Welfare systems exist in every country in the world. These systems were born through the political activism of individuals and workers unions around the world to provide a safety net against the merciless grinding of the labor market. The purpose of the welfare system, in theory, is to provide the means of basic sustenance to families and individuals who cannot support themselves above the minimum standards of living.
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The main reasons for receiving support usually include disabilities, the lack of employment or low wages, and children. There are numerous welfare programs in Canada, the main one being the EIA system, which provides social assistance, employment assistance, and tax refunds to families and individuals that fall under a list of criteria that makes them eligible for receiving welfare assistance.
In Manitoba, the EIA supports thousands of people every year, with over 56,000 recipients as of 2008-2009 (Manitoba Ombudsman 16). Many of these people also receive support from other government and non-profit organizations. However, the opposition to extensive EIA support states that the amount of assistance received from welfare programs does not motivate the recipients to become independent and seek employment, as the EIA provides for their every need.
Finding a balance between stimulating independence and providing people with necessities has always been an issue related to welfare. The purpose of this paper is to analyze Manitoba’s assistance acts and regulations, as well as the EIA rate reviews, to understand if the EIA program provides for the recipients’ basic needs while adequately stimulating an attachment to the labor force.
Manitoba Assistance Act and Regulation
According to the Employment and Income Assistance Act points 18(1) and 18(2), anyone may apply for the income assistance or general assistance program as prescribed by the EIA mandate (Manitoba Ombudsman 29). However, after an investigation to determine the eligibility of the candidates for receiving income assistance, only the following categories of citizens could be deemed qualified (Manitoba Ombudsman 17):
- Individuals incapacitated for a period longer than 90 days by a physical or mental disability.
- Individuals that cannot earn enough to care for themselves and members of their families.
- Individuals that require care from others.
- Single parents.
Under the Employment and Income Assistance regulation act, all candidates for receiving aid must supply the required information that would enable the director to calculate the financial resources currently available to the applicant’s household, as well as the costs for necessities, which include medical supplies, nourishment, transportation, rent, and social services (Manitoba Ombudsman 29).
According to the Manitoba Employment and Assistance act, an average welfare check for a single, childless adult seeking work is circa 550 dollars, from which 285 dollars are allocated towards rent, 195 dollars for necessities, 25 dollars – Job Seeker’s Allowance, 50 dollars – Manitoba Shelter Benefit. For a single and childless adult with a disability, this sum is increased to 750 dollars, with increased payments in necessities, as well as an additional payment of 105 dollars for the Disability Benefit (Manitoba Ombudsman 17).
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As it is possible to see, both sums are relatively small and do not cover the entirety of expenditures necessary for facilitating a basic minimum level of life. As it stands, the average rent for Manitoba ranges from 580 to 610 dollars a month, meaning that it consumes the majority of the funds received via the EIA program, if not all of them, forcing the participants to find additional help in other sources, should they be unable to find a job. While such an approach motivates the unemployed to actively seek out places of employment, it does not provide enough supplements to the people who, for legitimate reasons, cannot find employment.
EIA Rate Review
A common way of estimating whether the current EIA assistance rates provided by the Manitoba government cover the basic needs of the poor, unemployed, and disabled, is the Market Basket rating. This rating calculates the general cost of services and goods required to maintain a modest, but acceptable standard of living. It includes the costs of food, transportation, clothes, as well as various other services that an average person or a family requires to sustain itself (Tweddle et al. 42).
According to the Canadian Social Report of 2015, the current rates of EIA support do not cover the entirety of the yearly estimated Market Basket expenses. The total welfare income for a single employable adult is 8,331 dollars per year, while the estimated MBM per year is at 18,051 dollars (Tweddle et al. 43). The poverty gap, which is calculated by deducting the MBM rate from the total welfare income, is at -9,720 dollars per year, which constitutes for a 53.8 percent deficiency (Tweddle et al. 43).
It is assumed that a single employable adult is supposed to find a place of employment that would earn him at least as much per year, to make up for the deficiency. However, in case they are unable to find a suitable full-time job, or if the job they find cannot earn them more than 9,720 dollars a year, they remain in a deficit, and thus below the expected average quality of life. The situation is slightly better for the disabled, single parents, and couples, as they receive more ample welfare support.
However, the poverty gap for them does not decrease by a large margin because the disabled, as well as single parents and unemployed couples with children, require more expenditures. The poverty gap for one person with a disability is at -7,111 dollars, -8,426 dollars for a single parent, and -11,384 dollars for a couple with children (Tweddle et al. 43). These numbers correlate with the LICO charts, which stand for low-income cutoffs, and calculate the average amount of money spent on three necessities, leaving less money for everything else.
According to the Welfare income in percentage to LICO table, Welfare makes up for 40.9 percent of LICO for a single employable adult, 53.8 percent for a single person with disabilities, 68.9 percent for a single parent with a child, and 64.1 percent for an unemployed couple with children (Tweddle et al. 41). These two factors demonstrate clearly that welfare, even at its maximum for unemployed families with children, does not cover all of the necessities required.
Basic Needs versus Attachment to the Labor Force
The problem of balancing the necessities versus the attachment to the labor force lies not in the so-called desire to ‘live without working.’ As it is obvious to see from the previous section, welfare does not cover all of the necessities, barely managing to go above 50 percent of the Market Basket. Therefore, there is no shortage of motivation for the recipients to seek out a job. This tendency can be seen not only in Manitoba but also in other regions.
The problem lies in the fact that Canada, like many post-industrialization nations, suffers from the employment hourglass. Its labor market consists of a multitude of low-paying jobs that require no education or skill, and an upper echelon of high-paying technical and administrative positions that require skill, experience, and education. The middle-range employment, which theoretically should provide soil for middle-class growth, is practically non-existent.
This contributes to Canada’s leading positions in poverty rates among the wealthy western countries, with a roughly 9 percent of the population living below the poverty line, and requiring welfare (“People in Low Income after Tax”). At the same time, Canada’s unemployment rate is below 5 percent, which is relatively low (Brandon 5). What does it mean for the EIA policies? It means that the underwhelming welfare provided by the EIA is forcing individuals to seek employment in a labor market that cannot provide ample employment opportunities.
Many of the individuals receiving welfare are doing so because they cannot find higher-paying workplaces, and a good portion is employed temporary or not working full-hours, which in turn, forces the employed individuals to seek welfare (Brandon 7). Based on these observations, the conclusion is that the EIA policies are failing in both providing the necessities for the citizens of Manitoba and Canada in general, while at the same time not succeeding in making people support themselves due to the inefficiencies of the Canadian labor market.
Brandon, Josh. Basic Income and EIA: Sidestepping the “Welfare Wall”. Web.
Manitoba Ombudsman. Report on Manitoba’s Employment and Income Assistance Program. 2010. Web.
“Persons in Low Income after Tax.” Statistics Canada. 2013. Web.
Tweddle, Anne, et al. Welfare in Canada, 2015. 2015. Web.