The article you just read was brought to you by a few thousand dedicated readers. Will you join them?

Thanks for coming by The Tyee and reading one of many original articles we’ll post today. Our team works hard to publish in-depth stories on topics that matter on a daily basis. Our motto is: No junk. Just good journalism.

Just as we care about the quality of our reporting, we care about making our stories accessible to all who want to read them and provide a pleasant reading experience. No intrusive ads to distract you. No paywall locking you out of an article you want to read. No clickbait to trick you into reading a sensational article.

There’s a reason why our site is unique and why we don’t have to rely on those tactics — our Tyee Builders program. Tyee Builders are readers who chip in a bit of money each month (or one-time) to our editorial budget. This amazing program allows us to pay our writers fairly, keep our focus on quality over quantity of articles, and provide a pleasant reading experience for those who visit our site.

In the past year, we’ve been able to double our staff team and boost our reporting. We invest all of the revenue we receive into producing more and better journalism. We want to keep growing, but we need your support to do it.

Fewer than 1 in 100 of our average monthly readers are signed up to Tyee Builders. If we reach 1% of our readers signing up to be Tyee Builders, we could continue to grow and do even more.

If you appreciate what The Tyee publishes and want to help us do more, please sign up to be a Tyee Builder today. You pick the amount, and you can cancel any time.

Support our growing independent newsroom and join Tyee Builders today.
Before you click away, we have something to ask you…

Do you value independent journalism that focuses on the issues that matter? Do you think Canada needs more in-depth, fact-based reporting? So do we. If you’d like to be part of the solution, we’d love it if you joined us in working on it.

The Tyee is an independent, paywall-free, reader-funded publication. While many other newsrooms are getting smaller or shutting down altogether, we’re bucking the trend and growing, while still keeping our articles free and open for everyone to read.

The reason why we’re able to grow and do more, and focus on quality reporting, is because our readers support us in doing that. Over 5,000 Tyee readers chip in to fund our newsroom on a monthly basis, and that supports our rockstar team of dedicated journalists.

Join a community of people who are helping to build a better journalism ecosystem. You pick the amount you’d like to contribute on a monthly basis, and you can cancel any time.

Help us make Canadian media better by joining Tyee Builders today.
We value: Our readers.
Our independence. Our region.
The power of real journalism.
We're reader supported.
Get our newsletter free.
Help pay for our reporting.

BC's Rich and Poor: A Gap Pried Wider

Government fostered the divide. Now it reaps expensive social woes. Third of four on 'BC's Broken Economy.'

By Kim Pollock 16 Jul 2009 |

Series author Kim Pollock is a Canadian research representative for United Steelworkers, based in Burnaby. He lives in Vancouver. He dedicates this series to the memory of the late H. Keith Ralston, British Columbia historian, UBC professor and long-time B.C. social activist, including one-time editor of the United Fisherman and Allied Workers newspaper, "a good friend and mentor."

image atom
Inequity has been built into BC's economy. Photo by The Blackbird.

The recent deterioration of B.C.'s economic fundamentals has very real consequences for the way British Columbians live. The growing income gap between rich and poor and the stagnation of real wages is behind many of the mounting social problems we face in our communities.

It's true that British Columbians have seen modest real-income growth per capita in the past eight years. From 2001 to 2008, inflation-adjusted income per capita rose by 2 per cent per year from $32,727 to $37,477, reports BC Stats. However, as we shall see, much of the statistical rise in income was illusory, in the sense that much of it was in fact captured by already wealthy individuals. Looking at the income-growth figures alone masks serious emerging problems.

Income distribution

The gap between the rich and poor in Canada widened significantly in the past ten years, partly because Ottawa spent less on cash benefits than many other developed countries, as the Organization for Economic Co-operation and Development reported in March.

It was a reversal of the trend over the two previous decades when the gap was narrowing, the OECD report said. It said Canada's poverty and income inequality rates both spiked between 1995 and 2005 and now each exceeds the 30-member organization's average. The organization said Canada experienced an especially rapid rise in both poverty and inequality; only Germany's gap widened at a comparable rate.

