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poverty

After Cold Lake soldier caught busking to make ends meet, viability of military pay in booming ‘little Fort McMurray’ called into question

Lower ranked soldiers struggle to pay rent in Cold Lake

“A lot of oil patch people will call Cold Lake ‘little Fort McMurray,’” said the town’s mayor, Craig Copeland.

“Rent in Cold Lake has gone up from five years ago. You used to be able to get a two-bedroom apartment around $1,000 to $1,200 a month and now, because of the latest boom in the oil patch, in the last year and a half or so … rent has really shot up. Now two-bedroom apartments, good ones, are going for between $1,800 to $2,200.”

About a decade ago, the military stopped subsidizing its on-base housing. Instead, they began to charge the local market rate for rents. In order to maintain a “nationally consistent process,” the military calculates the rents in Ottawa using Canadian Mortgage Housing Corporation data.

That process isn’t forgiving to soldiers who live in remote towns struck by oil wealth.

“A normal person would look at this story, see a house built in the ‘50s and ask ‘Why in the world are you charging market rate rents for these people? They work for you? Why do we need to gouge them on the rent?’” said the mayor.

Fearing backlash, few soldiers were willing to speak candidly about the situation. Christine, a soldier’s wife with three young children, said even spouses are too concerned to complain publicly.

“We get crap living conditions,” she said. “Every year my husband gets a raise and our rent goes up. It doesn’t matter.”

After almost two years on the base, she said her husband’s paycheque of about $58,000 is not covering basic expenses.

“Our paycheques do not pay our day-to-day living. We were very lucky in the sense that when we came here, we had money saved up, but that’s all dwindled and we’ve been pulling out of our house-savings fund,” she said.

“There are no extra-curricular activities for the kids, we didn’t have birthday parties for the kids this year, we can’t afford it. Our quality of life is shot,” she said.

The mayor estimates 30% of the employees at CFB Cold Lake — many of them young soldiers with young families — have taken second jobs, like delivering pizzas.

A July report on economic conditions at the base from the Canadian Forces Ombudsman found 35% of one unit had taken on second jobs.

“It was to make ends meet,” said Alain Gauthier, the director-general of operations at the Ombudsman’s office.

In 2012, the ombudsman held four town hall meetings. He heard from military families who couldn’t pay Internet or phone bills, were dipping into their RRSPs and selling their belongings to cover the skyrocketing costs of rent and goods and services.

The report found that the average rent for a three-bedroom home on the base, $1,032, was about double the cost of identical accommodations in Quebec and Nova Scotia.

To add insult to injury, of the 854 homes on the base, almost 97% of them were listed in either poor or fair condition. The report noted that most of the homes have asbestos in the insulation, and many have problems with the electrical outlets and water lines.

So let me get this straight.  Soldiers in the Canadian Army and Royal Canadian Air Force can be ordered to give up their lives defending our way of life and for the privilege of doing that, they have to live in substandard housing AND take on part time jobs for the right to do so?

The end result?

Unsurprisingly, Cold Lake is registering high release rates as highly skilled soldiers find better-paying work in the labour-starved oil patch right next door.

According to the ombudsman, the release rate in Cold Lake is double the national average. Highly skilled military personnel are leaving their jobs at an alarming rate.

Christine said she had had that very conversation with her husband this week. If it means another three to four years of living in Cold Lake, she said, her family will leave the military.

“We can’t physically survive another three to four years here. We’re getting closer to debt every month and we don’t have snowmobiles or second vehicles. We don’t have anything,” she said.

I am pretty sure this isn’t just a Canadian problem.  Former General Norman Swatzkoff walked about U.S. soldiers in Europe having to use food banks to feed their families (especially when their wives could not work off the base) and substandard military housing has been a problem for years for most armed forces.  Yet it is disappointing that when you see the money that goes into weapons programs that we can’t figure out how to feed our troops and fairly compensate them based on their posting.  On top of that, Canadian soldiers can be punished for having too much debt or declaring bankruptcy.  Putting them into that situation where debt and having to live off of saving is unacceptable.

For the record, I also agree with those voices in the story that say that the soldier should be disciplined for using his helmet and mention himself being in the service while busking.  Mentioning his military service and using military equipment showed very poor judgement.

