The income/wealth gaps between the rich and everyone else continues to grow. A recent report from the Canadian Centre for Policy Alternatives shows that Canada’s income gap between the rich and poor is growing, largely because the lion’s share of Canada’s economic growth is going to the richest 10% of families. It’s not going to the majority, the 80% of families earning under a $100,000.
The study, The Rich and the Rest of Us: The Changing Face of Canada’s Growing Gap, looks at the earnings and after-tax incomes of Canadian families raising children under 18, comparing families in the late 1970s and those in the early 2000s. The study finds:
* Canada’s income gap is growing: In 2004, the richest 10% of families earned 82 times more than the poorest 10% – almost triple the ratio of 1976, when they earned 31 times more. In after-tax terms the gap is at a 30-year high.
* Bottom half shut out: Between 1976-79 the bottom half earned 27% of total earnings. Between 2001-04 that dropped to 20.5%, though they worked more. Up to 80% of families lost ground or stayed put compared to the previous generation, in both earnings and after-tax terms. The poorest saw real incomes drop.
* Work is not enough: All but the richest 10% of families are working more weeks and hours in the paid workforce (200 hours more on average since 1996) yet only the richest 10% saw a significant increase in their earnings – 30%.
In the February 2007 issue of Z Magazine, Jack Rasmus describes how in the USA there is a $1 trillion income shift from the working classes to the rick every year.
The most telling statistic of what it all means comes from the U.S. Department of Commerce. It states that wages and salaries as of April 2006 constituted only 45.3 percent of GDP, a decline from 50.0 percent in 2001 and 53.6 percent in 1970. Furthermore, as the U.S. government estimates, “each percentage point now equals about $132 billion.” In other words, the roughly 8.3 percent drop in labor’s share by 2005 represents an annual shift in relative income today of about $1.09 trillion. That’s $1.09 trillion that now occurs every year—and it is rising.
That $1.09 trillion shift is equivalent to every one of 108 million non-supervisory workers in the U.S. today writing out a check each year, every year, for $12,100 and signing it over to the 24 million upper-class households—about 40 percent of which would go to the wealthiest 1.4 million families.
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