Canada's growing gap at new 30-year high

TORONTO – Canadian families are putting in more work time, yet most – 80% of them – are getting a smaller share of Canada’s growing economy, says a study by the Canadian Centre for Policy Alternatives (CCPA).

The study finds Canada’s income gap between the rich and poor is growing, largely because the lion’s share of Canada’s economic growth is going to the richest 10% of families. It’s not going to the majority, the 80% of families earning under a $100,000.

“Canada’s gap is growing at a time when Canadian families are playing by all the rules – working harder, contributing to a growing economy – but most aren’t getting payback,” says study author Armine Yalnizyan, research fellow with the CCPA.

The study, The Rich and the Rest of Us: The Changing Face of Canada’s Growing Gap, looks at the earnings and after-tax incomes of Canadian families raising children under 18, comparing families in the late 1970s and those in the early 2000s. The study finds:

• Canada’s income gap is growing: In 2004, the richest 10% of families earned 82 times more than the poorest 10% – almost triple the ratio of 1976, when they earned 31 times more. In after-tax terms the gap is at a 30-year high.
• Bottom half shut out: Between 1976-79 the bottom half earned 27% of total earnings. Between 2001-04 that dropped to 20.5%, though they worked more. Up to 80% of families lost ground or stayed put compared to the previous generation, in both earnings and after-tax terms. The poorest saw real incomes drop.
• Work is not enough: All but the richest 10% of families are working more weeks and hours in the paid workforce (200 hours more on average since 1996) yet only the richest 10% saw a significant increase in their earnings – 30%.

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For information, please contact: Trish Hennessy, director of the CCPA’s Growing Gap Project, w (416) 263-9896.

To get the report, see Canadian Centre for Policy Alternatives’ www.growinggap.ca or www.policyalternatives.ca.