Welfare state and Poverty in Flanders #6 Transport factor of immobilising financial growth

Poverty evolution in Flanders

6.     Transport factor of immobilising financial growth

At the “Year 2000 International Research Conference on Social Security” in Helsinki (25 -27 September 2000) they came to the conclusion that the high poverty level in countries with high (non-subsidised) employment is connected with an inadequate minimum protection for the employed (e.g. minimum wage) and –especially- for those who are out of work despite the high employment rate (e.g. minimum unemployment benefits and minimum welfare).[1] We cannot escape to the fact that more work leads to less poverty. But people have to be able to go to that work also at a reasonable price in an acceptable timing. In Belgium we see that several villages are not well enough provided with public transport. –  too often it takes too much time to get somewhere [When one goes to Grimbergen airfield from Leefdaal (26 km) in the weekend, one needs two and a half hours to get there, inclusive a three quarter of an hour walk from Vilvoorde railway station to the airfield of Grimbergen (4,8 km) because there is no connection at that time in the morning to get there at 9 am] Transport possibilities is an obstacle for a policy that strives to be employment generating and poverty reducing at the same time. That the poverty is reflected in the traffic appears in the increased use of the bicycle. Traffic jams are also irrelevant, it seems out of studies.[2] Though several people are not aware of the actual cost of their car they are pressed to look for an alternative transport. When you start multiplying cost per kilometre to operate a car by the distance you ride, you can easily calculate how much money you save by riding a bike. We can find an increase of cycling out of poverty. Tamim Raad, a research associate with the Institute for Science and Technology Policy (ISTP) in Perth, Australia, summarizes the relationship between car dependency and the economy in an article titled “Cars and Progress: Our Economy Is Facing Auto-Asphyxiation”: The notion that more cars equals more wealth is really more myth than reality. In fact, some new research shows that high and increasing levels of car dependence actually harms an economy. In a report to the World Bank, researchers from the Institute for Science and Technology Policy (ISTP) in Perth, Australia showed that there are “dis economies” associated with car use.

A European city bike - Image via Wikipedia

Auto dependence can drain an economy of its wealth….
It found that, among cities in the developed world, regional wealth (as measured by per capita gross regional product – or GRP) actually goes down as car use go up. In other words, the more we drive, the poorer we get….
The global comparison is … illuminating. Cities such as Zurich, Frankfurt, Amsterdam, Stockholm, Tokyo and Paris all have a much higher use of public transport than any American, Canadian or Australian city. Yet they build fewer roads and own fewer cars. They have much higher bike use. They have roughly half the transportation deaths. They spend less on getting to work. They emit a fraction of the CO2. And, oh yes, they’re richer.”[3]

With the recent raising of the prices at the pump, men would press their foot less hard on the accelerator but would also leave their vehicle more at the side. For many men that vehicle has become however too expensive. They now must use their bicycles but do have to find a way to stable this travel system. At the bus and train stations place has to be provided at a reasonable price to leave the bicycle for the many hours when off at work.[4]
We know of “Cycling out of poverty” projects for the African countries, but they could use it in Belgium as well. A sturdy bike can be an investment up front, but that shouldn’t make it inaccessible to the poor. The previous years we noticed the growth of “Fietswinkels’ or “Community bike shops” (Bicycle repair shops) and communities which provide these organizations and bike collective networks  with seed money to start up bicycle projects and funding to pay jobless, handicapped and people to work in those venues. The bicycle can help as one the best means to eradicate rural poverty, and give the possibility that people do not have to pay for the high prices for living quarters in a town. More recycling systems for bicycles should be made available. For 25 years, Bikes not Bombs (BNB) from Boston[5], has been a nexus of bike recycling and community empowerment both in lower income neighbourhoods of Boston and in the nations of the Global South. BNB’s programs involve young people and adults in mutually respectful leadership development and environmental stewardship, while recycling thousands of bicycles. More shops that provide free or low-cost services to the community and have an educational focus, teaching others how to fix bikes should be made available to accessible to people without enough money.

Next to the bicycle we need more practical public transport. We should take care that we come to a saving of almost 2 hours per day of transport time per household. The car’s contribution to the urban economy is as much evil as it is unnecessary. We don’t need more car-based planning bleeding our cities of their vitality and wealth. We need cities that not only make more social and environmental sense, but more economic sense too.[6] Having more mobility facilities gives the consumer the chance to substantially bring more frequent visits to market and medical facilities. It is ironical that to support transport, huge subsidy is given on the car industry and for the roads, but not as much for the bicycle roads. The car which is used majorly by middle class households, receives the most attention. The bicycle, which is used more by poor households, is often forgotten by the government.

