In case you don’t already feel the gap between rich and poor growing in your bones, a new paper on inequality in Canada says rich people have been getting vastly richer for decades while the rest of us are getting increasingly pessimistic about our financial prospects.
According to research Dalhousie economist Lars Osberg presented at a recent Canadian Economics Association conference, the top one percent of earners have seen incomes surge since 1980, while the middle 60 to 80 percent are working longer hours for barely-existent wage increases.
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Osberg set out to find why fewer and fewer Canadians consider themselves “middle class.” Since the year 2000, the self-identified group has shrunk by a third.
Osberg found Canada’s economy grew by 55.9 percent, about $20,000 per person, but saw a “very large difference” between the growth at the top and growth in the middle. “There hasn’t been much of an improvement or any improvement for the middle class,” he told VICE.
It turns out the bottom ten percent of earners have actually seen their incomes decrease two percentage points since 1980, the middle half have seen a slow 11 percent raise, and the top one percent are pulling in an extra 55.7 percent more income.
It gets worse when you see it broken down by hourly wage. The richest one percent are making over $40 more an hour, while the middle 50 percent are making an extra $2.70. When adjusted for inflation, the bottom ten percent are actually making 24 cents less than in 1980.
Then there’s the top 0.1 percent, who are making an extra-extra $189.53 per hour.
Worse still, according to Osberg, is that the middle class are working more hours to stay at those stagnant income levels. “There was a time when a one income family was the norm, but that hasn’t been the case,” he told VICE. “So a lot of what’s propping up household incomes is the fact that there’s two incomes—both working full time. That’s a much more stressed, time-squeezed lifestyle.”
Osberg says Canada’s economy is headed for minimal-to-modest growth now that our resource boom has slowed, so the chances of the middle class “catching up” are already slim. And, with capital now moving to an inflated housing market that favours people with millions to burn, he’s not so optimistic that things will turn around anytime soon.
“The question is whether Canada’s political and economic elites will recognize in time that something has to change or whether they will continue working within the same policy framework.”
Consider yourselves warned, “elites.”
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