Poverty’s Toll on Mental Health

This is discouraging

One of the most insidious effects of living in high-poverty, chronically disadvantaged neighborhoods is the severe strain these areas have on residents’ mental and emotional health. New research shows that poverty imposes a psychological burden so great that the poor are left with little mental “bandwidth” with which to perform everyday tasks.

The constant anxiety and stress resulting from witnessing and experiencing trauma and violence in distressed neighborhoods, negotiating the sacrifices and trade-offs caused by food insecurity, living in unstable housing conditions, struggling to pay bills, and dealing with numerous other worries burn up cognitive capacity that could otherwise be used for productive activities like navigating public assistance systems, providing for an entire family on a limited budget, and helping children with schoolwork.

For children, the long-term mental health effects of poverty are even more alarming. In addition to occupying cognitive resources needed for education (arguably the clearest path out of poverty), poverty is toxic to children. Persistent stress and exposure to trauma trigger harmful stress hormones that permanently affect children’s brain development and even their genes. The damage to childhood development is so severe that medical professionals now describe the early effects of poverty as a childhood disease.

Because of the debilitating cognitive effects of poverty on both adults and children, clinical mental health services are a central component of the Urban Institute’s Housing Opportunities and Services Together (HOST) demonstration. HOST is testing an intensive, dual-generation, case management model for children and adults who live in public and mixed-income communities suffering from concentrated poverty, chronic violence, and low levels of trust and social cohesion. HOST’s coordinated and comprehensive place-based intervention aims to stabilize whole families and improve a range of educational, health, and employment outcomes.

Baseline survey data from the first two HOST sites—Chicago’s Altgeld Gardens, a large public housing development that has high rates of crime, and Portland’s mixed-income New Columbia and Humboldt Gardens—clearly illustrate a relationship between distressed neighborhoods and mental health. Rates of elevated worry among HOST adults in both sites are up to six times higher than rates among adults nationwide, and depression among adults in the Portland site is nearly four times more prevalent. Even more disturbing, youth in the Chicago HOST site experience long-term anxiety and worry at levels seven times higher than those of youth nationwide.

In other words for many youth, even if they escape the economic impact of poverty, the mental health part of it remains.

Unaccountable

Because of its persistent inability to tally its accounts, the Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China’s economic output last year.

Reuters journalist Scot J. Paltrow investigates how the US military’s bad accounting not only wastes taxpayers money, but helps ruin the life of ordinary soldiers and veterans.

Aiken, then 30 years old, was in his second month of physical and psychological reconstruction at Fort Bliss in El Paso, Texas, after two tours of combat duty had left him shattered. His war-related afflictions included traumatic brain injury, severe post-traumatic stress disorder (PTSD), abnormal eye movements due to nerve damage, chronic pain, and a hip injury.

But the problem that loomed largest that holiday season was different. Aiken had no money. The Defense Department was withholding big chunks of his pay. It had started that October, when he received $2,337.56, instead of his normal monthly take-home pay of about $3,300. He quickly raised the issue with staff. It only got worse. For all of December, his pay came to $117.99.

All Aiken knew was that the Defense Department was taking back money it claimed he owed. Beyond that, “they couldn’t even tell me what the debts were from,” he says.

At the time, Aiken was living off base with his fiancee, Monica, and her toddler daughter, while sharing custody of his two children with his ex-wife. As their money dwindled, the couple began hitting church-run food pantries. Aiken took out an Army Emergency Relief Loan to cover expenses of their December move into a new apartment. At Christmas, Operation Santa Claus provided the family with presents – one for each child, per the charity’s rules.

Eventually, they began pawning their possessions – jewelry, games, an iPhone, and even the medic bag Aiken used when saving lives in Afghanistan. The couple was desperate from “just not knowing where food’s going to come from,” he says. “They just hit one button and they take your whole paycheck away. And then you have to fight to get the money back.”

Aiken’s injuries made that fight more difficult. He limped from office to office to press his case to an unyielding bureaucracy. With short-term and long-term memory loss, he struggled to keep appointments and remember key dates and events. His PTSD symptoms alienated some staff. “He would have an outburst … (and) they would treat him as if he was like a bad soldier,” says Monica. “They weren’t compassionate.”

