Earnings divide too great

It’s held as an article of faith in Canada that if we build a strong economy, with prosperous businesses and low personal tax rates, quality of life for everyone would generally rise.

It’s held as an article of faith in Canada that if we build a strong economy, with prosperous businesses and low personal tax rates, quality of life for everyone would generally rise.

For the nation, that’s an article of faith. In Alberta, it is the foundation of our culture. Rich oil companies, rich province. The more millionaires, the better.

No other region in North America has had as prosperous a run as Alberta over the past 25 years. In 1985, Alberta’s GDP was $66.1 billion. In 2009, GDP was $291.1 billion. These are figures adjusted for inflation. Alberta’s farmers, workers and businesses now produce well over $880,000 in goods and services per person per year.

We should be rich, wouldn’t you think? Well, in many ways, we are. But Alberta’s wealth is far from evenly distributed.

Last week, the Alberta College of Social Workers released a report, with assistance from the Parkland Institute, on the effects of the growing income gap in Alberta.

What happens to a province where wealth is growing rapidly, yet half the people share 82 per cent of all income earned, while the other half shares 18 per cent?

To give perspective, the “half” point is pretty good. Half of all wage earners make more than $58,000 a year. If that’s you, you’re above average — or rather, above the median.

That’s one of the points the social workers wanted to make. The median income may be $58,400, but the average (or mean) wage is $73,600. There are people making far more than the median, in order for the gap to be that large. And there are lots more earning far less.

The social workers’ report wants you to know the gap is growing. The number of people earning $100,000-plus as a ratio against those earning less than $40,000 has more than doubled since 1977.

That should mean there are a lot of rich people around. That should mean quality of life is going up; the rising tide should lift all boats.

But that hasn’t happened, says the report.

Albertans work longer hours than people in other OECD countries. We have the least amount of leisure time, and we lead Canada in family violence, domestic assaults, murder-suicide and stalking.

We have the least reported sense of connection to community, the lowest university enrolments, and the worst participation in elections.

Almost two-thirds of Alberta food bank recipients are in families where one or more members work full-time. More and more, Alberta’s community supports to the poor and vulnerable have been contracted to charities.

And while our middle class is working harder and harder, we feel like we are falling behind.

Meanwhile, the rich get steadily richer, giving Alberta a veneer of prosperity it does not deserve.

Obviously, an association of social workers would advocate for a greater investment in social programs. That’s in their report, too.

The government claims not to have the money. The social workers counter that if Alberta abandoned flat income tax and used a structure similar to the next-lowest taxed province, British Columbia, there would be $10 billion more in revenue for education, health and social programs — and we’d still have the lowest taxes in Canada.

It’s plainly evident that the tone and recommendations of the report run counter to the established culture of the province.

But there’s room to admit the article of faith that “wealth trickles down” should include a resolution that a healthier, happier society requires an activist government keeping the wealth gap from getting dangerously wide.

Greg Neiman is an Advocate editor.