TD report suggests gap between rich and poor has stabilized
Posted December 11, 2012 3:18 pm.
This article is more than 5 years old.
VANCOUVER (NEWS1130) – Surprising finds in a new report from TD Economics, regarding income inequality in Canada. It appears the gap between rich and poor has stabilized. However, that doesn’t mean conditions are improving for Canadians at the lower end of the income scale.
The report has determined that incomes for earners in the bottom 20 per cent of the workforce have risen more than any other wage bracket between 1998 and 2010. That is why it appears the gap between rich and poor is holding steady.
Economist Francis Fong with TD says the finding is based on the Gini Coefficient, a formula good for measuring economic performance between nations. He says it does not tell you how people live. “The average income in that cohort (bottom per cent) is still barely enough to meet a family’s basic needs, so they’re still struggling. That’s a key factor to keep in mind.”
Putting incomes in dollar terms tells a different story about the income gap. Between 1998 and 2010, income in the bottom 20 per cent increased by $2500, on average. For upper income earners, the increase is often measured in the 10s of thousands, despite the fact that their wages grew by a smaller percentage.
The new report also discovered that median incomes in Canada are now greater than what they are in the US. This reverses a trend that has held for several years. Fong says the recession of 2008 can take a lot of credit for this change, as Canada was not hit as hard as the US and the recovery on this side of the border has been stronger.
