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New report by the Vanier Institute for the Family
Ottawa (14 Feb. 2006) - Remember the trickle-down economics of the 1980s, when Conservative tax cuts for the wealthy were supposed to flow like the tide to every income corner of the economy?
Remember free trade, instituted by the Tories and maintained by Liberals? It was going to do the same thing. Everyone would benefit in the long run.
So what's happened over the past 15 years?
"If you discount inflation," says a new report by the Vanier Institute for the Family, "the typical worker now earns only 10 cents more per hour than they did in 1991. In addition, the time worked per week declined by about an hour and a half over the period."
Promises, promises
That's a damning verdict on the majority of the political speeches, board of trade puff jobs and think tank door-stoppers issued over the past 10 years.
Families have known for years that much of what they have been hearing from their leaders, from the media and from just about everyone with influence in our society does not add up.
The report by the Vanier Institute is a welcome wake-up call to everyone.
"On average, families have seen their incomes stagnate at about $55,500 during the first half of the decade," it says.
"For the first time since the depression, households now have negative annual savings and they continue to build up larger and larger debt-loads," the institute adds.
"For many, this is not a pretty picture. More families are now “cash-strapped” and are struggling to make ends meet. Many can’t keep up and bankruptcies have risen to record levels.
"The situation will not get better in the near future, as interest rates continue to rise. The report suggests that many households are now house rich but cash-poor."
Other findings
The institute's report is entitled Current State of Canadian Family Finances. Other findings in the document include the following:
- More than 24% of wives with children now earn more than their husbands.
- Poverty has been virtually eliminated (down to 1.7%) among married seniors.
- Most of household asset growth has come from rising house prices and stock market gains.
- A special section on the “middle class” family found that this family is now contributing (income taxes less government transfers) about $1,500 on a net basis to other income groups. (This is down sharply from a net contribution of $4,500 in 1990. About seven-out-of-ten middle-class households are homeowners with over half of these homeowners still carrying a mortgage.) NUPGE