That state should take care that the poor, who start with a very low level of capital per person, and then find themselves trapped in poverty, because the ratio of capital per person actually falls from generation to generation, shall be able to get out of the vicious circle. Therefore, to get out of the poverty trap, the public sector should focus mainly on investments in human capital (health, education, nutrition), infrastructure (roads, power, water and sanitation, environmental conservation), natural capital (conservation of biodiversity and ecosystems), public institutional capital (a well-run public administration, judicial system, police force), and parts of knowledge capital (scientific research for health, energy, agriculture, climate, ecology)[7] An other poverty trap can be found when you get such ridiculous situations where people who want to work get penalized or lose a certain amount of their income because they take on a job. When retired people consider themselves still useful for the community, want to stay active and/or want to topple their income of the retirement fund they lose already an amount of their monthly retirement payment but when they come over a very low amount of income they lose their full retirement wages. In Belgium it is also absurd that certain benefit payments for non working youngsters are reduced as soon as they try to take on some work, even when it is for just a few hours. A person in poverty will qualify for social services, but if that person attempts to get work, benefits will be reduced proportionally according to income, leaving the person in the same position. Individuals who get enough work to totally support themselves may find themselves paying a high marginal tax rate, again putting them right back where they started. When income rises they have to face lesser income than when they would not work. This brings in the effect of discouraging higher paid work whether that involves working longer hours or acquiring skills. The welfare trap demonstrates the way that social welfare systems can create a perverse incentive. Although such systems are intended to provide a buffer for unemployed citizens and thereby raise the standard of living, they may create a situation whereby the welfare recipient has an incentive to avoid raising his own productivity because his net income gain after benefits and taxes is not enough to compensate for the effort he must expend at work.

Een analyse van de Armoede in Vlaanderen door Marcus Ampe - Poverty in Flanders, an analysis by Marcus Ampe

---

[1] http://www.issa.int/pdf/helsinki2000/topic4/2cantillon.PDF

[2] Top 5 Reasons to Ride a Bike

[3] Reasons to Bike. Correlation with Overall Wealth.

[4] The situation of the bicycle and poverty: Armoede en fietsbult

[5] Bikes Not Bombs promotes bicycle technology as a concrete alternative to war and environmental destruction. They provide technical and material resources for transportation alternatives.

[6] Reasons to Bike. Correlation with Overall Wealth. (Bolding added; 1998).

[7] Sachs, Jeffrey D. The End of Poverty. Penguin Books, 2006. Pg. 252

+++

Related articles

• Poverty in Cuba and the US (robertlindsay.wordpress.com)
  In Belgium there is at least a social net, but if we are not careful we are going to go to American situations. Having the hospital insurances driving the prices up, we also find more people who cannot afford such a medical insurance.
  A lot of Americans can’t even afford utilities, even if they have an apartment.
  In Cuba, everyone can afford a place to live. Rent is set at 10% of your salary, so it’s affordable. Everyone has plenty of food to eat. The malnutrition level is the lowest in the Americas. Cuba, the USSR and the East Bloc made it top priority to wipe out poverty. But I would not agree with that they were successful at this. In the Soviet Union there was also a big difference between people. (This I know from my Russian colleagues who were privileged, and I could see when I was subscribed to the Soviet Weekly in the seventies). The the USSR and the East Bloc failed at economic growth to the extent that the West surpassed them, and when the system was dissolved we got a real huge gap between the poor and the new rich.
  “Moral to the story is that there is more to life than just wiping out poverty. Even if you wipe out poverty, if you can’t keep up with competing systems, people will tire of a mere poverty-less state and will wish that they had a state with higher economic growth.” The communist system did not work because people were not rewarded for their work and saw that people who did nothing got as much as tehem. Why would they do some more? In a certain way we need a competing world, to get advancement, but there has to be created also a form of solidarity.
• Big cities attracting poverty, Statscan data show (theglobeandmail.com)
  Living in a small deserted place does not many life changes to a person, so it is no wounder that they go to look to the bigger cities to find more luck, work, lodging and food.
  In Vancouver, the incidence of low-income was 17.8 per cent in 2000. By 2009, it had declined just slightly to 16.9 per cent – the highest for urban areas across the country.
  Toronto takes second place. The 2009 poverty rate of 13.2 per cent is slightly higher than the 12.4 per cent at the turn of the millennium.
  Montreal is in third, with 13.1 per cent – although that’s much lower than 19.7 per cent in 2000.In contrast to the big cities, Quebec City has seen its rate plummet, from 15.7 per cent in 2000 to just 4.9 per cent in 2009.
  And Victoria has seen its incidence of low income fall from 16.2 per cent in 2000 to 6.3 per cent in 2009 – although progress has come in fits and starts.
• Bicycles Make Sustainable Sense (buildingsustainablelifestyles.wordpress.com)
  Not only is the bicycle a weapon against direct poverty, it can also reduce a lot of costs of pollution-, road-, and accidental- or health damage to our society.
  We should take more in to account their efficiency both in biological and mechanical terms.
  “The bicycle is the most efficient self-powered means of transportation in terms of energy a person must expend to travel a given distance. From a mechanical viewpoint, up to 99% of the energy delivered by the rider into the pedals is transmitted to the wheels and is also an efficient means of cargo transportation.”
  “According to the IEA, cities currently occupy just 2 % of the world’s surface but account for half the global population, two-thirds of energy use and 76 % of energy-related CO2 output.”
  Also important is that a lot of city funds can be saved  by increasing the efficient use of public space, reducing the need for costly new road infrastructure, preventing crashes, improving the health of the community, and increasing the use of public transportation. those funds can be better used to help the poor people, who often can’t afford a car.
• Fabio Bicycles (timbuktuchronicles.blogspot.com)
  Not only in Africa means a bicycle access to income, social services, different places of work, a means to carry goods. On the West European continent many lesser wealthy people can find a possibility to move easy and fast through the combusted city.