The study also found that Canada's well-to-do enjoyed a more substantial income than their counterparts in other developed countries. The report said Canadians in the top 10 per cent income bracket were earning an average equivalent to $US 71,000, more than 30 per cent higher than the OECD average of $US 54,000.

A Canadian Centre for Policy Alternatives study released about the same time showed that the situation in B.C. is even worse. "The gap between the wealthiest and the majority of B.C. families has grown dramatically over the past 30 years," CCPA economist Iglika Ivanova wrote, noting that the share of income going to the richest 10 per cent of families has grown fast, while the share going to the bottom half of families has declined substantially. This is true for both earnings and after-tax incomes.

Not only has inequality grown, adds Ivanova, but most B.C. families with children have also fallen behind in absolute terms. The bottom 70 per cent of families have lower real (inflation-adjusted) earnings than their counterparts in the late 1970s, and the bottom 60 per cent saw a decline in their after-tax incomes as well. And middle-class families in B.C. have been squeezed to an extent not seen in other provinces, she notes.

Just as the OECD found for Canada as a whole, Ivanova found that government taxes and transfers reduce labour-market inequality in B.C. somewhat -- but not nearly as well as it used to. "When we examine after-tax income instead of earnings, the benefit of the tax and transfer system becomes clear for the poorest 10 per cent of families with children: they are no longer the ones who experienced the largest drop in income," Ivanova notes. "While their earnings fell by a staggering 74 per cent over the 30-year period, their after-tax incomes declined by only 4 per cent."

However, she adds, the tax and transfer system in B.C. fails to adequately help the rest of the bottom half of families, whose after-tax incomes declined considerably. In fact "drops in real after-tax incomes are substantially larger in B.C. than in any other province. That is, whereas other provinces have managed to offset declines in earnings through the system of government transfers and taxes, B.C. has been much less successful."

We can see clearly the result of the Gordon Campbell tax cut and other income-distribution programs, in other words. After the tax cuts, only the top 30 per cent of families earned more than had their counterparts in the late 1970s; the gains were highest for those who were better off to begin with. The top 10 per cent benefited the most as their average earnings rose by 29 per cent from $152,374 to $196,457 between the late 1970s and the mid-2000s, says the CCPA.

The gap between rich, lower-income and working British Columbians was in fact heightened by the Campbell tax cut of June 2001 and subsequent policies, for instance the so-called "carbon tax". The 2001 cut gave the 13 percent of taxpayers making more than $60,000 about 52.8 percent of the total tax savings.

At the very top of the income ladder, the 1.1 per cent of taxpayers earning over $150,000 got a whopping 20 per cent of the total savings.

Meanwhile those earning under $30,000 -- 48.4 per cent of all taxpayers -- shared among them just 13.4 percent of the tax-cut benefits.

Real wages

Average hourly inflation-adjusted earning for all employees increased by just 1.3 per cent in B.C. from 1998 to 2007. But while workers' pay actually fell, managers got substantial increases. Management occupations saw a 13.4 per cent rise in average hourly pay. Workers in manufacturing received a pay cut of 7.1 per cent, while those in sales and service jobs saw a 1.1 per cent drop in their hourly pay.

And with the loss of thousands of jobs in manufacturing and resource industries, it's unsurprising that the number of good jobs also declined. The number of jobs paying between $20 and $29.99 an hour actually fell, even though the size of the workforce increased.

The widening income gap between those at the top of society effectively transforms into a social problem the economic problems of falling productivity, declining exports, a deteriorating manufacturing base and growing dependence on oil and gas and a few unprocessed commodities.

This shift is in fact at the root of the growth in poverty and the growing inequity being built into B.C.'s economy today.

Tomorrow, last in this series: How government policies that weakened B.C's economy are, as a result, harming a key asset in the global economy, our vaunted 'quality of life'.  [Tyee]

Share this article

The Tyee is supported by readers like you

Join us and grow independent media in Canada

Facts matter. Get The Tyee's in-depth journalism delivered to your inbox for free


The Barometer

Tyee Poll: What Coverage Would You Like to See More of This Year?

Take this week's poll