>X-Sender: [EMAIL PROTECTED] >Date: Thu, 27 Jan 2000 17:42:39 -0500 >To: [EMAIL PROTECTED] >From: Bob Olsen <[EMAIL PROTECTED]> >Subject: Poor get poorer, rich not so rich >Mime-Version: 1.0 > > > > > First an announcement, then a news report. Read on! > > >From: "Ann Curry-Stevens" <[EMAIL PROTECTED]> >To: "Bob Olsen" <[EMAIL PROTECTED]> >Subject: Press release on growing gap in Canada >Date: Thu, 27 Jan 2000 09:13:59 -0500 > > > >Inequality Rises As More Families Slide To The Bottom Of The Income >Scale Tax cuts don’t address economic reality says new report > >January 27, 2000 – Canadian families have fallen towards the bottom >of the income scale over the course of the 1990s, and the odds of >“getting ahead” have all but disappeared says a new report released >today by the Centre for Social Justice. (Toronto) >http://www.socialjustice.org/textindex.html ><[EMAIL PROTECTED]> > >Canada’s Great Divide: the politics of the growing gap between rich >and poor in the 1990s by economist Armine Yalnizyan charts the >startling results of the decade’s “grand social experiment” as >governments put the emphasis on “more market, less government.” > >Despite economic growth over the last decade, inequalities have grown. >There has been a dramatic surge in the proportion of families who have >ended up at the bottom of the income scale. Surprisingly, the >proportion of families in the middle and at the “top” actually fell >between 1989 and 1997, as did their average incomes. Cuts to >transfers and taxes further fueled the growing gap. > >“We are witnessing a slide to the bottom, with fewer opportunities to >get ahead. These are not the results that we were led to expect from a >more vigorous pursuit of market solutions over the ‘90s,” says Armine >Yalnizyan, author of the report. “By any measure, there are more poor >families and they are poorer than ever. ” > >In 1989, 30 per cent of families registered an after-tax income of >less than $35,038. By 1997, more than 37 per cent of families found >themselves in this income bracket. > >The poorest 10 per cent of families fared the worst. In 1989, this >group had an average after-tax income of less than $15,596. In 1997, >their after-tax income had fallen to an average $13,806. > >With incomes this low, says Yalnizyan, proposed federal tax cuts will >not reach the poorest Canadian families. She cautions against a >tax-cut approach of “giving back to Canadians” which leaves a large >number of families out in the cold, and does not address escalating >concerns about cut-backs to social programs and services. > >“Tax cuts aren’t the solution because taxes aren’t the problem,” >Yalnizyan says. “Tax policy is not a substitute for social policy. >A tax cut will not buy us better hospital emergency services when we >need them. A tax cut will not keep our kids’ schools from closing. >A tax cut won’t raise the incomes of the poorest Canadian families who >don’t have taxable incomes.” > >The report examines the critical role of political choice in shaping >the growing gap, highlighting the outcome of two distinct periods over >the 1990s – recession and recovery. > >. . . / 2 > >Inequality Rises As More Families Slide To The Bottom Of The Income >Scale Centre for Social Justice /2 > > >During the recessionary period of 1989 to 1993, the gap between rich >and poor grew in market terms, but government actions helped close the >after-tax gap despite tough economic times. The opposite trend >occurred during the recovery period of 1994 to 1997. Average market >incomes improved for all income groups, including the poorest, closing >the market gap; but in after-tax terms the gap grew at the most rapid >rate it has since the 1970s, when we first started tracking trends in >income inequality. The growing gap in after-tax incomes can in part be >traced to governments pulling back from key income supports to Canadian >families such as Unemployment Insurance and social assistance. > >The report also tracks income disparities in the provinces over the >1990s, again with surprising results. There were significant >differences in rates of economic growth and decline across the country, >but economic growth did not always translate to reductions in income >inequality. In the final analysis, the state of inequality was more >likely to correspond to choices of the governments in power than >economic circumstance. > >“This trend in sliding family incomes has devastating implications. >Our odds of achieving greater prosperity or simply greater financial >security have dropped – let alone the odds facing our children,” says >Yalnizyan. “The promise of prosperity through tax cuts plays on that >sense of insecurity. But tax cuts will not reverse this economic trend, >nor address the erosion of