Sole dwellers are the most common household type, yet many live in poverty and substandard housing. Future policy must go beyond stop-gap measures.
Early 2020 sent COVID-19 shock waves around the world. The devastation saved its knockout punch for groups already struggling to find steady ground: racialized communities, Indigenous Canadians and persons with disabilities. Many individuals living on their own were at special risk due not only to low and unstable incomes but also to anxiety and the stress of social isolation.
Their plight has made clear that many long-standing challenges have yet to be resolved. Nothing like a pandemic to expose the dangers of serious policy gaps. Time for a policy wake-up.
For the first time, sole dwellers were the most common household type. Statistics Canada reported that they more than doubled, from 1.7 million in 1981 to 4.0 million in 2016. While these numbers should place singles high on the policy radar, it would be a mistake to consider them a single entity with the same needs. Many have lived as part of a couple and will partner in future. Not all struggle financially.
Because sole-person households in Canada are a diverse and dynamic group, public policy should focus on those facing labour market or personal (e.g., health-related) challenges. Thirty-three percent of working-age singles live in poverty compared to 10 percent of all Canadians. More than 20 percent of singles aged 45 to 64 have experienced poverty for six straight years or more. Single-adult households represent 28.2 percent of the population but comprise an alarming 48.1 percent of households accessing food banks.
Enter the rogue actor on this already-fragile economic stage. Between February and April 2020, COVID-19 created a 32 percent decline in weekly hours worked and a 15 percent drop in employment. Close to half the job losses were among the lowest earners. Single workers with no children experienced the largest percentage loss in total monthly hours in this period.
The International Monetary Fund warns that pandemics tend to widen the gap between rich and poor. The commonly used Gini coefficient measure of inequality increases, on average, in the aftermath of these events. After five years, the net Gini typically goes up by nearly 1.5 percent, a significant rise given that this measure moves slowly over time.
In recent months, policy-makers have rightly been consumed by the crisis. Ottawa responded swiftly to the COVID-19 emergency with multiple programs of financial aid. Now it’s time to focus on the future.
Focus on root causes
There is no magic-bullet solution for complex challenges. So-called “wicked problems” call for a strategically designed cluster of policy measures. While the actions proposed here would apply to all workers, these measures would be of particular benefit to single workers because of the twin challenges many of them face related to low earnings and poverty, and the higher cost of solo living.
Current work arrangements produce income inequality. First order of business: make work pay. A living wage enables a modest, but decent, life. It took COVID-19 to highlight the need for adequate wages for essential workers. That lesson needs to apply broadly.
Pathways to decent work should be created through targeted strategies, such as community benefit agreements. These arrangements require publicly supported projects, including infrastructure investments, to train and hire marginalized workers. With few ladders to opportunity, low earners remain at the bottom rung.
The playing field can be levelled by building the knowledge and skills of the most vulnerable workers. Food Banks Canada has reported that 27 percent of singles aged 45 to 64 have a literacy score of Level 1 or lower compared to 17 percent of Canadian adults.
Repair the safety net
As I outline in a recent commentary for the Institute for Research on Public Policy, government transfers play a crucial role in reducing inequalities in employment income. While all workers rely on two main programs, the Canada Workers Benefit (CWB) and Employment Insurance (EI), lower-earning workers with children receive additional benefits from these programs.
The CWB supplements low wages. Unfortunately, the benefit is modest and its design so narrow as to be negligible in the assistance it provides. The maximum benefit for single individuals is an annual $1,355 compared to $2,335 for families (amounts vary for Quebec, Alberta and Nunavut).
EI replaces income during periods of unemployment. It pays 55 percent of average insurable weekly earnings, up to a maximum amount. In 2020, the maximum yearly insurable earnings amount is $54,200, resulting in a weekly maximum of $573. Low-income workers with children and net annual family income up to $25,921 may be eligible for a family supplement, which can increase the benefit rate up to 80 percent of average insurable earnings. Solo earners are not eligible for any extra benefits.
EI coverage is the major problem for all workers. The percentage of workers receiving EI benefits hovered around 80 percent from the 1960s to the early 1990s. In the mid-1990s, tightened eligibility rules reduced coverage to around 40 percent, where it has remained and is even lower in Ontario.