They were also wrong. The money the military took back from Aiken resulted from accounting and other errors, and it should have been his to keep. Further, even after Aiken complained, the Defense Department didn’t return the bulk of the money to Aiken until after Reuters inquired about his case.

The Pentagon agency that identified the overpayments, clawed them back and resisted Aiken’s pleas for explanation and redress is the Defense Finance and Accounting Service, or DFAS (pronounced “DEE-fass”). This agency, with headquarters in Indianapolis, Indiana, has roughly 12,000 employees and, after cuts under the federal sequester, a $1.36 billion budget. It is responsible for accurately paying America’s 2.7 million active-duty and Reserve soldiers, sailors, airmen and Marines.

It often fails at that task, a Reuters investigation finds.

A review of individuals’ military pay records, government reports and other documents, along with interviews with dozens of current and former soldiers and other military personnel, confirms Aiken’s case is hardly isolated. Pay errors in the military are widespread. And as Aiken and many other soldiers have found, once mistakes are detected, getting them corrected – or just explained – can test even the most persistent soldiers (see related story).

“Too often, a soldier who has a problem with his or her pay can wait days, weeks or even months to get things sorted out,” Democratic Senator Thomas Carper of Delaware, chairman of the Homeland Security and Governmental Affairs Committee, wrote in an email. “This is simply unacceptable.”

It’s a pretty widespread problem

A review of multiple reports from oversight agencies in recent years shows that the Pentagon also has systematically ignored warnings about its accounting practices. “These types of adjustments, made without supporting documentation … can mask much larger problems in the original accounting data,” the Government Accountability Office, the investigative arm of Congress, said in a December 2011 report.

Plugs also are symptomatic of one very large problem: the Pentagon’s chronic failure to keep track of its money – how much it has, how much it pays out and how much is wasted or stolen.

This is the second installment in a series in which Reuters delves into the Defense Department’s inability to account for itself. The first article examined how the Pentagon’s record-keeping dysfunction results in widespread pay errors that inflict financial hardship on soldiers and sap morale. This account is based on interviews with scores of current and former Defense Department officials, as well as Reuters analyses of Pentagon logistics practices, bookkeeping methods, court cases and reports by federal agencies.

As the use of plugs indicates, pay errors are only a small part of the sums that annually disappear into the vast bureaucracy that manages more than half of all annual government outlays approved by Congress. The Defense Department’s 2012 budget totaled $565.8 billion, more than the annual defense budgets of the 10 next largest military spenders combined, including Russia and China. How much of that money is spent as intended is impossible to determine.

In its investigation, Reuters has found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn’t need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn’t known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies.

The consequences aren’t only financial; bad bookkeeping can affect the nation’s defense. In one example of many, the Army lost track of $5.8 billion of supplies between 2003 and 2011 as it shuffled equipment between reserve and regular units. Affected units “may experience equipment shortages that could hinder their ability to train soldiers and respond to emergencies,” the Pentagon inspector general said in a September 2012 report.

The American military has about 5,000 different accounting programs in use.  Most of them are incompatible.

In a May 2011 speech, then-Secretary of Defense Robert Gates described the Pentagon’s business operations as “an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures, and measure results. … My staff and I learned that it was nearly impossible to get accurate information and answers to questions such as ‘How much money did you spend’ and ‘How many people do you have?’ ”

It gets better

The practical impact of the Pentagon’s accounting dysfunction is evident at the Defense Logistics Agency, which buys, stores and ships much of the Defense Department’s supplies – everything from airplane parts to zippers for uniforms.

It has way too much stuff.

“We have about $14 billion of inventory for lots of reasons, and probably half of that is excess to what we need,” Navy Vice Admiral Mark Harnitchek, the director of the DLA, said at an August 7, 2013, meeting with aviation industry executives, as reported on the agency’s web site.

And the DLA keeps buying more of what it already has too much of. A document the Pentagon supplied to Congress shows that as of Sept. 30, 2012, the DLA and the military services had $733 million worth of supplies and equipment on order that was already stocked in excess amounts on warehouse shelves. That figure was up 21% from $609 million a year earlier. The Defense Department defines “excess inventory” as anything more than a three-year supply.

