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.

Income	Midrange used	Number
Under $10,000 (including loss)	$5,000	44,040
$10,000 to $19,999	$15,000	79,560
$20,000 to $29,999	$25,000	136,920

    

First, what would it take to pay them minimum wage?

	Number in category		For those without disabilities	For those with disabilities
Income	Without Disabilities	With Disabilities	Top up needed	less Feds new $300(?)/mo	NET Top up
None	4,490	3,000	$30,000	$3,600	$26,400
Under $10,000 (including loss)	26,240	17,800	$25,000	$3,600	$21,400
$10,000 to $19,999	37,650	41,910	$15,000	$3,600	$11,400
$20,000 to $29,999	76,070	60,850	$5,000	$3,600	$1,400
TOTALS	144,450	123,560

 Then just multiplying:

	Top up x number
Income	Without Disabiities	With Disabiities	TOTALS
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 $30,400	Estimated HST on $15k spending	INCOME TAX + CPP	Total # below minimum wage	TOTALS	Spendable on food & rent	Per 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:

Income	Midrange used	Number	INCOME TAX + CPP	TOTAL TAX	Earnings
Under $10,000 (including loss)	$5,000	44,040	$172	$7,574,880	$220,200,000
$10,000 to $19,999	$15,000	79,560	$1,160	$92,289,600	$1,193,400,000
$20,000 to $29,999	$25,000	136,920	$3,684	$504,413,280	$3,423,000,000
TOTAL		260,520		$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