The shortcomings of EI became starkly clear during the rush to create the Canada Emergency Response Benefit. With CERB phasing out, Ottawa recognized the need to significantly reduce the EI qualifying threshold and create three temporary programs for those who are still not EI-eligible. In the absence of comprehensive income security reform, the relaxed eligibility rules and stop-gap measures may have to remain in place for some time.
Reconstruct the income security architecture
Fixing current programs is essential but not sufficient. Bold steps had been taken in the overhaul of Canada’s income programs, starting with the reformulation of provincial/territorial social assistance by removing children’s benefits from social assistance. The National Child Benefit became the first brick in Canada’s reconstructed income security architecture.
Ottawa substantially boosted child benefits to raise all low-income families to the same level, whether on social assistance, other income programs or in the workforce. The provinces/territories, in turn, removed child benefits from social assistance and, under a negotiated agreement, used their windfall savings to invest in services and supports for low-income families with children.
Similar reconstruction that would have reconfigured “adult benefits,” including the CWB, EI and social assistance, was originally envisaged. The reconfiguration of adult benefits would apply to all workers, including single workers. Like child benefits, Ottawa would assume responsibility for income security and the provinces/territories would invest in employment supports, health benefits and social services.
Unfortunately, that profound transformation in benefits for adult workers never materialized. Single workers, in particular, remain the forgotten poor of the policy world. If nothing else, COVID-19 has highlighted the need for an income guarantee through the redesign of existing programs or guaranteed income that collapses them into a single benefit.
Tackle housing affordability
Single households face a heavy burden if they are unable to share accommodation. Living solo means paying solo –– for rent, food and other necessities. Statistics Canada reported that the proportion of one-person households with monthly shelter costs considered not affordable (i.e., 30 percent or more of average monthly household income) was more than double the proportion among other household types (41 percent versus 17 percent).
Homelessness is the tip of the housing insecurity iceberg. The 2016 Census counted 995 shelters with 22,190 residents, the vast majority of whom were single (89.1 percent) and poor (84.7 percent). With limited opportunities for proper hygiene and physical distancing, residents are at high risk of COVID-19 exposure.
In 2017, Ottawa launched the National Housing Strategy to improve housing affordability. While the announcement received a hero’s welcome, the results appear dubious. Ottawa needs to intensify its efforts on housing, especially in light of COVID-19’s impact on low-income households living in sub-standard accommodation. Fortunately, the recent throne speech promised additional federal investment in affordable housing.
Pay attention to special needs
A pre-COVID-19 report by Food Banks Canada found that 17 percent of singles experience mental illness and/or substance abuse compared to seven percent of all Canadians. COVID-19 hit singles particularly hard, leaving them isolated and vulnerable. They must be the priority targets of future mental health initiatives.
Persons with disabilities often face higher costs for technical aids and personal supports. In August 2020, Statistics Canada released the results of a questionnaire to identify the impact of COVID-19 on Canadians with disabilities. Among the many findings, respondents who lived alone (65 percent) were more likely than households without children (58 percent) to report a negative impact on their ability to purchase essential goods.
The federal government established a COVID Disability Advisory Committee and announced one-time financial assistance. While this stop-gap measure was welcome, it was just that: a stop gap. Ottawa needs to take leadership in creating a robust disability income system to tackle the disproportionately higher rates of poverty among persons with disabilities — especially singles. Among persons with disabilities aged 15 to 64, lone parents and persons dwelling alone were the most likely to be living in poverty of any type of household living arrangement. The disability community was pleased with the recent throne speech announcement regarding a new Canadian Disability Benefit modelled after the Guaranteed Income Supplement for seniors.
Inequality is a slow-burning threat. COVID-19 helped fan its flames, with vulnerable workers and single Canadians feeling most of the heat. More than fire-fighting measures, future policy must involve a set of coordinated, multiple initiatives that respond to the long-standing and unresolved challenges of income inequality.
This article is part of the Tackling inequality as part of Canada’s post-pandemic recovery special feature.