COVID-19 is not the great leveller, it’s the great revealer

Source: https://twitter.com/stphnmaher/status/1249767849352101890?s=20

In a medical sense, COVID-19, as highly contagious as it is, can be thought of as the great leveller. No one has immunity, and we face the health risk of this virus with a sense of our common humanity.

But in a socio-economic sense, it is not as contagious. The jobs some of us hold give us an economic immunity, and we face the economic risk of this virus with a very different sense of our interconnectedness.

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Canada’s unemployment rate will likely double to 10%, and that’s an understatement

Normally, I don’t venture into to predicting month-to-month changes in the unemployment rate, but this month is an exception for two reasons. The changes are certainly going to go well beyond the statistical noise inherent in the Statistics Canada survey, so there is no chance that the picture will be clouded. And history really isn’t a guide to what is coming next (in the very short term), so sophisticated models based on past data don’t have a particular advantage. My bets are on an almost doubling of the Canadian unemployment rate between February and March, with even this being an understatement because the official survey preceded some of the more dramatic shutdowns that happened later in the month. I’m suggesting that we are even probably close to 15% right now.

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What you need to know about Statistics Canada’s survey of the labour market

On Thursday, April 9th Statistics Canada will release the results of the Labour Force Survey for the month of March 2020. COVID19 makes this one of the most scrutinized releases in the 75 year history of the survey, reporting as it will on jobs and unemployment during the week of March 15th to March 21st. Here’s what you need to know, and what to look for.

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Here’s a policy-relevant way to set the poverty line

Angus Deaton, the Princeton University economist, wrote in the opening paragraph of his acceptance speech for the 2015 Nobel Prize in economics that:

Measurement, even without understanding of mechanisms, can be of great importance in and of itself—policy change is frequently based on it—and is necessary if not sufficient for any reasoned assessment of policies, including the many that are advocated for the reduction of national or global poverty. We are wise to remember the importance of good data, and not to neglect the challenges that measurement continuously poses (Deaton 2016, page 1221).

This nicely sums up the tone of a previous post, that a conversation about Canadian public policy directed to poverty has not been well served by the confusing and conflicting information provided by official statistics.

Just how should we measure poverty in a way that is most helpful for public policy?

This is a particularly important issue given the mandate the Prime Minister has given his Minister of Families, Children and Social Development, directing him to “Lead the development of a Canadian Poverty Reduction Strategy that would set targets to reduce poverty and measure and publicly report on our progress.

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Understanding what poverty means and how it is measured are the first steps toward a poverty reduction strategy

Poverty rates in Canada LICO and LIM
Two most commonly used Statistics Canada poverty rates show radically different patterns.

The two most commonly used poverty rates produced by Statistics Canada tell very different stories. The patterns are curious, and confusing. The two statistics—the poverty rate according to the Low Income Cut-off and that according to the Low Income Measure—track each other rather closely up to the early 1990s, then diverge quite markedly as the Low Income Cut-off falls steadily to an unprecedented low, while the Low Income Measure drifts upward. Which statistic should we believe?

The cyclical patterns also differ, with the Low Income Measure registering higher poverty during recessions only before the 1990s, and in a way that is more muted and lagging the movement in the Low Income Cut-off. It also signals a rise in poverty only well after the onset of the 1990/92 recession, and both measures show no upturn in poverty during the Great Recession, which began in 2008 and led to a significant fall in employment.

For something that is central to so many policy debates, the Canadian “poverty” rate is notoriously confusing, and it is easy to imagine that public policy may be misled. The first step in devising a poverty reduction strategy is understanding what these numbers mean, and whether they are useful. Is poverty at unprecedented lows, or has it been stuck at high levels for decades? Both views can’t be right, but they can both be wrong.

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Long live the mandatory census! or maybe not?

[This post is based on my comments at “Celebrating the Census,”  a panel discussion organized by the McGill University Centre on Population Dynamics held in Montreal on April 29th, 2016. Other members of the panel were Jean-Yves Duclos, Sebastien Breau, Ian Culbert, Ariane Krol, Mary Jo Hoeksema, and the moderator Celine LeBourdais.]

The Census is built block-face by block-face. It is built sub-division by sub-division. Village, township, city, municipality, it is built until the entire country is perfectly and completely tiled.

The Census is a machine, complicated and intricate. And the public servants working at Statistics Canada should be rightly proud of the hard work and dedication devoted to the development, maintenance, and management of this machine. Even the most jaundiced among us, regardless of political persuasion, should recognize and acknowledge this accomplishment.

RH Coast looking north over Jean Talon S0001
The Jean Talon building, in the bottom right, was originally called the “Census Building.” Photograph by Philip Smith.

The value of this machine is that it lets us see ourselves in detail more precise than any other mirror, and the return of a mandatory long form, in which Canadians are required to offer up a description of some of the most private aspects of their lives, is hailed by many as a major turn in public policy that will allow this picture to stay clearly focused.

But the Census is more than a machine. Jean Talon knew that. The very first Census he conducted, beginning in the later part of 1666, was clearly an act of nation building. He used it to help him, and France, develop and build a viable colony extending from the shores of the Saint Lawrence River, transforming the countryside into a prosperous agricultural region that would prepare the way for waves and waves of more immigrants. The Census is an act of political imagination.

And the public servants who work at Statistics Canada are not well placed to exercise that imagination, even if at times what they do in managing the machine casts them in that role.

There is still much to be done for Canadians to accept and appreciate the benefits of the Census, and for the federal government to give them ownership of the results. The Census is mandatory—by law it must be filled out—but we should strive to think of it as voluntary, our participation to be both exercised and celebrated as an act of citizenship in a way that fosters each Canadian’s political imagination.

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