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June 12, 2000
Family incomes improved in 1998,
but more for some than others
OTTAWA - Today's release of 1998 family income data by Statistics Canada reflects the good news that Canada's economy is finally providing more jobs and better wages to Canadians after too many lean years, says the Canadian Council on Social Development. At $49,626, average after-tax family incomes were up in 1998 to a level slightly above the last peak in 1989. And the poverty rate for families and children dropped between 1997 and 1998.
"The average income improvements are due to the improved job market and, to a lesser extent, to reductions in income taxes for low and modest income earners that came into effect in 1998," says new CCSD Research Director Andrew Jackson.
However, the numbers released today also show a disturbing trend towards increased inequality of income in Canada.
"If you were in the top 20% of income earners, you had a much better year and decade than did anyone else," says Jackson. While all groups saw improvements in their after-tax incomes between 1997 and 1998, those in the top 20% gained $3,404 or 4.1% compared to just $63 or 0.6% for those in the bottom 20%. And, between 1989 and 1998 the real after-tax incomes of the top 20% rose modestly, while real after-tax income fell for the bottom 80%. People in the bottom 20% experienced a real income decline of 12.6% over the decade.
Also disturbing -- the depth of poverty got worse for those people living below Statistics Canada's low income cut-offs (LICO).
"People excluded from the job market in 1998 found themselves even further from the LICO than they were a year previously. Clearly the job market is not a solution for everyone and cuts to social programs have hurt our most vulnerable citizens," says Jackson. Since 1996, social assistance and Employment Insurance programs have become more restrictive and child-care support has stagnated or dropped in most provinces.
One group in particular fared badly. Poor lone-parent families headed by women who had no employment income received on average $7,456 less than they needed to reach the post-tax LICO in 1998, compared to $6,513 one year previous.
The CCSD has been using the pre-tax LICO for the past 20 years to track levels and changes in rates of low income among Canadians. This year Statistics Canada is highlighting post-tax LICOs, which result in lower numbers of people living below the cut-offs than do the pre-tax LICOs. Using either measure, the percentage of families, individual adults and children living below the LICO dropped between 1997 and 1998. However both measures also show that the poverty rate in 1998 was higher than in 1989 for all groups.
Policy Statements
Canadian Council on Social Development,
190 O'Connor Street, Suite 100,
Ottawa, Ontario, K2P 2R3
Tel: (613) 236-8977, Fax: (613) 236-2750, Web: www.ccsd.ca, Email: council@ccsd.ca
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