PRESS RELEASE

Nova Scotians less economically secure today than in past but more so than other Canadians

Nova Scotians are less secure economically now than they were a quarter century ago, but rank second in the country in overall economic security, because security has fallen off more sharply in the rest of the country than here.

That's the conclusion of a new report prepared for GPI Atlantic by Dr. Lars Osberg, Professor of Economics at Dalhousie University, and Dr. Andrew Sharpe, Executive Director of the Centre for the Study of Living Standards in Ottawa, and released today.

Osberg and Sharpe constructed an Index of Economic Security, based on the risks faced by Nova Scotians when they are sick, elderly, unemployed, or single parents. They also examined the level of economic security provided by Nova Scotia's social safety net-including minimum wage and social assistance levels, and child benefits.

They found that, while the overall index of economic security in the province declined by 10.8% between 1981 and 2007, the national index dipped by 15.9% in the same period.

Osberg and Sharpe found that the decline in economic security was largely due to the increased economic risks at times of illness that have resulted from sharp increases in direct private health expenditures as a proportion of disposable income. Thus security from the risks imposed by illness has declined by 52.9% in Nova Scotia and by 59.3% in Canada as households spend more out of their own pockets to pay for escalating health care costs.

"What this means," says Osberg, "is that an increasing proportion of Canadians and of Nova Scotians may be at risk of financial crisis, including being unable to afford health care costs, when they fall ill."

By contrast, Osberg and Sharpe recorded a sharp improvement in security from the risks of poverty associated with single parenthood in Nova Scotia due to much lower divorce rates and significant increases in employment among single mothers. But that improved economic security has to be balanced against the fact that employed single mothers spend a lot less time with their children and have the highest levels of time stress in the population as they juggle work and family responsibilities alone.

Osberg and Sharpe also found an improvement in economic security among the elderly and a decline in the economic risks associated with unemployment from 1981 to 2007, though the latter was due entirely to a big drop in unemployment that outweighed the sharp reduction in Employment Insurance coverage during this period.

Looking at the social safety net, Osberg and Sharpe found that welfare benefits declined across the country between 1986 and 2006, but dropped off more sharply in Nova Scotia than nationwide. Single employable Nova Scotians saw their welfare benefits drop by 22%, from $7,840 in 1986 to $6,119 in 2007 (both numbers in 2007 dollars). Those with a disability saw their benefits drop by 21% and single parents with a child by 7%. The only group that saw a marginal increase in benefits was couples with children-up 2%.

Inflation kept real hourly minimum wages at about the same level in 2007 as in 1981 in all provinces. In Nova Scotia, minimum wages increased by just 4% in real terms from 1981 to 2007, but remain the third lowest in the country. Just to reach Statistics Canada's low-income cut-off line (sometimes called the 'poverty line'), a couple with two children in Halifax would have to work more than 90 hours a week at minimum wage.

According to Osberg: "The fact that Nova Scotians working at minimum wage have to put in more hours than a normal full-time working week just to reach the poverty line, raises serious questions about the adequacy of minimum wages to meet household needs."

The full report, titled Economic Security in Nova Scotia, is available on the GPI Atlantic website at: http://www.gpiatlantic.org/pdf/livstand/econsec.pdf., and forms part both of the Centre for the Study of Living Standards' Index of Economic Wellbeing, and of the Nova Scotia Genuine Progress Index, a new measure of wellbeing and sustainable development under development for the province. GPI Atlantic gratefully acknowledges funding for this project provided by the Province of Nova Scotia.

For more information on the results, please contact:

Dr. Lars Osberg, Economics Department, Dalhousie University
902-494-6988 or 455-9486
or
Dr. Andrew Sharpe at CSLS
613-233-8891 or 613-722-1685

Dr. Ronald Colman, Executive Director, GPI Atlantic
902-823-1944 or 902-489-7007