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September 29, 2024

Spend a little, get a lot

A fundamental unfairness in how people with disabilities are treated by government is the fact that few of their supports flow through their own hands.  Employment insurance payments go directly to the unemployed by direct deposit.  Disability supports mostly flow through third parties.

According to Statistics Canada. Table 13-10-0379-01  After-tax total income for persons with and without disabilities aged 25 years and over, by severity, by age group and gender, people with disabilities have after-tax income at the same rate as those without disabilities - 99%.

Surprise!  The distribution for people with disabilities is weighted toward the lower end of the scale:


Nobody earning above $70,000!

Minimum wage in Nova Scotia is $15.20/ hr or $30,400/yr.  Would we all feel better if everyone made minimum wage or more?  I would, because it values self-reliance and gives meaning to all those platitudes like 'equity', 'fairness', 'human rights' and 'inclusion'.  Expensive?  

To be clear, this data does not consider age or severity of disability.  No upper age limit, all measures of severity.  Everyone over age 25 earning under $30,000. 

Boosting incomes boosts business and taxes. There are 268,010 Nova Scotians earning less than minimum wage.  We can figure the cost of making sure people have a minimum wage income by counting them and figuring out how much they need.  

Just by using the midrange income from each category, we can make some useful estimates.

IncomeMidrange usedNumber
Under $10,000 (including loss)$5,00044,040
$10,000 to $19,999$15,00079,560
$20,000 to $29,999$25,000136,920
    
First, what would it take to pay them minimum wage?

Number in categoryFor those without disabilitiesFor those with disabilities
IncomeWithout DisabilitiesWith DisabilitiesTop up neededless Feds new $300(?)/moNET Top up
None4,4903,000$30,000$3,600$26,400
Under $10,000 (including loss)26,24017,800$25,000$3,600$21,400
$10,000 to $19,99937,65041,910$15,000$3,600$11,400
$20,000 to $29,99976,07060,850$5,000$3,600$1,400
TOTALS144,450123,560

 Then just multiplying:

Top up x number
IncomeWithout DisabiitiesWith DisabiitiesTOTALS
None$134,700,000$79,200,000$213,900,000
Under $10,000 (including loss)$656,000,000$380,920,000$1,036,920,000
$10,000 to $19,999$564,750,000$477,774,000$1,042,524,000
$20,000 to $29,999$380,350,000$85,190,000$465,540,000
TOTALS$1,735,800,000$1,023,084,000$2,758,884,000

$2.7 billion!  About 16% of revenue.

But those newly self-reliant folks suddenly are regular people - consumers and taxpayers:

Taxes on $30,400Estimated HST on $15k spendingINCOME TAX + CPPTotal # below minimum wageTOTALSSpendable on food & rentPer capita
Federal$750$3,779
268,010
$1,213,817,290
Provincial$1,500$1,538$814,214,380
$2,028,031,670$6,119,472,330$22,833

So by investing $2.7 billon, governments get $2 billion back and below-minimum wage earners are left with $6.1 billion to be regular citizens!  How the provincial/federal split would end up is to be determined.

How can that be?  Remember, many low-earners are already in the workforce paying $604 million in taxes:

IncomeMidrange usedNumberINCOME TAX + CPPTOTAL TAXEarnings
Under $10,000 (including loss)$5,00044,040$172$7,574,880$220,200,000
$10,000 to $19,999$15,00079,560$1,160$92,289,600$1,193,400,000
$20,000 to $29,999$25,000136,920$3,684$504,413,280$3,423,000,000
TOTAL260,520$604,277,760$4,836,600,000

and earning $4.8 billion - we're just making sure they all get a minimum annual wage.

So with  $22,833 in their pockets, people can shop around for supports, food & shelter.  They are indistinguishable from the rest.  Equals!

In addition, savings accrue from:
  • Social Enterprises become competitive
  • Community Services programs become redundant
  • Business becomes accessible for self-interest
  • Charities may have their government supports redirected.
  • Government aligns with the Charter
No doubt implementation will be complicated.  Bureaucrats will resist.  Charities would probably rather receive direct government payments than compete for clients.  Some will continue to need extra care, perhaps from an existing program.

These calculations seem right, but even if they're wrong by half they're do-able.  I wish I had confidence that someone in government was thinking outside the box.  Or thinking at all.

Let me know what you think.

Gus Reed
wcreedh@gmail.com

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