Rising Income Inequality in Canada
Senator Art Eggleton
Income Inequity in Canada
Income Inequality in Canada
Statistics Canada reports that from 1980 to 2005 the income of the richest 20% of Canadians grew by over 16% while the poorest 20% declined by 21%. And for those in the middle, earnings were essentially stagnant
The top-earning 1 per cent of Canadians share of national income went from about 8 per cent to close to 14 per cent over the past three decades
Income Inequality in CanadaIn 2012, the top 100 CEOs made 189 times
the average Canadians salary
Last year, while many Canadians were still feeling the effects of the recession, the executive pay for the CEOs of Canada’s largest companies was going up 13%
This has led to about 4% of Canadian households controlling 67% of the total wealth
Income Inequality in Canada
In this land of plenty, 10% of our fellow citizens live in poverty - that’s equivalent to every man, woman and child in Nova Scotia, Newfoundland and Labrador, New Brunswick and Prince Edward island – combined
One in four of them are children
Income Inequity in CanadaInequality playing itself out in Canadian cities
A report by U of T professor David Hulchanski found that Toronto is now made up of 3 cities
One zone of the city is of tremendous wealth and prosperity
On the other hand, there is a huge zone of concentrated disadvantage and poverty with low income neighbourhoods growing from 19% to 53%
The middle class making up a smaller share of the city decreasing from 66 per cent in 1970 to 29 per cent in 2005
How does Canada compare?
Income inequality in Canada is well above the average of the 34 countries of the OECD
According to the OECD, the average income for the top 10 per cent of Canadians is ten times that of the bottom 10 per cent
Why is income inequality increasing?
There is a widening disparity in labour earnings between high- and low-paid workers
The prevalence of part-time and temporary contract work is eroding wages and benefits
Technological progress has been more beneficial to high-skilled workers
Rising self-employment also plays a role, as the self-employed typically earn less than other full-time workers and have more precarious employment
Why is income inequality increasing?
Less redistribution
Canada’s tax-benefit system, which was effective in stabilizing equality, has declined in the last number of years
Corporate boards pushing up executive compensation
ConsequencesBritish epidemiologists Richard Wilkinson and
Kate Pickett, in the Spirit Level, show that less equal societies almost always have more violence, more disease, more mental health problems, higher infant mortality rates, reduced life expectancies, as well as less social cohesion
There's also evidence that shows that a poor distribution of income negatively affect economic growth and reduces social mobility
Solutions?
Tax reform
Better investments in post-secondary education for under-represented groups
Social assistance reform for those in poverty
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