'The income gap has widened to the point that the top 10% of B.C. families now earn more than the entire bottom half of families.' - CCPA.
Vancouver (11 March 2009) - A new study by the Canadian Centre for Policy Alternatives (CCPA) says 60% of all B.C. families - poor and middle class - are in worse financial shape today than their parents’ generation.
By contrast, incomes among the wealthiest 10% of the population have risen dramatically. The result is a widening gap between the rich and the rest of the population.
Among the study’s key findings:
- Between 1976 and 2006, real earnings (before taxes and transfers) decreased for the bottom 60% of B.C. families with children — the worst performance in Canada along with Newfoundland.
- The poorest 10% (or decile) were hit hardest, with real earnings falling by 74%. However, even the sixth decile saw their annual earnings (adjusted for inflation) fall from $70,000 on average in 1976 to $65,000 in 2006.
- After-tax income also dropped for the bottom 60% of B.C. families, unlike in any other province, where stronger tax and transfer systems helped compensate for the loss in earnings.
The study focused on families with children under 18. These families make up nearly half of the population and are the main factor in determining the success of the next generation.
“Many recent studies and media reports have focused on the worsening situation for poor people in B.C., and economists have warned that this could deteriorate even further in the recession,” says Iglika Ivanova, author of the study.
“But our study shows that the middle class is vulnerable too — and much more so than in the rest of Canada," she adds.
“These findings point to a disturbing growth of inequality in this province and they help explain why even during our recent economic boom, many people have found it hard to get ahead. This study shows us that economic growth does not automatically translate into higher incomes for most people, especially for those at the lower end of the scale," Ivanova argues.
“We can’t blame these figures on the current recession. The most recent year for which data is available is 2006, when the B.C. economy was still thriving.”
The study, B.C.’s Growing Gap: Family Income Inequality, 1976-2006, outlines policy recommendations to reverse the trend and protect British Columbians from the most severe impact of the recession.
Proposals include making the tax and transfer system fairer, expanding public services and social programs for all citizens, adopting a comprehensive poverty reduction plan and improving conditions for low-wage workers.
The study analyzed custom data supplied by Statistics Canada. B.C.’s Growing Gap: Family Income Inequality, 1976-2006, is available on the CCPA’s website, www.policyalternatives.ca.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE