Growing Gap Between Wealthy and Poor in Canada
Labour Standards Keep the Poor Down, Reducing Size of Middle Class
Jul 31, 2008
A recent report shows there is a growing gap in wealth between the top 10% of earners and the bottom 10% and the middle class is declining. This is a warning sign to our political leaders. If total earnings in Canada were divided into a pie with 100 pieces, the top half of the population took almost 80 pieces of this pie, while the lowest 10% took only 2.6 pieces, which is a decrease from 4.5 pieces thirty years ago. While the report in itself may not point to the cause of this trend, other research shows that labour is in dire need of reform.
As the manufacturing sector continues to shed jobs at a record pace, a growing number of Canadians work in unstable, insecure jobs that are lower paid and have few or no benefits. In 2006, the average hourly wage for autoworkers was $31.30, while the average wage for service sector employees was $10.50 per hour. Further, according to a May 2006 report of the Task Force on Modernizing Income Security for Working-Age Adults, only 22% of laid-off workers were able to collect Employment Insurance in Toronto, while Canada-wide, this eligibility was about 35%.
As a result of declining eligibility for Employment Insurance, more laid-off workers are forced to dip into their savings or apply for social assistance, putting more pressure on municipalities and provincial social programs that have limited budgets. With downloading of social services and housing programs to cities and towns by the previous government in the late 1990’s, flexibility in dealing with this influx of need is limited.
In its continued state of denial, the provincial government still insists the labour market is the best place to fight poverty. In a May 2008 report by a coalition including the Canadian Labour Congress (Ontario Region), Toronto & York Region Labour Council and Campaign 2000, the key fact is that good jobs are disappearing and being replaced by short-term, low-paying service sector jobs. As many families have learned, working is not enough to escape poverty. Forty-one (41) percent of children in low-income families have at least one parent who works full-time all year round, and at least seventy (70) percent of low-income children in Ontario live in families where at least one parent participated in the paid labour force within the past year.
In Canada, half of all jobs created between 1980 and 1988 were not traditional, stable full-time jobs and by 2002, only 63% of jobs in the current labour force were full-time and permanent positions. According to the authors of the May 2008 report, the total number of “good jobs” are declining year over year. Between 2001 and 2006, over 450,000 service sector jobs were created, while 77,690 manufacturing jobs were lost.
Economic shifts from manufacturing and resource-based employment to the service industry has significantly led to a downward shift in real incomes, leaving the so-called middle class no further ahead than they were several years ago, while others are leaving the middle class to lower-income working classes, often having to take two or three jobs at a time to cover living costs.
Government and industry leaders need to stand up and take notice that this is not an acceptable trend, particularly if they want to see economic growth and productivity increase into the twenty-first century. Where will businesses -- the backbone of our economy -- obtain the resources they need to grow when less and less people are able to spend money at their shops or eat at their restaurants?
This is a question that is begging for an answer.
