Mar 11, 2009

New CCPA study finds growing inequality and declining family incomes in BC


Yesterday the CCPA released a new study on family income inequality in BC by yours truly, which reveals some disturbing statistics about family incomes over the past 30 years. Among our other key findings:

  • The gap between the wealthiest and the majority of BC families has grown dramatically over the past 30 years. The share of income going to the richest 10 per cent of families has grown fast, while the share going to the bottom half of families has declined substantially. This is true for both earnings and after-tax incomes.
  • Not only has inequality grown, but most BC families with children have also fallen behind in absolute terms. The bottom 70 per cent of families have lower real (inflation-adjusted) earnings than their counterparts in the late 1970s, and the bottom 60 per cent saw a decline in their after-tax incomes as well.
  • Middle-class families in BC have been squeezed to an extent not seen in other provinces.

The figure below illustrates the extent to which BC differs from the rest of the country (detailed provincial comparisons can be found in Appendix 2 of the report).


The findings are startling on their own, but with the recession that’s upon us now the problem is only going to get worse.

Yet it doesn’t have to be that way. It is clear that economic growth alone does not automatically translate into higher incomes for most people, especially for those at the lower end of the scale. The BC government can and should take action to reduce income inequality while also protecting poor and middle class British Columbians from the impact of the recession. There is a range of policy options available, including making the tax and transfer system fairer, expanding public services and social programs for all citizens, reducing poverty and improving earnings and working-conditions conditions for low-wage workers.

In the end, it is up to us to decide what type of society we want to live in: a society that is growing more unequal by the year or a more inclusive one, where the benefits of increased prosperity are broadly shared.

We got great media coverage in Vancouver, so you may have heard the study mentioned on the radio or on the evening CBC news. The Vancouver Sun ran an article about the study in today’s edition.

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