Consider the “vehicular control arm,” part of the front suspension on the military’s ubiquitous High Mobility Multipurpose Vehicles, or Humvees. As of November 2008, the DLA had 15,000 of the parts in stock, equal to a 14-year supply, according to an April 2013 Pentagon inspector general’s report.

And yet, from 2010 through 2012, the agency bought 7,437 more of them – at prices considerably higher than it paid for the thousands sitting on its shelves. The DLA was making the new purchases as demand plunged by nearly half with the winding down of the Iraq and Afghanistan wars. The inspector general’s report said the DLA’s buyers hadn’t checked current inventory when they signed a contract to acquire more. 

Mind boggling stuff.

Your Brain on Poverty: Why Poor People Seem to Make Bad Decisions

And why their “bad” decisions might be more rational than you’d think.  From a comment on the research from Gawker that kind of sums it all up.

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing? It’s not like the sacrifice will result in improved circumstances; the thing holding me back isn’t that I blow five bucks at Wendy’s. It’s that now that I have proven that I am a Poor Person that is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purchase. I will never have large pleasures to hold on to. There’s a certain pull to live what bits of life you can while there’s money in your pocket, because no matter how responsible you are you will be broke in three days anyway. When you never have enough money it ceases to have meaning. I imagine having a lot of it is the same thing.

Poverty is bleak and cuts off your long-term brain. It’s why you see people with four different babydaddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It’s more basic than food. You go to these people who make you feel lovely for an hour that one time, and that’s all you get. You’re probably not compatible with them for anything long-term, but right this minute they can make you feel powerful and valuable. It does not matter what will happen in a month. Whatever happens in a month is probably going to be just about as indifferent as whatever happened today or last week. None of it matters. We don’t plan long-term because if we do we’ll just get our hearts broken. It’s best not to hope. You just take what you can get as you spot it.

I have written about this before and at the end of the day, this seems to sum it all up better than I ever have.  Make sure you read the entire post at The Atlantic.

You don’t lose the house. The house loses you.

When a Roseanne writer became homeless.

I sent off resumes and scored occasional interviews. But the interviewers mainly wanted to hear Hollywood stories and then said, “Thanks we’ll be in touch.” I don’t blame them. I’d hire the person currently working in the magazine business instead of the guy who had a lot of amusing stories about comedy writing but hadn’t worked in a publishing environment for more than a decade.

By 2008, with the older children off at college or working and my job prospects bleak, Marina and I decided to separate. She moved to San Francisco with our two youngest daughters and settled in temporarily with two of our oldest daughters who worked there. I could no longer even afford to house myself. I found friends to take in my two remaining high schoolers.

And then I became homeless.

Yes, I, David Raether, the smart and funny guy who graduated with honors from college and read thousands of books and played the piano and went to church and won television awards, was homeless.

What happens when you hit bottom? I can tell you one thing: you don’t bounce back. You crawl back, fighting every step of the way. It isn’t a straight arc back up either; there are dozens of setbacks every step of the way. And the place you land isn’t anywhere near where you were when you slipped off the cliff.

In the first days and weeks after I became homeless, I was in a daze, utterly and completely disoriented. I felt like a boxer staggering around the ring after a rapid series of blows I didn’t see coming. It took me several months to figure it all out.

When you become homeless, you face a number of practical issues. In fact, when you are homeless, all you face are practical issues.

Where am I going to sleep tonight?

What supermarket has the best samples today with the most protein in them?

How am I going to deal with rainstorms dumping water into my usual sleeping spot?

I have a job interview; I have clean clothes, but how can I make sure I don’t smell?

These are the issues you deal with on a daily basis. Dreary, boring, painful issues that relate directly to your body. And that’s because homelessness is a dreary, boring, and often painful condition.

Your days are very long. The rhythm of work followed by home is gone. It’s replaced by long stretches of empty time. No company, no conversation, no deadlines, nothing.

Several years earlier, one of my sons played on a mainly Hispanic soccer team in Bell Gardens, a working class Hispanic suburb of Los Angeles. I got to know one of the fathers quite well. He was from Guatemala City.

“What’s Guatemala City like?” I asked him one day.

“The days are very long in Guatemala City,” he said.

That was all he said about his life there. And that would probably be the best description of life as a homeless person. The days are very long.

