With increased attention on the 99% emerging from the Occupy Wall Street movement, it’s time to open the CCPA vault on the issue.
www.growinggap.ca is our dedicated website on income inequality, and it’s a treasure trove of facts and arguments documenting worsening income inequality in Canada and offering solutions to help close the gap. We’ve got studies, blogs, videos, and interactive web tools. The reports are written by some of Canada’s leading thinkers on this issue, and our contributors span the country. Here’s a sampling, but if you’ve got a few hours to spare, pour yourself a cup of tea and spend some time exploring www.growinggap.ca yourself.
If you’re looking for fast facts, the February 2011 Hennessy’s Index featured a one-page list of statistics showing the reality of income inequality in Canada. It comes in HTML or in a PDF mini-poster format that’s easy to share.
Similarly, check out our You Oughta Know series on income inequality for bite-sized factoids.
CCPA Senior Economist Armine Yalnizyan is one of Canada’s foremost authorities on income inequality. She was ahead of the curve with the release of her 2007 report The Rich and the Rest of Us, which documents the rapid trend of Canada’s richest 10% breaking away from the rest of us.
Armine followed it up with a groundbreaking study on Canada’s richest 1%. The study revealed this generation of rich Canadians is staking claim to a larger share of economic growth than any generation that has preceded it in recorded history. An examination of income trends over the past 90 years reveals that incomes are as concentrated in the hands of the richest 1% today as they were in the Roaring Twenties. And even then, the Canada’s elite didn’t experience as rapid a growth in their income share as has occurred in the past 20 years. Canada’s richest 1%1 — the 246,000 privileged few whose average income is $405,000 — took almost a third (32%) of all growth in incomes in the fastest growing decade in this generation, 1997 to 2007.
CCPA Research Associate Hugh Mackenzie has been making headlines for several years with his annual review of the highest paid 100 CEOs in Canada. The January 2011 report showed Canada’s best-paid 100 CEOs breezed through the worst of the recession with earnings 155 times higher than the average Canadian income earner.
The closer you look at the problem of income inequality, the racialized and gendered dimensions begin to reveal themselves. CCPA Research Associate Grace-Edward Galabuzi and Wellesley Institute Economist Sheila Block co-authored a report examining the trends in Canada. Canada’s Colour Coded Labour Market, co-produced by the Canadian Centre for Policy Alternatives (CCPA) and the Wellesley Institute, draws on 2006 Census data to compare work and income trends among racialized and non-racialized Canadians. It found that racialized Canadian workers earned only 81.4 cents for every dollar paid to non-racialized Canadian workers in 2005 – reflecting barriers in Canada’s workplaces. “We found that during the heyday of Canada’s pre-recession economic boom, racialized Canadians were more willing to work, but experienced higher levels of unemployment and earned less income than non-racialized Canadians,” said Galabuzi. “The distribution of work tells a disturbing story: Equal access to opportunity eludes many racialized Canadians.” Watch the video.
The CCPA’s David Macdonald paired up with Dan Wilson to release a groundbreaking report focusing on the gap between Aboriginal peoples and the rest of Canadians. The study reveals that for every dollar non-Aboriginals earned in 2006, Aboriginal peoples earned only 70 cents – a slight narrowing from 1996 when it was 56 cents for every dollar. The gap between Aboriginal peoples and the rest of Canadians narrowed slightly between 1996 and 2006, but at this rate it won’t disappear for another 63 years without a new approach.
CCPA Research Associate Monica Townson looks at women and poverty and finds that even after taking into account government transfers and tax credits, almost one-quarter (24%) of Canadian women raising children on their own and 14% of single older women are poor, compared to 9% of children.
