Report documents staggering growth in social inequality in Canada

                    By Lee Parsons
                    A report issued by the Centre for Social Justice, a think tank supported
                    by church, union and community groups, documents a staggering growth
                    in social inequality in Canada over the past quarter century and especially
                    the past five years.

                    Titled "The Growing Gap" and written by economist Armine Yalnizyan,
                    the report presents a vast array of data, most of it gleaned from
                    government studies, to substantiate its claim that increasing numbers of
                    Canadians are being driven into poverty, even while the rich have seen
                    their incomes and wealth soar.

                    Amongst the most telling statistics:

                    * In 1996, the average market income (that is income derived from
                    wages, dividends, rents, etc., as opposed to state benefits and tax
                    credits) of the richest 10 percent of Canadian families having children
                    under 18 was 314 times greater than that of the poorest decile of

                    * Newspaper proprietor Ken Thomson's net personal wealth of $14.4
                    billion surpasses the collective wealth of the poorest third of all Canadian

                    * In the three years, between 1995 and 1997, the average Canadian
                    CEO had a 39 percent salary increase--while workers' wages grew on
                    average by no more than 2 percent, or less than inflation.

                    * In 1997, the compensation of the top 100 Canadian CEOs rose on
                    average by 56 percent.

                    Ten of these CEOs earned more than $10 million and Robert Gratton of
                    Power Corporation received a total pay package, including bonuses and
                    stock options, of $27.4 million.

                    * Although women's participation in the labour force has risen sharply,
                    60 percent of families with children are earning less in real terms than they
                    did in 1981.

                    The Growing Gap is principally concerned with documenting the extent
                    of the social polarization, but it also shows how the dismantling of
                    unemployment insurance and other government programs has contributed
                    to the widening and deepening of poverty. The last third of the 100-page
                    report advances solutions to what Yalnizyan contends is a social
                    imbalance so severe it could soon engender social unrest.

                    The report observes that the corporate and political elite's glorification of
                    the capitalist market has had the effect of lessening public awareness and
                    concern about growing social inequality, and suggests that this has even
                    impacted on the type of information Statistics Canada collects. Whereas
                    formerly Statscan carried out surveys of wealth and indebtedness roughly
                    every five years, the last was conducted in 1984.

                                   Distribution of market income

                    The phenomenal increase in the difference between the market income of
                    the top and bottom decile of Canadian families with children--in 1973 the
                    top 10 percent earned 21 times more and in 1996 314 times more--is
                    due mainly to two interrelated processes. Large numbers of poor people
                    have been driven out of the work force by an unrelenting wave of
                    corporate restructuring; the rich are appropriating an ever-greater share
                    of the national income.

                    "In 1989," says the report, "the average market income of families in the
                    bottom 10% of society was around $4,000. By 1996, the average had
                    fallen to less than $500 a year."

                    Whereas in 1973 3.7 percent of families had no wage earner, by 1996
                    the number was 8.4 percent.

                    Meanwhile, the income of the corporate elite has swelled to the point that
                    the average CEO earns 48 times more than the average worker.
                    Between 1989 and 1996 the number of millionaires in Canada tripled,
                    and that number is expected to triple again by 2005.

                                     The "new generation gap"

                    The report also documents changes in the composition of the work force
                    and wage differences between generations.

                    About one in five jobs is part-time, as compared with one in ten 20 years
                    ago. In the 1990s the fastest growing segment of the labour market has
                    been temporary, contract and seasonal employment, which have risen
                    from 5 to 12 percent of all jobs.

                    The other major change in the composition of the labour force has been
                    the rapid growth in self-employment brought about by downsizing and
                    the outsourcing of work. "Of the million plus jobs added to the labour
                    market this decade," writes Yalnizyan, "over half have come from
                    self-employment--accounting for 76 percent of the job growth in 1996
                    and 83 percent in 1997. This type of employment varies widely in the
                    reward it brings and diverges significantly from the waged and salaried
                    population. 16 percent of the self-employed made less than $5,000 in
                    1996 compared to 3 percent of paid employees and 2.3 percent made
                    over $100,000 compared to 1 percent of the waged."

                    Canadians still work an average 37-hour week as they did a generation
                    ago, but "the difference is that a generation ago the majority of people
                    worked those hours.... In 1976 almost two-thirds of Canadians (65
                    percent) worked between 35 and 40 hours a week. By 1997," as a
                    result of the spread of part-time employment and increasing amounts of
                    overtime--much of it unpaid--"only about half did (54 percent)."

                    Young people--especially young males--have been the hardest hit by
                    these changes. "While all age groups saw some loss in earnings between
                    1990 and 1995, the youngest group--aged 15 to 24--experienced a 20
                    percent drop. In both 1970 and 1980 young people, on average, earned
                    about half the overall national average. By 1995 they made less than a
                    third of the national average (31 percent)."

                    Warning of an "emerging generational faultline," the report observes that
                    "men under the age of 35 have seen a remarkable, perhaps
                    unprecedented erosion in what their work is worth compared to older
                    age groups and compared to what under 35-ers were worth in 1980."

                      Disappearance of middle-income earners and assault on social

                    Central to the report's findings about social polarization and warnings of
                    potential social unrest is the hollowing out of those whose incomes fall in
                    the median between rich and poor. Based on a comparison of market
                    incomes in 1973 and 1996, the report shows that 17 percent of the
                    population had earnings in 1996 that in real terms would have put them in
                    the poorest decile in 1973. Similarly, 18 percent of Canadians had
                    earnings in 1996 that would have placed them in the top 10 percent in
                    1973. "By 1996 the earnings bracket that used to account for 60 percent
                    of the population held only 44 percent of Canadian families with
                    dependent children."

                    The Growing Gap underscores both the significance of income
                    transfers--social benefits and tax credits--to large segments of the
                    population and the potential for widespread pauperization as
                    governments at all levels restrict eligibility and slash social benefits.

                    In 1996 income transfers raised the average income of the poorest fifth of
                    families by some $11,000, from just under $6,000 a year to almost
                    $17,000. But since then the federal Liberal government has drastically
                    reduced eligibility for unemployment insurance. "In 1990 almost all
                    unemployed Canadians received UI benefits (87 percent of the jobless).
                    This proportion had dropped to 42% by 1997 and is still falling in 1998."

                    Yalnizyan goes to some length to portray Canada as a historically more
                    equitable society than the US and other advanced capitalist countries. In
                    truth, while in the 1980s the Canadian bourgeoisie was more wary than
                    its US counterparts in imposing wage cuts and gutting social programs,
                    that lag has been more than made up for in the big business offensive of
                    the 1990s. Contrary to the myths of the Canadian nationalists, Canada
                    has historically been characterized by great social inequality and the
                    polarization of corporate ownership in the hands of a very few.

                    A believer in the possibility of regulating the capitalist market and reviving
                    the welfare state, Yalinizyan is at a loss to explain the cause of the current
                    social polarization. Her report is very much to raise an alarm to the ruling
                    class that the deepening polarization will propel working people toward
                    radical political alternatives. The Growing Gap also presents a brief for
                    the trade unions and social-democratic New Democratic Party urging big
                    business to restore their role in "balancing" market forces.

                    Much of the deepening of poverty and unprecedented social polarization
                    detailed in this report have taken place during a period of so-called
                    economic recovery. If those in positions of power and privilege to whom
                    this report appeals would not and could not relent in their assault on the
                    social position of the working during such a period, what can be
                    expected of them when the economy enters a new downturn?