A recent Statistics Canada release on wealth shows that inequality is alive and well in Canada. Echoing findings from our Poverty Trends Scorecard, income and wealth are increasing for many, but the poor are being left behind.
Figures from the February 25 release show that on average, the wealth of Canadian households is actually up despite the economic turmoil of the 2008-09 recession. The median net worth of households rose by 44.5 per cent from 2005 to 2012. And since 1999, median net worth is up by 80 per cent. Net worth refers to the amount family units would have if they sold all of their assets (cars, homes, stocks, etc.) and paid off all of their debts.
But to only focus on the median numbers misses what is happening on the margins, especially amongst the poor. By dividing family units into five groups, from lowest net worth to highest, with each quintile representing 20 per cent of all family units, we get a picture of how Canadians are doing across the wealth spectrum. The picture is troubling. The median net worth of households in the lowest quintile actually experienced a 15.4 per cent decrease from 1999 to 2005 and then remained stagnant until 2012. Meanwhile the median net worth of all four other quintiles rose substantially over this time. This is to say nothing about the stark difference between an actual net worth of households at the top and the bottom: a mere $1,100 for the bottom 20 per cent compared to $1,380,000 for the top 20 per cent.
One reason why median net worth for the top 80 per cent of Canadians has increased significantly is because those Canadians who own homes have seen their property values skyrocket. The median reported value of a primary residence increased from $163,800 in 1999 to $300,000 in 2012. Families at the bottom of the income scale tend to be renters - and as such, they haven't benefitted from the rise in housing prices experienced in the last decade.
Buying a house, saving for school, investing in a car to get a job, saving for retirement, and putting away the cash needed to weather unexpected expenses are all out of reach for poor households with little access to wealth.
These numbers shows us how poverty and inequality can exist in the presence of plenty. There is enough wealth for everyone to be a meaningful participant in our society and economy; being aware of such vast inequality is important as we consider how wealth can be distributed in a way that encourages wellbeing for all.
Nine out of ten Canadians (89 per cent) think that it's time for governments to tackle the problem of income inequality. So it's time. It's time for governments to take action to halt the runaway growth of incomes and wealth at the very top and to provide opportunities for all to live with dignity.
Originally posted at Citizens for Public Justice.
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