In my past life, I spent a typical autumn Saturday reading the paper and drinking several pots of coffee while working two or three crossword puzzles. Around 11 a.m., Marina and I would drive one or two or six of the kids to the farmers’ market in the parking lot at Pasadena High School. Then we would return home and I would come up with an interesting set of reasons for not working in the yard while settling down on the couch to watch college football. Several hours later, I’d pour a glass or two of wine as the day turned into night, watch a movie, and settle into bed. Not much of a day, really. But when I think of those days now, they seem like some kind of lost paradise.

A Saturday during my homelessness went like this.

I would wake up around 4 a.m., brush myself off, and wander around the streets for awhile until Starbucks opened. I’d spend what little money I had on coffee and hope someone left a copy of the Los Angeles Times so I could work the crossword puzzle. I’d wait. And wait. At 10 a.m., the Pasadena Central Library opens. I would walk up there and surf job websites and send off some resumes and read articles online during my allotted time until noon, or, if I was lucky, early afternoon.

That was the hard part of the day. I’d be hungry. Really hungry. A week since I had a real meal hungry. I’d walk over to Whole Foods on the Arroyo Parkway, which has good food samples on Saturdays, grab a cart, and pretend to shop. (It always helps to put some items in the cart to look the part.) The fruits are by the door – I’d grab a bunch of orange slices and watermelon chunks. Next I go upstairs to where the muffin bits and cheese chunks are and gorge as subtly as possible. I’d return the unpurchased items to their places in the store and exit.

By then it would be mid-afternoon. I’d dream of lying on a couch in a warm living room, watching college football. Instead I would walk to another public library to access the Internet. As the sun sets, I’d head to a coffeehouse in South Pasadena called Kaldi where I could find someone to talk with. It wasn’t the company of loved ones, but they were decent people who didn’t ask too many questions about my circumstances.

Night. At 8 p.m. I’d return to the Starbucks. I would find discarded copies of the New York Times and start working the crossword puzzle. And that was Saturday.

Sundays were the same, and so were Monday and Tuesday and Wednesday and Thursday and Friday. On public holidays, the libraries closed and I needed to find someplace else to spend my days. Only the rare job interview broke the monotony.

Gradually, however, I adjusted. I accepted that I was not going to have a career anytime soon, but I did need a job. I was not going to own a house, but I did need to find a place to live. I couldn’t cook or afford restaurants, but I did need to eat.

After the first few disorienting weeks of homelessness, I got myself up off the canvas and begin to bob and weave and shake my head. I sniffed the ammonia capsule of reality and realized that I was in the biggest battle of my life.

During the nearly 18 months I spent homeless off and on, and during the ensuing years, I learned that I am more resourceful than I ever imagined, less respectable than I ever figured, and, ultimately, braver and more resilient than I ever dreamed. An important tool in my return to life has been Craigslist. It was through Craigslist that I found odd jobs — gigs, they often are called — doing everything from ghost-writing a memoir for a retired Caltech professor who had aphasia to web content writing jobs to actual real jobs with actual real startups.

Please Donate

A Walmart in Ohio is running a food drive so it’s own employees can have a Thanksgiving dinner.

A Walmart in Ohio is running a food drive so it’s own employees can have a Thanksgiving dinner.

Words escape me right now.

Poverty meet Suburbia

Suburbia, this is poverty.

Poverty has often been considered an inner city problem or a small town and rural problem, but the face of poverty is shifting in America. Communities that were once economically solid are now experiencing rising rates of economic distress.

Alan Berube, senior fellow and deputy director of Brooking’s Metropolitan Program and Peter Edelman, faculty director, Center on Poverty, Inequality, and Public Policy, Georgetown Law School, discussed suburban poverty at APA’s recent Federal Policy & Program Briefing.

Together with coauthor Elizabeth Kneebone, Berube has examined the phenomenon in Confronting Suburban Poverty in America (Brookings Press, 2013).

Peter Edelman has worked in anti-poverty programs and researched this subject for many years. According to Edelman, suburban poverty has been growing gradually, but has accelerated in the early 21st century: “People who once did all right are not doing all right now.”

What makes poverty in the suburbs especially challenging? The concentration of poverty exacerbates the problem and the trend is toward more concentration.

