Past 30 years not kind to families; Study shows 60 per cent of households with children under 18 have lower earnings than their '70s counterparts
Vancouver Sun
March 11, 2009
By: Doug Ward

Even before the recession hit British Columbia, a majority of families in the province were worse off financially than their parents' generation in the late '70s, a new report says.

The study, released Tuesday by the Canadian Centre for Policy Alternatives, found that 60 per cent of families with children under 18 have lower (inflation-adjusted) earnings than their counterparts three decades ago.

"People have been talking for years about finding it hard to get ahead," said CCPA economist Iglika Ivanova. "These figures show that it's true."

The study, B.C.'s Growing Gap: Family Income Inequality 1976-2006, also found that income disparity in B.C. has grown to the point where the pre-tax earnings of the top 10 per cent of families is now more than that of the entire bottom half of families.

The CCPA, using income figures provided by Statistics Canada, found that real earnings (before taxes and transfers) in B.C. declined between 1976 and 2006 for the bottom 60 per cent of families with children.

Only the top 30 per cent of families earned more than the previous generation in the late '70s, with gains being higher for those who were already among the wealthiest, said the report.

While recent media reports have noted that B.C.'s poor are getting poorer, "our study shows that the middle class is vulnerable too -- and much more than in the rest of Canada," Ivanova said.

The CCPA study found that the drop in earnings in B.C. reflected the overall Canadian trend in Canada -- but that the decline in real after-tax incomes (which includes government transfers) was more acute in B.C.

In fact, unlike B.C., most other provinces did not see a decline over the past three decades in real after-tax income, Ivanova said.

B.C. has been less successful than other provinces in compensating for declines in earnings through government transfers and taxes, the CCPA report concluded.

"So after tax-redistribution, we don't see the same decline in income in other provinces as we see in B.C.," Ivanova said.

The CCPA report focused on families with children under 18, which make up nearly half of B.C.'s population. The group's findings were similar to published reports last year about how British Columbians, according to 2006 Census data, have less spending power than they did 25 years ago.

… CCPA recommends that the provincial government try to reduce income inequality by redistributing income through taxes and transfers….