Consequences of poverty cost Niagara $1.38 billion a year: policy brief

A Niagara Community Observatory report has found that poverty costs $1.36 billion a year.

A Niagara Community Observatory report has found that poverty costs $1.36 billion a year.

Everyone knows that living in poverty hurts the people directly affected. But a new economic analysis shows that the consequences of poverty are hurting everyone in Niagara – to the tune of $1.38 billion each year in lost productivity, disproportionate health care expenses, and other direct and indirect costs.

“Are the Consequences of Poverty Holding Niagara Back?” is a new policy brief prepared by the Niagara Community Observatory in collaboration with the Niagara Research and Planning Council and the Niagara Workforce Planning Board. The policy brief forms the basis for an investment strategy to boost Niagara’s economy, by reducing the cost of the consequences of poverty.

“By looking at poverty in Niagara through a new lens – one of creating an investment model to help reduce the costs of the consequences of poverty – we could boost our local economy substantially,” says David Siegel, director of the Niagara Community Observatory at Brock University.

The $1.38 billion-a-year price tag takes into account three types of costs:

* transfers, or $439 million of direct funding for social support programs such as Employment Insurance or Ontario Works;
* private costs, estimated to be $662 million borne by people living in poverty mainly in lost productivity; and
* social costs of $277.7 million for society to pay for services, such as health care.

The report further illustrates social cost. Inadequate nutrition, the unaffordability of prescriptions and dental care, and high stress levels that many people living in poverty experience have led to the poorest 20 per cent of the population using a disproportionately higher proportion of health-care services compared to people in higher income brackets.

The report notes that with the $277.7 million currently being spent on the social costs of poverty, Niagara could construct a hospital every two years, build 1,200 new houses or buy 648 public transit buses, build 17 new retirement homes or employ 5,000 people per year (with a yearly salary of $55,000).

“The roots of the consequences of poverty are multi-faceted and complex,” says the policy brief. “Thus, the investment strategy that we undertake in Niagara will require acknowledgement that it, too, will be multi-faceted and complex. It will require Niagara-wide cooperation, leadership, and innovation to achieve our collective return on investment.”

The policy brief was launched on Sept. 26. It forms the basis for Niagara-wide economic and community service partners to create an innovative investment strategy to both reduce the consequences of poverty, and build a stronger future for Niagara.

Read the policy brief online.

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