Overall, Edelman said, 15 percent of Americans live in poverty but the in counties south of Washington, D.C., the rate is as much as 28 percent. In addition, the options for commuting to jobs are fewer in many suburbs than in urban areas. Further, the social services to assist people in need may not be well established in suburban communities.

The problem is becoming more complex, therefore the solution has to be to think in terms of a regional economy.

Part of the complexity is that “we have become a nation of low-wage economy” said Edelman. The median income for Americans has been stuck at around $34,000 for 40 years. Many, many Americans are not moving up the ladder and obtaining better pay. And, it is becoming increasingly difficult to sustain a family on this income.

Single mothers with children — the most vulnerable — make up 42 percent of the poor.

Poverty on a private university campus

What’s it like being poor while attending one of the United States most prestigious schools?

When was the first time I felt uncomfortable at Duke because of money? My second day of o-week. My FAC group wanted to meet at Mad Hatter’s Bakery; I went with them and said that I had already eaten on campus because I didn’t have cash to spend. Since then, I have continued to notice the presence of overt and subtle class issues and classism on campus. I couldn’t find a place for my “poor identity.” While writing my resume, I put McDonald’s under work experience. A friend leaned over and said, “Do you think it’s a good idea to put that on your resume?” In their eyes, it was better to list no work experience than to list this “lowly” position. I did not understand these mentalities and perceptions of my peers. Yet no one was talking about this discrepancy, this apparent class stratification that I was seeing all around me.

People associate many things with their identity: I’m a woman, I’m queer, I’m a poet. One of the most defining aspects of my identity is being poor. The amount of money (or lack thereof) in my bank account defines almost every decision I make, in a way that being a woman or being queer never has and never will. Not that these are not important as well, just that in my personal experience, they have been less defining. Money influenced the way I grew up and my family dynamics. It continues to influence the schools I choose to go to, the food I eat, the items I buy and the things I say and do.

I live in a reality where:

  • Sometimes I lie that I am busy when actually I just don’t have the money to eat out.
  • I don’t get to see my dad anymore because he moved several states away to try and find a better job to make ends meet.
  • I avoid going to Student Health because Duke insurance won’t do much if there is actually anything wrong with me.
  • Coming out as queer took a weekend and a few phone calls, but coming out as poor is still a daily challenge.
  • Getting my wisdom teeth removed at $400 per tooth is more of a funny joke than a possible reality.
  • I have been nearly 100 percent economically independent from my family since I left for college.
  • Textbook costs are impossible. Praise Perkins Library where all the books are free.
  • My mother has called me crying, telling me she doesn’t have the gas money to pick me up for Thanksgiving.
  • My humorously cynical, self-deprecating jokes about being homeless after graduation are mostly funny but also kind of a little bit true.
  • I am scared that the more I increase my “social mobility,” the further I will separate myself from my family.
  • Finances are always in the back (if not the forefront) of my mind, and I am always counting and re-counting to determine how I can manage my budget to pay for bills and living expenses.

How Calgary’s Oil Boom is Threatening to Destroy It’s Middle Class

From the Globe and Mail

When Necole Hines moved to Calgary from Toronto nine years ago, she was offered teller positions at four different banks. When she got laid off from a recent job at a stock photography company, she easily found another in sales and administration at a magazine.

Ms. Hines – who spent a year in university but has no degree – has always made lower-end but respectable wages, most recently around $50,000 a year.

But that salary doesn’t go very far in what has become one of Canada’s most expensive cities, where an oil boom has created reams of new money and driven up the cost of everything from housing to groceries.

The signs of wealth are everywhere – from the frenzy to build the new tallest skyscrapers, skyrocketing sales at the four-year-old Bentley dealership, and plans for high-end malls and neighbourhoods at every turn.

In the country’s energy capital, where business people, lawyers, engineers and geologists earn some of the highest salaries in Canada, households making less than a six-figure income – who many would classify as middle class – face a tough slog.

Calgary families earning up to $68,175 still qualify for a three-bedroom social housing unit, proof that even amid Calgary’s wealth, middle-class households are being increasingly squeezed. The tight labour market created by the expansion of the energy industry has not eliminated the issue of income inequality. Far from it – the rise in the cost of living is adding to the pressure.

Ms. Hines will attest that if you’re not working for an oil and gas company, or one of the other corporate towers that make up the landscape of the downtown, it’s an expensive place to be.

