1	A Lost Decade: Income Equality and the Health of Canadians Presentation by Katherine Scott November 30, 2002 Canadian Council on Social Development
2	Key Questions What is the situation in Canada today? Are Canadian incomes becoming more or less equal? What is happening at the community level? What is driving growth in income inequality? What can be done about income inequality?
3	The incidence of poverty declined through the last half of the 1990s, yet remains above the level recorded in 1989 _____________________________________________ Average family incomes have increased every year since the mid 1990s. Average “market” incomes among families reached $61,634 in 2000. After taxes and transfers, average family income was $54,725. Improving labour market conditions has resulted in lower rates of poverty. Rate of Poverty 1989 1993 1996 2000 All Canadians 13.9% 17.8% 18.5% 14.7% Children 14.7% 21.0% 21.1% 16.5% Working Age 12.1% 15.7% 17.3% 13.7% Seniors 22.5% 22.7% 19.7% 16.4% (before-tax LICO)
4	Poverty Rates in Canada, 1989-2000
5	The failure to reduce poverty levels to at least 1989 levels points to growing income inequality in Canada _____________________________________________ Despite a gradual decline in the rate of poverty after 1996, the poverty gap – the gap between the poverty line and the average income of poor families or persons below the line – is now larger. Depth of Poverty 1989 1993 1996 2000 All families $7,963 $8,255 $8,671 $8,568 two-parent $9,160 $9,293 $9,812 $10,032 lone-parent $8,947 $8,803 $9,169 $8,472 Individuals $5,914 $6,196 $6,793 $6,598 (2000 constant dollars, before-tax LICO)
6	Poverty Gap Among Families in Canada, 1989-2000 (constant 2000 dollars)
7	Growing income inequality is evident when we compare the average incomes of families at the top and bottom of the income ladder ____________________________________________ Gap between families in top income quintile – that is the top 20% of families – and those in the bottom quintile opened up during the 1991-92 recession and continued to widen until 1998, dipping in 1999, and increasing again in 2000. In 1989, families in the top quintile received roughly $14.00 for every dollar of market income earned by families in the lowest quintile. In 2000, the gap had widened to $16.00 for every dollar. The impact of taxes and transfers is significant. Yet, the pattern of growing disparity is evident as well. The ratio of average after-tax income of top income families to those in the bottom was 4.8 to 1 in 1989; in 2000, it was 5.3 to 1.
8	Average After-Tax Income of Families by Quintile, 1989, 1993, 2000
9	After-Tax Income Share of Families by Income Category, 1989, 1993, 2000
10	As the gap in income has gradually widened, so too has the social distance between communities ____________________________________________ A recent study by the CCSD for the United Way of Greater Toronto found that the gap between poor and affluent communities grew between 1990 and 1999. Eight of the 12 poorest communities in 1990 were still in the bottom group in 1999. The ranking of the affluent communities was even more stable. Median total income of the bottom 12 communities was 38.2% of median income of the top 12 in 1990. In 1999, it had fallen to 29.3% - an erosion of value of 23%. Also evidence of growing spatial segregation.
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12	What is Driving Growth in Income Inequality?
13	"“You might think that..." “You might think that 1987, the year Tom Wolfe published his novel “The Bonfire of the Vanities” and Oliver Stone released his movie “Wall Street” marked the high tide of America’s new money culture. But in 1987, the top 0.01 percent earned only about 40 percent of what they do today, and top executives less than a fifth as much. The America of “Wall Street” and “The Bonfire of the Vanities” was positively egalitarian compared with the country we live in today. (p. 65).
14	Key Factors Behind Growth in Income Inequality ____________________________________________ Significant growth of income and wealth at the top of income scale Polarization of employment and hours of work Erosion of key income support programs for working age population, particularly EI and Social Assistance
15	Action is needed to tackle poverty and unemployment as well as to foster the inclusion and recognition of all citizens ____________________________________________ More equitable societies are healthier societies. Coordinated action is needed: to close the employment gap; to close the income gap; and to close the “common goods” gap.
16	Creating Common Bonds, Bridging Social and Economic Disparities ___________________________________________ Speaking to the last point, there is a critical need for enhanced public supports and services, especially for groups vulnerable to poor health outcomes and life chances. The availability of clean parks, safe water, vibrant schools not only enhances our quality of life, but creates the context wherein individuals can develop their talents and capacities to the full and participate in the community in valued and recognized ways. They reduce the space – physical and otherwise – between citizens, thus fostering social cohesion.