The ACTEW Blog

The Canadian Centre for Policy Alternatives (CCPA) recently released a study The Rich and the Rest of Us: The Changing Face of Canada’s Growing Gap. The study, by Armine Yalnizyan, focuses on the incomes of Canadian families through 1970s to 2000s raising children under the age of 18.

Her research demonstrates the Canada's income gap between the richest and the poorest families is increasing. This may not come as a surprise to you, but Yalnizyan points out that the income gap is increasing despite a prosperous economy: "[Canadian families] are falling behind in the best of economic times, under conditions that would typically yield a reduced income gap: low unemployment rates, more Canadians working, and more Canadians putting in longer hours in the workplace."

How much has this gap actually increased? Yalnizyan's economic analysis found that thirty years ago, the richest 10% of Canadians had incomes 31 times as big as the bottom 10%. Today, their incomes are 82 times as big. The bottom 40% of Canadians (about 12 million people) are actually worse off, with lower incomes today (after inflation).

Most of the rest of Canadians are managing to keep pace or slightly improve their incomes only by working considerably longer hours. Yalnizyan found that only the richest families are actually doing better, earning significantly more and working fewer hours.

Yalnizyan concludes that "despite a decade of emphasis on how much Canadian governments can do for working families by cutting taxes, the bigger benefit to families came through income supports (transfers)." In a Toronto Star article from March 16, Linda McQuaig situates the CCPA study within the upcoming federal budget and the focus on tax cuts, arguing "tax cuts are of little benefit to most Canadians. In fact, they ultimately hurt the majority of Canadians, by depriving government of revenue it needs to fund social programs and transfers, which do help Canadians."

Labels: Issues_and_Trends, Resources_and_Research

# posted by Actew : 1:10 PM