“If you don’t get into that right industry, you’re still having to pay for the same things as somebody else making that amount of money,” Ms. Hines said.

She found she needed a car because public transit isn’t reliable, and food basics such as produce and cereal are more expensive. (The Consumer Price Index was higher in Calgary in 2012 than any other city in Canada, except for Edmonton.) In a city where home ownership is prized, the average single-family home costs more than $516,000, so the single mother of three rents the main floor of a house. Although she is the main breadwinner for her family, Ms. Hines has never felt as if she’s been able to get ahead. “In this city, it’s not that easy.”

Alberta’s bountiful oil and gas resources have given many people steady work, and have made others rich. Calgary is home to more than one in 10 of Canada’s wealthiest tax filers, those with an annual income of at least $201,400. Between 1989 and 2010, its share of the national total more than doubled, to 11 per cent from 5 per cent.

But the influx of money and 20,000 newcomers to the city each year – whether it’s for views of the Rocky Mountains or the low unemployment rate – means the demand for every service, from housing to hairdressers, has gone up.

“It’s not all sunshine and rainbows in Calgary,” Calgary Mayor Naheed Nenshi said in an interview. “There are a lot of people who are vulnerable. There are a lot of people who are living on the margins.”

While Calgary has become home to one of the country’s highest family median annual incomes – now at $93,410 – increasing wealth has not affected everyone equally. In an analysis of Statistics Canada income-tax data, the University of Alberta’s Parkland Institute says Calgary is Canada’s most unequal city, as the bottom 90 per cent of income earners saw an average increase in pay (adjusted for inflation) of only $2,000 between 1982 and 2010.

Alberta has the highest average hourly wages in the country, but certain sectors routinely benefit more than others. For instance, while people in business, finance or sales saw large average increases in hourly rates over the past 12 months, wages in art, culture and recreation occupations dropped.

Cam Broten: Focused on What Matters

Excellent short video by NDP leader Cam Broten

Broten is right on with these issues and I am going to suggest that the problem is even worse than what he says.  I am glad he is paying attention to them.

Saskatchewan Connected

I have to admit I was disappointed to see this announced.

A free wireless Internet service in Saskatchewan is being shut down six years after it was introduced.

SaskTel has announced that the “Saskatchewan! Connected” initiative is being terminated across the province due to lack of use.

The service was launched by the provincial government, providing a basic level of Internet service throughout the certain businesses districts and post-secondary campuses in Regina, Saskatoon, Moose Jaw, and Prince Albert.

At the time government ministers insisted it would “build on Saskatchewan’s reputation for innovation and being in the forefront of technology advancement.”

It was used by a lot of homeless men and women at The Lighthouse who had wifi capable cell phones but could not afford the extremely high data rates to stay connected to others.  Since The Lighthouse had the worst network I have ever seen, I found myself having to use Saskatchewan Connected on more than one occasion but found it was unusable after mid-morning which suggested to me that it was being used a lot.

It’s a short sighted decision by the Saskatchewan Party that hurts those without internet access tremendously.

Ad Volarem Debate

This portion on the September 9th Saskatoon City Council debate on the flat tax is disturbing on so many levels. As you can see in the video clip above, the Mayor is talking about how he doesn’t see the City having a role in wealth redistribution and then goes on to mention affordable home ownership; which is a city run wealth distribution program as money is raised by the Land Bank selling lots at market value and then funnelled into affordable housing and attainable home ownership programs.

Then he launches into the city not using ad volarem for super pipes and doesn’t quite realize that it is only a $2 fee.  Recycling mean while is a fee for service (which is only $4.66 a month).  Finally he gets into the part when he says the people he care the most about are the seniors.  I know what he is saying but there are a lot of people on the west side of the city (that don’t vote for him) that have not benefitted from the economic expansion in Saskatoon and they would be badly hurt by a base tax as well.  So by somehow wanting to keep them in their homes, he plans on taxing them more.  

If you listen to the end, you will hear Coun. Darren Hill challenge the mayor on his suggestions that those who are in favour of Ad Volarem taxes are forcing seniors out of their homes (which is wrong on multiple levels, especially since most low income seniors would pay less taxes under Ad Volarem than under a base tax) and the Mayor denying and demanding an apology.

