People are “more likely to stay on the same rung of the income tax ladder and were less likely to move up or down relative to other taxfilers.”
Ottawa (15 July, 2019) — New information from Statistics Canada shows how growing income inequality means more people are getting stuck at the bottom of the economic ladder. According to a Statistics Canada release on family income mobility between 1982 and 2016, people are “more likely to stay on the same rung of the income tax ladder and were less likely to move up or down relative to other taxfilers.”
Rich staying rich, poor staying poor
In the 1980s, 32.5 per cent of people whose incomes put them in the lowest 10 per cent saw no improvement. By the 2011 to 2016 period that had increased to 38.3 per cent.
The situation is even worse for people whose incomes place them in the second lowest income group (the second income decile). 30 years ago, 60 per cent of people in the second lowest group saw their incomes increase relative to the average. By 2011 to 2016, only 46 per cent of people in the second lowest group were seeing an increase.
Even in the 1980s, those whose incomes were in the top 10 per cent had a good chance of staying there. But it’s become even more likely that the better off will hold onto what they have.
Between the 1980s and the 2008-2015 period, the percentage of people with incomes in the top 10 per cent who stayed in the top 10 per cent increased from 52 per cent to 57 per cent. That figure would likely be even higher if information was provided for the wealthiest 1 per cent.
Percentage of Canadians with falling incomes hasn’t dropped much since the recession
Between 2009 and 2014, when the impact of the 2008 downturn was being felt, 45.3 per cent of families saw their after-tax incomes drop in real terms. What’s worrying is that, even as the economy started to recover, that percentage hasn’t decline much.
Between 2011 and 2016, 42.13 per cent of Canadian families saw their incomes drop providing yet more evidence that the benefits of the economic gains of the last decade are not being equally shared.