All things being unequal

BCBusiness Online | Image: Dina Goldstein | Published: September 03, 2008

Some shocking numbers came out of Statistics Canada last May: the median wage of full-time workers in Canada has barely budged in 25 years. And B.C.’s performance was the worst of all the provinces: it dropped 11.3 per cent between 1980 and 2005 and, more surprisingly, dropped 3.4 per cent between 2000 and 2005. And 2007 figures show that B.C. has proportionately more people classified as low-income than any other province – a distinction we’ve held for eight years running.

But wait a minute. Weren’t those boom years? Isn’t that when the province became chock full of Olympics projects, help-wanted signs, containers and construction cranes? To the casual observer, it doesn’t make any sense. And together with rising costs for housing, food and fuel, it raises some serious questions about our standard of living.

We invited three experts to explain what’s going on. Craig Riddell (centre) is a professor specializing in labour issues at UBC’s Department of Economics. Roslyn Kunin (right) is an economics consultant who serves as chair of WorkSafeBC as well as senior fellow and director of the Canada West Foundation, a Calgary-based think-tank. Iglika Ivanova (left) is an economist with the Canadian Centre for Policy Alternatives (CCPA) specializing in public interest research.

Craig, what do last May’s census numbers tell us?

CRAIG RIDDELL: I would point to two key developments in the last 25 years. One is that, if you take the person in the middle of the earnings distribution, the real earnings haven’t changed much in Canada, if at all, and then for B.C. it’s actually fallen. The second part is that the inequality of earnings has been growing over the last 25 years. The real earnings of the people at the top have gone up something like 20 per cent; the real earnings of the bottom 20 per cent have gone down again by something like 20 per cent. So we have these two quite stark developments: no improvement in the standard of living for the average worker and greater inequality in earnings among workers in Canada.

ROSLYN KUNIN: But I think that we have to define earnings. Earnings are wages and salaries but not total income: it doesn’t include transfer payments, investment income or

retirement income. So if we look at income as opposed to earnings, we get a different pattern. We see that real income has risen – very modestly in B.C., but it has risen. And the distribution has improved in the sense that, when we look at total income, it hasn’t turned against the people with low income.
We’re also seeing a very old population, with the median age somewhere around 45, so we have an awful lot of older workers. They are beginning to think about working less and are beginning to shift their income, from earned income to other sources, and I think this is one of the big factors reflected in the changing pattern of median earned income.

IGLIKA IVANOVA: To clarify, these numbers are for full-time, full-year workers. So these aren’t the people who choose to work part-time or work only part of the year and spend the rest of the time on vacation in Mexico. These are people who in 2005 worked all year, full time, and 20 per cent of them made less than $15,000 a year. So sure, if we add income support from the government, their position is much better. But do we really think people who work full year, full time should rely on income support to get out of poverty? Because $15,000 is less than the low-income cut-off, even in rural areas and certainly in Vancouver. I agree that when looking at after-tax income, the inequality is smaller. However, if you compare B.C. to the rest of Canada, we are still at the bottom of the pack. So it’s dangerous to look at B.C. in isolation, without weighing it against the rest of the provinces.

So how do we compare to other jurisdictions?