A new report, The Economic Crisis through the Lens of Economic Wellbeing, released on July 29th by the Institute of Wellbeing, says that the current recession will erase many of the economic and standard of living gains made since the mid-1990s. Unemployment and poverty will likely continue to rise and stay at high levels for years.
The report points out that there has been a great loss of income since the onset of the recession and the hardest hit have been the bottom 20 percent of households. Based on previous recessions, the report predicts that unemployment will likely peak at around 10 percent in 2010 and the poverty rate will rise to 13.2 per cent in 2010. The high and sustained rate of poverty is in part due to cuts to EI and social assistance which have weakened the ability of these programs to help lift people out of poverty.
The report concludes that the only way to avoid sustained poverty and unemployment is for government to focus on two priorities: designing and implementing income supplements and retraining for those who have lost their jobs; and measures to offset the shortfall in private spending.