Stats:
· In the 1950s and 1960s, the real median family income in Canada was growing fast enough to double every 20 years. Since 1980, it has barely grown at all.
· Middle class families have only managed to maintain their standard of living by working much harder than their parents, typically relying today on two incomes instead of one.
· Meanwhile, at the top, a recent study by economist Armine Yalnizyan of the Canadian Centre for Policy Alternatives demonstrates, the top-earning 1 per cent of Canadians almost doubled their share of national income, from 7.7 per cent to 13.8 per cent, over the past three decades. The richest 0.01 per cent -- those now earning on average $3.8 million a year -- more than quintupled their share of national income.The other groups - the middle and low income groups - have incomes that have stagnated or fallen. This has led to 3.8% of Canadian households controlling 67% of the total wealth.
· In 2006 Statistics Canada released data on earnings and income from the 2006 Census revealing an increase in income inequality. Based on the median earnings of full-time, full-year earners between 1980 and 2005, the data showed:
Øearnings increased by 16.4 per cent for those in the top income group
Øearnings stagnated for those in the middle income group
Øearnings fell by 20.6 per cent for those in the bottom group
· The average CEO was making about 25 times the average worker in the late 1970s, today's average CEO makes roughly 250 times the average worker.
How does Canada compare to its peers?
· According to the Conference Board of Canada, compared to 16 other OECD countries Canada ranks 12 out of 17 countries for income inequality. And the gap in Canada is increasing at a faster pace than in the United States.
Why is income inequality increasing in Canada?
· The OECD’s study Growing Unequal? Income Distribution and Poverty in OECD Countries points to factors that have driven changes in income inequality in OECD countries over time.
ØChanges in the structure of the population are one of the causes of higher inequality. However, this mainly reflects the rise in the number of single-adult households rather than population ageing per se.
ØEarnings of full-time workers have become more unequal in most OECD countries. This is due to high earners becoming even more so. Globalisation, skill-biased technical change and labour market institutions and policies have all probably contributed to this outcome.
ØCapital income and self-employment income are very unequally distributed, and have become even more so over the past decade. These trends are a major cause of wider income inequalities.
· Others suggest that the rich have used their clout to get governments in the United States, Britain and Canada to change the rules, redirecting economic benefits to themselves. They convinced governments, for instance, to alter the rules governing executive stock options, making them much more lucrative. And the rich also managed to use their control of corporate boards to push up executive compensation.
Consequences:
· The work of British epidemiologists Richard Wilkinson and Kate Pickett shows 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. That means more spending on health care, policing and incarceration.
· People in less equal societies have reduced social mobility.
· There's also evidence linking extreme inequality with serious economic problems. A study by Michael Förster for the OECD shows there is evidence that a poor distribution of income ultimately negatively affect economic growth, through the channels of education, access to capital markets, as well as political and economic mechanisms.
· Impact on democracy. The rich unequal influence on policy decisions.