Rich-poor gap widens

By 
  • January 17, 2007
The rich are getting richer, and you're not. The median net worth of the top fifth of Canadian families grew by 19 per cent between 1999 and 2005, according to a Statistics Canada report released in December. Over the same period, the net worth of households in the bottom 20 per cent fell under 43 per cent.
Young workers
Statistics Canada looked at the quality of Canadian jobs in January of 2005 and found that the number of new employees working in temporary jobs increased from 11 per cent in 1989 to 21 per cent in 2004.

Unemployed workers
In 1989 Employment Insurance paid benefits to 74 per cent of the unemployed. By 1997 that number was down to 36 per cent, according to the Canadian Labour Congress.

Savings
The 40-year average of household savings had been 10 per cent up to 2002. In the fourth quarter of 2003 the household savings rate was 1.5 per cent of disposable income.

Debt
As a percentage of disposable income, debt has risen from 72 per cent of after-tax income in 1985 to almost 120 per cent in 2004. Credit card use and mortgage debt have both increased.

Poor Families
Among all families living below the poverty line, the average gap between their income and Statistics Canada's low income cut-off is $9,400 a year. That is, it would take a $9,400 raise to bring the average poor family's income up to the poverty line, according to Campaign 2000.

Food Banks
More than 330,000 Ontarians get some of their groceries from a food bank, according to the Ontario Association of Food Banks. That's 2.5 per cent of the population. One in five Ontario food banks is running out of food before it runs out of people at the door.

Children
In 2001 18.4 per cent of Canadian children lived below the poverty line.

CEOs
The average income of the 100 highest paid chief executive officers in Canada is $9,059,113 per year.

The Average Worker
The average salary of someone employed full time in Canada came to $38,010 in 2005.

Net Worth
The top 20 per cent of households owned 75 per cent of all household wealth in 2005, compared to 69 per cent in 1984.

Youth
The net worth of families in which the major earner was between the ages of 25 and 34 was an average of $13,400 in 2005, compared with $27,000 in 1984.

Direction
The median wealth of the bottom 20 per cent of Canadian families fell by 43 per cent between 1999 and 2005. The median wealth of the top 20 per cent of Canadian families increased 19 per cent between 1999 and 2005.

(Sources: Statistics Canada, Industry Canada, Canadian Centre for Policy Alternatives, Campaign 2000.)

In terms of income, the richest 10 per cent of Canadians earn 10.1 times as much as the poorest 10 per cent. The richest 20 per cent earn 46 per cent of all earned income in Canada, according to a March 2006 report from Statistics Canada.

As for chief executive officers, the richest 100 of them on average earn as much as the annual income of an ordinary wage earner ($38,010) in a little over a single day's labour, says the left-leaning Canadian Centre for Policy Alternatives.

If the booming payday loan industry isn't evidence enough, statistics also show Canadians are saving less and owing more. The Vanier Institute of the Family calculates average family debt at $70,920. As a percentage of disposable income, family debt is now 120 per cent of the money a family has to spend in a year.

Gross inequality between rich and poor has been a theological concern since the Old Testament prophets Isaiah and Amos harangued Israel's ruling classes centuries before Christ. The earliest Christian theologians — Clement of Alexandria, Tertullian and Origen among them — saw the moral decay of the Roman empire as the fruit of a growing chasm between rich and poor. They urged Christians to avoid employing too many servants, or indulging in grotesquely wasteful banquets and other displays of wealth.

At work in one of Toronto's poorest parishes, St. Paul's Basilica pastor Msgr. Brad Massman doesn't think Catholics have to be convinced the gap between rich and poor is a challenge to their faith.

"You don't have to be a theologian," Massman said. "All you need is some familiarity with Scripture."

Over and over, Jesus invites the poor into the kingdom of God before everyone else.

Massman has no trouble convincing rich people from outside his parish to help with the annual distribution of hundreds of Christmas baskets or funding the parish's before-school breakfast program.

For Sr. Margaret Freeley, who co-ordinates social justice work at St. Paul's, the Christian duty of charity was never intended to cover basic inequality. Governments are still responsible for lifting people out of poverty, she said.

"They don't want charity. They want a better life," said Freeley.

If theology perceives society as basically dysfunctional when rich and poor are living in completely different realities, so it is with a hardheaded, dispassionate look at the economy. You can't have a strong economy if average family finances are weak, according to the Vanier Institute for the Family's Robert Glossop.

"The gross, macroeconomic indicators may look quite healthy — and the Canadian government can be congratulated for wrestling inflation to the ground, and the tough medicine that everybody took during the 1990s, and so on and so forth — however, from the point of view of the kitchen table, from the household economy point of view, things are not nearly as rosy," he said.

At the same time as economic growth has been fuelled by increases in consumer spending, average salaries have stayed flat. Adjusted for inflation the average hourly wage of Canadians went up a total of 10 cents between 1991 and 2005, according to a Vanier Institute study. At the same time, the average number of hours worked per week dropped by an hour and a half.

So if Canadians have to actually work harder to earn the same money they made 15 years ago, where's the money coming from to buy plasma TVs and vacations in Mexico?

"The only way you can do that if you're balancing your books at the end of the month at the kitchen table is to forego savings, and sure enough we've had now for a prolonged period of time the lowest savings rate in Canadian history. And you've got the highest rates of debt," Glossop said.

Historically low inflation has kept the cost of borrowing down and encouraged people to take on more debt, buying and furnishing bigger houses. Should either inflation inch up or the value of people's houses slide, the consumer-driven economy could collapse, said Glossop.

A high-debt economy also tends to favour the rich over the poor. At least 95 per cent of families whose net worth puts them in the top 20 per cent own their home. Among the bottom 20 per cent, all but six per cent are renters.

In his encyclical Deus Caritas Est Pope Benedict XVI says that when rich and poor inhabit different worlds it violates the communion God intends for His church and for all people.

"Within the community of believers there can never be room for a poverty that denies anyone what is needed for a dignified life," the Pope wrote in his first encyclical.

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