species loss Global warming

  7. Sending the Wrong Messages Growth stats= more is better • But anything (crime, sickness, pollution, disasters, resource depletion, stress) can make economy grow - better off? • GDP can grow as poverty, inequality grow • Ignores work that contributes directly to wellbeing (volunteers, work in home).

  8. Indicators are Powerful What we measure: • reflects what we value as a society; • determines policy agenda; • influences behaviour (eg students) We need measures of progress that count vital social assets like health, equity

  9. Valuing Equity: TrendsAverage Disposable Household Income, 1980-98

  10. PEI most equitable province • Lowest rates of low income for men (7.6%), women (8.3%), and children(6.6%) in Canada (9.9%, 11.9%, 12.5% respectively) • PEI has smallest income gap between richest and poorest 20%; and r:p 40%; smallest Gini coefficient (over all incomes) • PEI has smallest gender wage gap (PEI women earn 94.3c to male $1, cf 80.7c Can • PEI single moms = 2nd highest wage in Can

  11. Prevalence of Low income-women and men-1997 & 2000

  12. Income: Female lone-parent families - 1997 & 2000

  13. Income: Gender Wage gap

  14. Change in Wage Gap- 1998-2001- Ratio of Female to MaleHourly wages:

  15. Regional “exclusion”(Mike Harris and the lottery) • Income gap between rich and poor provinces grew in 1990s. • 1990: Atlantic Canadians had 81c for $1 in Ontario. 1998: 75c for $1 in Ontario • But Ontario gain due to $9,400 household gain for richest 20% to $97,170 disposable income. Poor and middle income Ontarians lost real income.

  16. Other Forms of Exclusion • From social benefits: Middle, higher income Canadians get more cash transfers - Transfers to poorest down 15% since 1990. • Gender: Except PEI 20% less per hour; 11-15% less adjusted for 14 factors. More women live below LICO than men. • Single-parent families and children have higher rates of low income.

  17. Clustered disadvantages: “Social exclusion” • Low income, unemployment, illiteracy, health & justice problems.... • Marginalized groups at risk include: Single mothers, children, youth, unemployed, Aboriginals, migrants, minorities, disabled, homeless • Inclusion success 1980s - elderly

  18. HRDC Index of Social Health • 15 components - including trends in poverty, child abuse, infant mortality, teen suicide, drug abuse, high school dropouts, crime, alcohol-related fatalities, affordable housingm etc. • Decline in all provinces since early 1980s: Newfoundland down 5%; NB down 8%; PEI down 15%; NS down 21%

  19. Ignoring social development means the full costs of • ill health • illiteracy • poverty, unemployment • crime …..crowd out investment, and undermine economic development.

  20. Full cost accounting shows: Unemployment, poverty, inequality, poor education bring… • higher stress, risk factors, costs of health care, crime (competing resources) • loss of innovation potential….by waste of precious human assets (C. Leadbetter, et al; Livingstone, 1998)

  21. E.g.: Health costs of poverty and inequality • Low income women 15-39 = 62% more likely to be hospitalized than high income women • Low-income men age 15-39 are 46% more likely to be hospitalized • For age 40-64: men = 57%, women = 92%

  22. ……excess use of physicians • No high school diploma use 49% more physician services than those with BA • Lower income groups use 43% more than higher income; lower middle = 33% more • In NS: excess physician use due to educational inequality = $42.2 M./yr; excess use due to income inequality = $27.5 M./yr = small % total health costs

  23. ……heart health costs • Low income groups have higher risk smoking, obesity, physical inactivity, cardiovascular risk = costly • NS could avoid 200 deaths, $124 million per year if all Nova Scotians were as heart healthy as higher income groups

  24. ……overall health status • Poverty is the most reliable predictor of poor health, premature death, disability • Low income groups are 4x more likely to report fair or poor health = costly

  25. …delayed child development • 31 indicators - as family income falls, children have more health problems, (NLSCY, NPHS, Statistics Canada) • Child poverty -> higher rates respiratory illness, obesity, high blood lead, iron deficiency, FAS, LBW, SIDS, delayed vocabulary development, injury+….

  26. ……health of single mothers • Worse health status than married (NPHS); higher rates chronic illness, disability days, activity restrictions • 3x health care practitioner use for mental, emotional reasons = costly • Long-term single mothers have particularly poor health

  27. Health Cost of Inequality • British Medical Journal: “What matters in determining mortality and health is less the overall wealth of the society and more how evenly wealth is distributed. The more equally wealth is distributed, the better the health of that society.”

