The most recent
set of crime statistics for Canada revealed that police-reported crime in
Canada, as measured by both the crime rate and the Crime Severity Index (CSI),
increased for the fourth consecutive year in 2018, rising 2%. The accompanying figure below further
reinforces the fact that after years of decline – a decline that stretches back
to the 1990s – crime rates are rising.
Of course, all of this begs the question as to why crime rates are
rising again after years of decline.
Explaining the drop in crime rates has been
a
source of some debate. The fall in
crime rates since the 1990s in Canada as well as the United States has been
attributed to a number of factors including new policing strategies, changes in
the market for illegal drugs, an aging population, a stronger economy, tougher
gun control laws and increases in police numbers. As for the impact of the
economy on crime, well that is also a source of debate.
On the one hand, the intuitive feeling is
that a weak economy should cause people to turn to crime. Yet, many studies of the relationship between
the economy and crime have found statistically small relationships between
unemployment and property crime and often no relationship between violent crime
and unemployment. It has also been argued
that economic downturns may actually reduce criminal opportunities as when unemployment
is high more people are at home "protecting" their property and
when out and about they carry less cash and possessions.
If the latter is the case, one could make
the argument that the strengthening economy of the last couple of years has
been a key factor in fueling the recent surge in crime. Unemployment rates in Canada are at historic
lows and to add fuel to the fire – so are interest rates. Low interest rates mean that even if more
employment today is part-time or uncertain, people are still able to consume more and
go out more simply by borrowing more. Indeed,
Statistics Canada also noted recently
that the seasonally adjusted household credit market debt to disposable income
ratio increased to 178.5 percent in the 4th quarter of 2018.
More debt to fuel spending on homes and
basic consumption frees up resources to spend on more illicit things like
illegal drugs and much of the recent crime increase is drug related.
With unemployment low and cheap money
sloshing around both fueling spending and consumption, the opportunities for
crime may have mounted. It is certainly a point worth considering.