The Chronicle Herald by Christine Saulnier and Jason Edwards 5 February 2013
Statistics Canada released new data last week on high-income trends in Canada, with barely a mention of the Atlantic provinces. The data told a story that was more striking for most of the rest of the country, and in particular for Alberta, Ontario, B.C. and Quebec, where 92 per cent of the top one per cent of tax filers are found, with only 3.4 per cent in Atlantic Canada.
The inequality that exists in Atlantic Canada also tells a story that demands some attention. The trends are troubling, but not surprising.
Are there things that we can be proud of in Atlantic Canada? Sort of. It is true that Atlantic Canada is less unequal than the rest of Canada (meaning the gap between the average income of the top one per cent versus the average income of the 90 per cent is the smallest). Moreover, Prince Edward Island has seen the smallest increase in the country of the ratio of the top to the bottom of Islanders. It is also true that the bottom 90 per cent in both Newfoundland and Labrador and P.E.I. made the greatest gains in the federation, with an increase in real income (adjusted for inflation) of almost one-third between 1982 and 2010. And the increases in income for the top one per cent in Nova Scotia and New Brunswick were some of the smallest increases in the country.
But let’s not be too complacent. P.E.I. might have the smallest gap increase, but the average income of the top earners is still eight times that of the bottom. Nova Scotia and New Brunswick saw modest income gains for the bottom 90 per cent of tax filers, but the income of the top one per cent increased twice as much. In Nova Scotia, the increases in real incomes were $3,500 for the bottom and $99,500 for the top. In 1982, the average top tax filers had incomes 8.3 times as much as the bottom. Now, the one per cent makes about 10.5 times as much. Saint John, N.B., continues to have the highest ratio of 12 times.
Part of the story emphasized by Statistics Canada was that women made significant gains across the country. In Atlantic Canada, women now make up 20 per cent of tax filers versus nine per cent in 1982. While it is certainly positive that women are being afforded the opportunity to occupy the ranks of the wealthy, this does not mitigate the deleterious effects of inequality. Women in the top one per cent, like the men in that group, benefit from an economic system that has clear gender biases. Whether or not a CEO is a woman, the low-wage workers she employs will still predominantly be women, thus ultimately reinforcing the gender wage gap. In 2010, women earned 73 cents for every dollar earned by a man in Atlantic Canada (for full-time full-year workers).
Concentrating power in the hands of a few, whether those hands belong to men or women, has a negative impact on our democracy and our society as a whole.
To be in the one per cent in Atlantic Canada, you need to have an income of at least $151,900, with an average income of $259,300. The average income of the bottom 90 per cent of tax filers is $26,700. The average income of the bottom 50 per cent is $13,600; this group accounted for 19 per cent of region’s total income. The one per cent accounted for seven per cent of the region’s total income.
Such egregious income inequality is bad for all Atlantic Canadians and has been recognized as an economic, political and social problem the world over.
The story told by StatsCan’s recent inequality data is not a good one. The upshot is that we have the capacity to change where this story will go next.
Instead of trying to grow our way to prosperity by incubating the one per cent, governments need to make smart decisions that benefit the bottom 90 per cent. We need a progressive tax system, where the wealthiest pay their fair share. With these funds, we can build strong social programs, so everyone is afforded a good quality of life and the opportunity to thrive. Austerity economics only exacerbates inequality.
Those societies that are more equal have been found to have some things in common, including strong unionization rates. We can learn from them, redress the imbalances, curb inequality and change the story of Atlantic Canada to one about mutual prosperity.