In 2008 CCPA Research Associate Lars Osberg released a comprehensive study documenting 25 years of income inequality in Canada. He found that between the Second World War and 1980, the economic pie was growing at all points in the distribution, even if income shares in Canada didn’t change much” says Osberg. “But today, there are very different trends for the top, the bottom and the middle 90% of the income distribution.” Growth in Canadians’ average real wages has been stalled since 1979 which, Osberg points out, is “a dramatic change from Canada’s historical experience”. “A quarter of a century ago, circa 1980, someone who wrote about economic inequality in Canada was writing about a country in which real wages had been rising strongly,” Osberg says. “but the ‘new normal’ for Canada’s middle 90% is for stagnant or declining real wages, despite unprecedented improvements in education and skills.”
In April 2008, before a global recession darkened Canada’s doors, we published essays by some of the country’s leading thinkers, who ventured to answer the question: Why does income inequality matter? In the context of a worldwide economic turmoil and the Occupy Canada movement, their words take on even greater meaning today.
In 2007, the CCPA’s Ellen Russell partnered with Mathieu Dufour to look at workers’ pay compared with corporate profits. They concluded Canadians are working harder and smarter, contributing to a growing economy, but their paycheques have been stagnant for the past 30 years. Rising Profit Shares, Falling Wage Shares found that Canada’s economy grew steadily and workers’ productivity improved by 51 per cent in the past 30 years, but workers’ average real wages have been stuck in a holding pattern all this time.
We’ve read a lot about how a speculative housing market contributed to the economic meltdown in the U.S. several years ago. The CCPA’s David Macdonald released a report in August 2010 revealing that for the first time in 30 years, six of Canada's hottest real estate markets are in a housing bubble. This study examines trends in house prices in Toronto, Vancouver, Calgary, Edmonton, Montreal and Ottawa between 1980 and 2010 and finds price increases in those cities are outside of a historic comfort level.
CCPA Research Associate Steve Kerstetter examined Canada’s affordability gap in 2009. The Affordability Gap: Spending Differences Between Canada’s Rich and Poor reveals how Canada’s poorest households often forego buying things most Canadians consider essential, from eyeglasses and dental care to computers and newspapers. “The poorest 20 per cent of Canadian households live in worlds far removed from the richest 20 per cent,” says Kerstetter. “In every spending category, the richest 20 per cent spend six or seven times more than the poorest 20 per cent.”
CCPA-BC Senior Economist Marc Lee documented in 2007 how more than a decade’s worth of tax cuts had disproportionately lined the pockets of Canada’s most affluent families. The study found the top 1 percent of families in 2005 paid a lower total tax rate than the bottom 10 percent of families. “Canada’s tax system now fails a basic test of fairness,” said Lee. “Tax cuts have contributed to a slow and steady shift to a less progressive tax system in Canada.”
CCPA Research Associate Andrew Jackson 2007 study of income taxes revealed Canada's top federal tax rate to be considerably lower than the U.S. The study showed the top U.S. tax rate was 35% on incomes over $326,000 and 33% on incomes over $150,000; Canada's top federal income tax rate was 29% on incomes of over $116,000.
CCPA Economist Hugh Mackenzie partnered with Richard Shillington in 2009 to produce a report like no other. Canada’s Quiet Bargain: The Benefits of Public Spending responds to incessant calls for tax cuts and concludes public services make a significant contribution to the majority of Canadians’ standard of living – worth at least 50% of their income. The study shows middle-income Canadian families enjoy public services worth about $41,000 – or 63% of their income. Even households earning $80,000-$90,000 a year enjoy public services benefits equivalent to about half of their income. The study also shows 80% of Canadians would be better off if the federal government hadn’t cut the GST; 75% would be better off if their provincial governments invested in public services instead of broad-based income tax cuts.
CCPA Research Associate Toby Sanger looks at Canada’s finance sector and finds it could contribute more. Canada’s financial sector has been the greatest beneficiary of recent corporate income tax cuts. The study shows how Canada should join other countries in introducing fairer taxes on the financial sector that could generate over $10 billion a year.
Have we looked at income inequality by province? For the most part, yes: BC, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Nova Scotia. And here's a provincial roundup by Armine Yalnizyan.