Income gap widest in the West

Alberta and BC have the most unequal after-tax incomes in Canada.

by Gillian Steward

You don't have to look far in either Calgary or Vancouver to see glaring signs of the widening gap between rich and poor. Women push shopping carts full of bottles and cans past gleaming new condo towers. Men line up outside a homeless shelter in the shadow of the Calgary Tower.

Now that the Occupy movement has folded its tents and disbanded, the issue of income disparity has left centre stage. But it is still with us and a recent study by the Canada West Foundation found that disparity in Canada is most pronounced in Alberta and British Columbia.

Given all the economic activity in the West, especially Alberta, one would expect that all boats would be rising with the surging tide. And indeed, when only income from wages, investments and non-government sources is taken into account, income inequality in the western provinces is slightly lower than most other parts of the country.

 

 

The gap between rich and poor neighbourhoods in Calgary deepened dramatically between 1980 and 2005, far more than any other urban centre in the country.

 

However, the picture changes when two other factors are taken into account: taxes on take-home pay; and government support payments such as Employment Insurance, Old Age Security and social assistance.

"The redistributive effect of progressive taxation and government transfers in BC and Alberta is lower than anywhere else in the country. As a result BC and Alberta have the most unequal after-tax incomes in Canada," writes Michael Holden, an economist and author of the report.

The income gap has widened the most in British Columbia, which also has the distinction of having more poor people — about 12 percent of the population — than any other western province.

This growing gap is underscored by the fact that four out of five of the country's highest income cities are in the West. Calgary leads the pack with an average of $50,000 a year followed by Regina, Edmonton, Ottawa and Victoria.

But Calgary also leads the pack when it comes to inequality.

According to a 2011 study led by sociologist John Myles at the University of Toronto, the gap between rich and poor neighbourhoods in Calgary deepened dramatically between 1980 and 2005, far more than any other urban centre in the country.

The rich definitely got richer while the poor stagnated. Over 25 years, the mean after-tax income in Calgary's poorest neighbourhoods inched up by a mere 5 percent; while in the richest neighbourhoods, after-tax incomes increased by almost 75 percent.

Many of the people in the richer neighbourhoods have lucrative work with the oil industry or in a related field.

Most of the people in the neighbourhoods where income is stagnant are either unemployed or in low-paying, part-time, dead-end jobs. And while a generation ago people in those neighbourhoods, areas such as Forest Lawn and Falconridge, were confident they or their children would move up in the world, that is no longer the case.

Many of them, particularly immigrants, seem stuck.

A 2011 report prepared by social planners for the city of Calgary notes that there has been a rise in "precarious employment."

Women, recent immigrants, temporary foreign workers and ethnic minorities are much more likely to be engaged in precarious jobs. Young families with children are also at risk of being in low income employment.

Alberta still has the lowest minimum wage of all the provinces; Saskatchewan is the second lowest. Their overall economies may be growing faster than other regions of the country but this doesn't necessarily benefit everyone.

Many young people, for example, are stuck in low paying jobs while the cost of education keeps rising.

Of course, behind all the statistics there are real people trying to earn enough to pay for rent and groceries, hoping that somehow all the conspicuous wealth that belongs to others will somehow rub off on them.

The trends indicate otherwise. And that's what the Occupy movement was all about.

Here's hoping it hasn't completely faded away.

© Copyright 2012 Gillian Steward, All rights Reserved. Written For: StraightGoods.ca