Here is how Gerry Klein saw the debate

Yet it seemed to have some council members unduly flummoxed, particularly Mayor Don Atchison whose convoluted argument in support of the base tax included insisting that it’s not up to the city to redistribute wealth and claiming that increasing the property tax threatens to throw widows out on the street.

The first part of that argument is clear: The city is responsible for providing services such as maintaining the streets. If charging a ratepayer whose property is assessed to be worth $50,000 the same $170 that is charged to someone whose property is assessed at $1.8 million, well, that’s just fair.

But the second argument appeared to be a non sequitur that contradicts the first. It strayed into wondering why more lowincome seniors haven’t taken advantage of a city program that would allow them to defer payment of tax increases and allow that money to eat into the value of their homes.

The mayor’s argument was so convoluted that it devolved into a painful-towatch war of words with Coun. Darren Hill, who insisted that his rejection of the proposed base tax wasn’t meant to deprive widows of their homes.

“That’s not what I said and I demand an apology,” Atchison replied.

Well, I apologize because, like Hill, that’s what I heard.

Attaching a flat tax that would require 85 per cent of civic ratepayers to pay more in relation to the value of their homes so the remaining 15 per cent – including commercial properties valued in the millions – won’t have to face increases clearly would have a detrimental impact not only on hardpressed seniors on fixed incomes but also on the vast majority of citizens.

In case you are wondering, I downloaded the MP4 of the entire council meeting (40 minutes), imported all four hours of video into iMovie (45 minutes), watched it (kill me now), and then edited some interesting clips and uploaded them to the OurYXE YouTube Channel.  I keep hearing from people who are interested in Council stuff but have no desire to watch hours of it.  Hopefully this will make some of the debates easier to get into.  Of course it almost makes it a lot easier to blog about.

How Poverty Takes Over the Mind

How does poverty affect your mind?

Suppose you got no sleep last night and you have to take an intelligence test today. If you’re like most people, you’re not going to do so well on that test. Now suppose you are struggling with poverty and you have to take the same intelligence test. How, if at all, will your test score be affected?

Harvard University economist Sendhil Mullainathan and Princeton University psychologist Eldar Shafir offer a clear answer: You will probably do pretty badly. In a series of studies, they found that being poor, and having to manage serious financial problems, can be a lot like going through life with no sleep. The reason is that if you are poor, you are likely to be preoccupied with your economic situation, and your mind has less room for other endeavors. This claim has important implications for how we think about poverty and for how we select policies designed to help poor people.

In one experiment, Mullainathan and Shafir went to a large shopping mall and paid numerous people, with a diverse range of incomes, to participate in a little test. They began by asking participants how they would solve a financial problem (for example, they might need to spend a certain sum of money to fix their car).

Participants were randomly assigned to one of two versions of the problem. In the “hard” version, the cost involved was pretty high (it might cost $1,500 to fix the car). In the “easy” version, the cost was low ($150). After explaining how they would solve the problem, people were subjected to intelligence tests.

Here’s the remarkable result: When rich people and poor people were assigned to the easy version of the financial problem, they performed about the same on the intelligence tests. But when they were assigned to the hard version, with its larger financial stakes, poor people did a lot worse on the intelligence tests, and rich people looked much smarter.

Was this a result of some kind of “math anxiety” on the part of the poor? Evidently not. Mullainathan and Shafir conducted a second experiment in which they began not with a financial problem but with arithmetic questions, using the same sets of numbers as in the first experiment. In this version of the experiment, greater difficulty in the initial question didn’t produce differences between rich and poor on subsequent intelligence tests.

What’s going on here? Mullainathan and Shafir have a straightforward answer. If you are poor and you are trying to manage a hard financial situation, your mental resources will be strained, and you are less likely to perform well on other tasks.

This is what a homeless family looks and sounds like

My friend Mark Horvath just uploaded this heartbreaking story of homelessness in St. Louis.  It’s not a typical story in Saskatoon (thank goodness) but it does happen even here.

The World’s Tallest Slum

Welcome to the world’s tallest slum: poverty-ridden Venezuela’s Tower of David. Squatters took over this very unfinished 45-story skyscraper in the early 1990s, and they’ve been there ever since.