Canada’s rich are getting richer relative to ordinary Canadians, according to a recent study.
The gap between the income of the top 0.01 percent of Canadians and the median Canadian income has more than tripled since the 1970s, according to research by Michael Veall, a professor of economics at McMaster University, and Statistics Canada figures.
The average income of the richest 0.01 percent of Canadian taxpayers is now 142 times the median Canadian income.
The chart below combines Veall’s numbers and Statistics Canada data to illustrate the difference between the incomes of the richest one percent, 0.1 percent, 0.01 percent and the median Canadian income.
In adjusted dollars, the median market income of Canadian earners as reported by Statistics Canada has decreased slightly over the years, from $31,778 in 1976 to $31,044 in 2008. But the average income of the richest 0.01 percent of Canadians grown significantly – from $1.3 million in 1976 to $4.4 million in 2008.
The wealthy also receive a disproportionate share of income relative to their numbers, and that share is growing.
Statistics Canada numbers show that the share of income received by the top one percent of Canadian earners increased from 7.4 percent in 1982 to 12.3 percent in 2007. That number has since declined due to the recession, so that in 2009, the top one percent of tax filers earned 10.9 percent of all the income in Canada.
Things are different in the United States. Their wealthy receive a more disproportionate share of income. There, the top one percent of earners received 18.29 percent of total income excluding capital gains in 2007, according to research by Berkeley economics professor Emmanuel Saez.
A major complaint of the Occupy Wall Street protestors in New York City is the soaring unemployment rate in the United States. The recent recession saw a huge increase in unemployment.
The same recession barely caused a blip in Canada. Compared to recessions in the 1980s and mid-1990s, unemployment increased only marginally in Canada. As of September, the unemployment rate was 7.1 percent, much lower than the 12 percent it was at in 1983.
Canadian corporate profits have, like the earnings of wealthy Canadians, risen significantly over the last few years. Profits more than tripled between 1988 and 2007. The recession caused a decline in profits since 2007, so that in 2009, Canadian corporations made after-tax profits of $169 billion.
American corporate profits have also risen over the past few decades. The chart below is from a recent report by Business Insider, which looked at why Occupy Wall Street protestors are angry. It illustrates the rise in American corporate profits.
Editor’s note: This story was edited at 6:05 PM on October 18, 2011 to more accurately reflect the difference between the top and median income earners in Canada. It was also edited to provide a more accurate comparison of income shares between Canada and the United States.
Comments