services. As poll after poll has shown, >Canadians are looking for a new direction from their governments, one >that will increase their security and well-being.” > > >For more information, please contact: >Andrea Imada, Centre for Social Justice >416-927-0777 or 1-888-803-8881 >...................................................................... > > > > Toronto Star January 27, 2000 > > Back Issues Poor get poorer, rich not so rich > > New report shows all Canadian incomes > [Image] declining > > By Elaine Carey > [Image] Toronto Star Demographics Reporter > > [Image] Most Canadian families are slipping down > [Other Links] the income ladder, and the odds of > [Image] climbing up have all but disappeared, a > new report says. > > ``We are witnessing a slide to the bottom, > with fewer opportunities to get ahead,'' > says the report's author, economist Armine > Yalnizyan. > > During the '90s, the proportion of > families at the bottom income level surged > dramatically, while the proportion in the > middle and top income categories has > dropped - along with average after-tax > incomes. > > The ``grand social experiment'' of the > '90s - to emphasize market solutions over > government intervention in the economy - > has been a dismal failure, concludes the > study released today by the Canadian > Centre for Social Justice, an economic > think tank. > > ``The promise of the last generation was, > `If you work harder you'll get ahead,' '' > Yalnizyan said in an interview. ``But over > the '90s, the restructuring of the > workplace is such that economic growth > does not translate into more prosperity > for the vast majority of Canadians.'' > > In 1989, 30 per cent of families had an > income of less than $35,038 after taxes. > But in 1997, after adjusting for > inflation, a full 37 per cent had less > than that threshold. > > The number of families at the very bottom > of the economic ladder grew even faster. > The poorest families - those earning less > than $11,567 after taxes and transfer > payments - swelled from 10 per cent of all > families to 14 per cent. The earned income > in this group dropped from an average > $3,731 to $1,255. > > ``By any definition of poverty, the poor > are getting poorer, and there are more > poor families among us,'' concludes the > study, funded by the Atkinson Foundation. > > The rich aren't getting richer, either. > The top 10 per cent of families had an > average income of $144,700 in 1989. In > 1997, they earned about $8,300 less. But > rich families lose proportionately less > when bad times hit and are the first group > to benefit from a recovery, the report > says. > > Tax cuts aren't the answer, because taxes > aren't the problem, Yalnizyan said. Cuts > don't help the growing number of poor > families who don't have enough income to > tax, and reduced government revenue means > basics like health care and education > suffer. > > The report is a follow-up to a study > released 15 months ago that exposed a > growing gap between the rich and the poor. > > This study found two distinct phases in > the decade. During the 1989-1993 > recession, the income gap between rich and > poor grew. But government actions closed > the after-tax gap. > > The opposite happened during the 1994-97 > recovery period. While average income went > up, the after-tax gap between rich and > poor grew at the fastest rate since the > '70s. > > Ontario has the biggest gap between rich > and poor, and that disparity has widened > faster than elsewhere. > > Cuts in taxes and transfer payments since > the mid-'90s have benefited only the > richest 10 per cent of families - the one > group with a lower income-tax rate in 1997 > than in 1994. The poorest 10 per cent, > meanwhile, paid more taxes and got fewer > income supports. That led to a net loss of > 12 per cent in average after-tax income - > the biggest loss of any income group - > mainly because employment insurance and > welfare were reduced. > > ``Getting tough on the poor didn't seem to > help anybody,'' Yalnizyan said. ``At the > same time, we're stripping the social > services that make life a lot more secure > for everyone.'' > > Families are working harder and earning > less in real dollars, which ``fuels a > sense of desperation that, `The only way > I'm going to get ahead is by tax cuts,' '' > she said. ``At least, that's how it's been > spun.'' > > What's needed instead, the study > concludes, is job growth, better wages, > family services and supports for the > poorest families. > > > Contents copyright © 1996-2000, The Toronto Star. > http://www.thestar.com/editorial/news/index.html > > > ............................................. > Bob Olsen, Toronto [EMAIL PROTECTED] > ............................................. >
