Spending by Hamiltonians living on social assistance pumps back hundreds of millions of dollars into the city and provincial economies, a report by local researchers says.
Dr. Atif Kubursi, a professor at McMaster University and economist for Econometric Research Limited, is speaking to city councillors Monday about the findings published in The Economic Impact of Social Assistance in Hamilton report.
Commissioners who were appointed by the province to review social assistance, Frances Lankin and Munir Sheikh, are also in Hamilton Monday for public input on the programs.
“People tend to think of social assistance (as) a social burden and many people tend to focus on abuses of the system,â€ Kubursi said Saturday. “What they really should see is that these people are really victims of a market economy and that when we take care of them, we are also taking care of ourselves and that whatever assistance we give them seems to also create jobs.â€
Kubursi and Hamilton Community Legal Clinic staff lawyer Craig Foye looked at the city’s community services data on local OW (Ontario Works) and ODSP (Ontario Disability Support Program) adult beneficiaries. They found OW benefits were about $123.6 million and ODSP benefits were about $244.1 million in 2009.
The report indicates the $368 million received by beneficiaries in Hamilton generated about $440 million in economic activity across the province â€” $296 million of which remained in Hamilton.
The expenditures also led to 5,441 full-time equivalent jobs in the province. More than 3,383 of these positions were in the city, according to the findings. Foye noted these employment opportunities are “spinoffâ€ jobs â€” not jobs in social assistance administration.
The economic impact of this spending is determined based on multipliers, or how the initial expenditure resonates in the economy, he said.
“Because most people on social assistance are receiving below subsistence levels of income, any money that you’re giving them is being spent, really, 100 per cent; none of it’s being saved in the vast majority of cases and it’s being spent locally,â€ he said.
The report, which was submitted by Econometric Research Limited, also pegs the total cost of OW and ODSP programs at about $368 million. The net cost, however, is around $223 million after factoring in tax collected by all three levels of government.
The report not only challenges the notion of social assistance as being a burden â€” it emphasizes societies are assessed by how well they take care of their most vulnerable groups, Kubursi said.
“If these people are not getting social assistance, there will be social dysfunctions that will come.â€