the jimmymac attack!

This is a collection of assorted observations from my travels and experiences. Many of the posts refer to life in Taiwan where I spent a year living and working. And many others are about my own country, Canada.

Wednesday, November 15, 2006

 

Economics of poverty

Many people do not think money and resources should be spent on helping people living in poverty. They will say that they do not want their tax dollars used to help lazy people who wont work. In Vancouver my very unscientific assessment estimates that about 50% of the population would like to help poor people. The other 50% would like to hire more police and put the homeless in jail. The difference lies in a very fundamental belief about human nature. However no matter what your beliefs about human nature I would argue that the hardline approach is not economically sound. Hiring more police is very expensive and ultimately it also is not effective.
Here are other ways in which the present approach is not only not working but it is also expensive and a waste of tax dollars. The policy of letting poor and homeless and addicts fend for themselves just creates more problems and expense for everybody.
The cost of poverty for us all:
1. Health: People living in poverty have more health problems and cost the health system more. They will use hospital and emergency services much more than other people. For example I am a healthy person and have never been taken to hospital by ambulance. An ambulance call costs the health system at least $1000 a trip. Some people living in poverty will call an ambulance once a month or once a week when they're sick. I'm sure there are many calls every day in a big city like Vancouver. Healthy people use the medical services less and cost taxpayers less. Physical health is directly related to economic health.
2. Crime: In Vancouver the amount of property crime is 3 times higher than in Toronto. Why? Because the drug problem is so much worse. Drug addicts will do anything to get the money for drugs. Cars and houses are broken into every day. Stores and offices and people are robbed every day. This costs people and businesses. It also costs taxpayers because the police must respond to the crime. It costs people and business because bars and security must be put on doors and windows. Private security services are one industry that is doing well in this environment.
3. Housing: You would think having people sleeping on sidewalks would not cost taxpayers anything. It's free accommodation isn't it? This situation leads to the existence of homeless shelters. Shelters are not cheap. To have one person in a shelter for one night costs the government $80. So to house a person this way for one month costs $2400. A person could rent a very nice apartment for that price. Three or four people could be housed in modest apartments for what it costs to keep one person in a shelter.



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