  28. Socioeconomic determinants & costs of crime... • 42% NS prison inmates have less than Grade 10 education (cf 19% population) • Aboriginals jailed at 4 times pop. rate • 67% unemployed at time of admission (=5x population rate) = Costly: • $44,165 inmate/year; cf 3-year university tuition, room, board = $35,000

  29. Crime and UnemploymentRobberies, Canada and Nova Scotia, 1962 – 1997(per 100,000 pop)

  30. Robbery and the Unemployment rate (1962 – 1997Average Rates by Decade)

  31. Social Inclusion is Cost-Effective -> Savings • High rates of health service, justice usage are costly to taxpayers. • Reducing poverty among most vulnerable groups = cost savings to health care system • Single mothers, minorities, etc - highest poverty rates; so adequate social supports for these groups highly cost-effective

  32. Promoting Social Inclusion eg: GPI CAP-Site Survey: • Strengthening communities, enhancing communication, reducing isolation • Promoting equity through access to disadvantaged groups • Youth-senior interaction and learning • Employment, education, training opportunities

  33. Social Inclusion in Policy • Eg2: ACOA seminar (Feb) and principles: CED, loan provision, entrepreneurship, are “inclusive” by nature; support for FRAM, BBI, ABSN, CEED, Women in Business, Youth Entrepreneurs, etc. • Social Inclusion initiatives “feel” right, but do they help economic development?

  34. Social Strengths are Economic Strengths • Retention of knowledge-based industry skilled employees requires focus on Quality of Life. • Industry ranks QOL factors: 1st Low crime rate 2nd Health facilities 3rd Housing costs 4th Housing availability 5th Public school rating (Area Development Magazine - 2001 Corporate Surveys)

  35. Atlantic Canada’s Social Capital Advantage e.g.:Serious Violent Crimes, NS, Canada, USA, 93-97

  36. Social Capital is Valuable • PEI volunteer service hours per capita = highest in Canada (53.3 hours cf 34.2 in Can.) • Provides valuable training; saves government expense; helps school-to-work transition • Declined by 6.3% in Canada 1997-2000 in hours per capita, increased by 50% in PEI (largest increase in country)

  37. Social Supports:Volunteerism - a saving grace • Health Canada uses volunteerism as a key indicator of a “supportive social environment” that can enhance health. • All four Atlantic provinces = highest rates of volunteer work in the country. • More women than men volunteer • Across Canada (except PEI), volunteerism rests on narrower, more fragile base - fewer volunteers - longer hours

  38. Volunteerism: Atlantic Provinces lead (formal rate)

  39. But volunteerism has declined nationally

  40. Income Distribution, Intellectual Capital, and Economic Growth • Evidence shows greater equality of income brings positive effect on economic growth. Contrasts with old theory of Efficiency/ Equity tradeoff. • “Policies that re-distribute income so poor children get post-secondary education ... have proven to be growth enhancing.” A. Sharpe, 2001 • Children deprived in first 3 years of life suffer permanent negative consequences. (Mustard, Sharpe, et al)

  41. Income distribution and innovation. • “High levels of productivity and per capita output are consistent with low levels of income inequality.”Altman, 2001 • “Raising the human capital of those at the top of the skill base at the expense of those at the bottom reduces profitability when implementing new technologies”. -H. Lloyd -Ellis, 2001 • Distribution of human capital investment across all skill levels supports invention, adoption, and implementation of technology.

  42. Netherlands /Canada • Netherlands: 1,370 paid work hours / year Canada: 1,732 paid work hours / year • Netherlands: Part-time law: equal hourly pay, pro-rated benefits, equal promotion opportunity • Netherlands: unemployment 12.2% —> 2.7% * Highest rate of part-time in OECD * Involuntary part-time = 6% = 1/6 Atlantic rate * High hourly productivity

  43. Work Sharing: alternative to layoffs in tough times • Direct cost savings through reduced EI, SA, severance payments, maintaining tax base • Indirect savings - lower health, social costs • Retains valuable workplace skills • Reduces stress, improves work-life-family balance

  44. To Integrate Social and Economic Development Policy… • Measure full cost and value of both, account for depreciation of human and social capital, assess needs for reinvestment (vs label as cost) • Equity, inclusion as explicit goal, assigned portfolio, responsibility • = Economic advantage, NS strength