Wealth, income inequality rising: Study

April 28, 2008

TORONTO – Canada’s inequality in wealth and income is growing, and at a more rapid pace than before, says a new study released by the Canadian Centre for Policy Alternatives (CCPA).

The study, by economist Lars Osberg, looks at 25 years of income and wealth inequality in Canada and finds disturbing new trends.

“Between the Second World War and 1980, the economic pie was growing at all points in the distribution, even if income shares in Canada didn’t change much” says Osberg. “But today, there are very different trends for the top, the bottom and the middle 90% of the income distribution.

Growth in Canadians’ average real wages has been stalled since 1979 which, Osberg points out, is “a dramatic change from Canada’s historical experience”.

“A quarter of a century ago, circa 1980, someone who wrote about economic inequality in Canada was writing about a country in which real wages had been rising strongly,” Osberg says. “- but the ‘new normal’ for Canada’s middle 90% is for stagnant or declining real wages, despite unprecedented improvements in education and skills.”

Meanwhile, incomes for the richest 1% of Canadians have been growing very strongly, especially since the 1990s – with even greater gains going to the richest 0.1% and 0.01%. They are literally pulling away from the rest of Canadians.

And Canada’s disadvantaged face a much nastier reality now than twenty years ago, since cuts to social assistance have substantially increased the poverty gap – even in Canada’s richest provinces.

Osberg’s report, A Quarter Century of Economic Inequality in Canada: 1981-2006, is available at www.policyalternatives.ca and www.growinggap.ca.


For more information please contact: Trish Hennessy, director of the CCPA’s Inequality Project, (416) 263-9896.